Exam 9: Comparative Advantage and the Gains From International Trade

A quota is

Table 9-11 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-11 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-11. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Denmark consume?

A tariff is the same as a quota.

Which of the following is the best example of a quota?

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3. What is the value of revenue to foreign producers who are granted permission to sell in the U.S. market when there is a quota?

NAFTA refers to a 1994 agreement that eliminated most tariffs among which countries?

Table 9-12 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 9-12 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-12. Which country has an absolute advantage in producing belts?

Following the tariff imposed on Chinese tires, some businesspeople correctly argued that the U.S. tariff would result in

Dalton, Georgia, a town with a population less than 35,000, has developed into a leading producer of carpets, despite its small size. Some government officials argue that the success achieved by firms in Dalton in developing a comparative advantage in carpet making because of external economies can be used to justify trade barriers as a means to protect an "infant industry." After an infant industry gains experience it can compete in international markets and the trade barriers can be removed. What objections do economists make to this argument in favor of trade barriers?

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

In the 1970s and 1980s, the United States lost its comparative advantage in consumer electronics goods to Japan. What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?

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.

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1. Under autarky, the deadweight loss is

Trade only occurs if there are only winners, and no losers, as a result of the trade.

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3. What is the value of consumer surplus after the imposition of the quota?

Which of the following is an example of a trade restriction?

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2. With the tariff in place, the United States

A tariff

Table 9-11 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-11 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-11. Prior to trade, what was the opportunity cost to produce 1 clock in Denmark?

Countries that engage in trade will tend to specialize in the production of goods and services in which they have ________ and will ________ these goods and services.