Exam 9: Comparative Advantage and the Gains From International Trade

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?

Imports are goods and services bought domestically

As a percentage of GDP, exports are greater than imports for which of the following countries?

Selling a product at a price below its cost is known as dumping.

If the U.S. government implements a tariff on Chinese tire imports all of the following would be made worse off except

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. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how many swords will Morocco consume?

Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because

Table 9-8 Table 9-8 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 9-8. a. Which person has an absolute advantage in the production of bows? arrows? b. Which person has a comparative advantage in the production of bows? c. Which person has a comparative advantage in the production of arrows?

Today, ________ of Goodyear's tire sales are in the North America.

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 hats will Belize consume?

The quota on imported sugar costs U.S. consumers more than $2 billion annually and protects very few jobs. Why does Congress maintain a sugar quota that protects only a few thousand workers while forcing millions of people to pay higher prices for sugar products?

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. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how many swords will Estonia gain compared to the "without trade" numbers?

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 domestic producer surplus without a quota?

Table 9-7 Output Per Hour of Work Table 9-7 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 9-7. a. Which country has an absolute advantage in the production of handbags and jackets? b. Which country has a comparative advantage in the production of handbags? c. Which country has a comparative advantage in the production of jackets?

Once a country has a comparative advantage in producing a product, it cannot lose that advantage.

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

A quota

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. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how many belts will Estonia gain compared to the "without trade" numbers?

Figure 9-5 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-5 shows the impact of this tariff. -Refer to Figure 9-5. Without the tariff in place, the United States consumes