Exam 7: Comparative Advantage and the Gains From International Trade

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

The United States would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.The "Buy American" provision would ________ consumer surplus and ________ producer surplus for industries that produced protected products in the United States.

Table 7-2 Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

Figure 7-5 -Refer to Figure 7-5.Fenwick currently both produces and imports pistachios.The government of Fenwick decides to restrict international trade in pistachios by imposing a quota that allows imports of only 5 million pounds each year.Figure 7-5 shows the estimated demand and supply curves for pistachios in Fenwick and the results of imposing the quota.

The terms of trade refers to

Dumping refers to countries exporting unwanted and inferior products to other countries.

Figure 7-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 7-3 illustrates the impact of the quota. -Refer to Figure 7-3.What is the value of domestic producer surplus after the imposition of a quota?

Table 7-2 Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to limit their exports to a country.What are these types of agreements called?

Which of the following statements is false?

Countries gain from specializing in producing goods in which they have ________ and trading for goods in which other countries have ________.

Protectionism is usually justified on the basis of one of four arguments.What are those four arguments?

Prior to the 1998 World Cup,France banned the use of all soccer balls made by child workers.Several economists criticized the ban.Which of the following is an argument these economists used to justify the use of child labor in some countries?

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

All but one of the following statements is used to justify protectionism.Which statement is not used to justify protectionism?

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents domestic producer surplus?

International trade

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts.Table 7-6 shows the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,how many swords will Estonia consume?

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts.Table 7-6 shows the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,how many belts will Morocco consume?