Exam 16: Comparative Advantage and the Gains From International Trade

Assume the North Island of New Zealand can produce 2,000 fishing poles or 20 kayaks per day and the South Island can produce 1,000 fishing poles or 5 kayaks per day.The South Island has a comparative advantage in producing kayaks.

International trade

Comparative advantage is determined by the

The United States imposes a quota on sugar imports

Both tariffs and quotas

Assume that Spain can produce a commodity using fewer resources than any other country.Spain will export this commodity even if other countries have a lower opportunity cost of producing it.

If Country A can produce a good at a lower opportunity cost than Country B can,

Consider the following information on labor hours needed per unit of output: Ignoring nonlabor inputs,which of the following statements is correct?

A country that has relatively large amounts of a particular resource at its disposal

Assume that Chile can produce one pound of coffee or 40 pillows in an hour,and that the United States can produce one pound of coffee or 20 pillows in an hour,

If Canada began to export maple syrup to Australia,which of the following will happen?

Trade restrictions have been defended on the grounds that they

In general,a society will benefit more,the more self-sufficient it is.

Differences in climate among nations

Which of the following must be true in order to engage in advantageous international trade?

Suppose the opportunity cost is a constant 500 TV sets for 1 car in Canada and 1,000 TV sets for 8 cars in Mexico.Then,if both countries specialize in accordance with their comparative advantage,the production of 1,000 extra TV sets in one country and 1,000 fewer TV sets in the other would imply that the world as a whole can have

A quota decreases the volume of imports,whereas a tariff typically has no impact on the volume of imports.

The limits of the terms of trade between two countries are determined by those countries' opportunity costs of production.

For each watch Denmark produces,it gives up the opportunity to produce 50 pounds of cheese.France can produce two watches at a cost of 150 pounds of cheese.Which of the following is true?

If a country begins to import a good,