Exam 9: Comparative Advantage and the Gains From International Trade

A tariff is a tax imposed by a government on imports.

Domestically produced goods and services sold to other countries are referred to as

Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

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. Without the tariff in place, the United States consumes

How does the U.S. federal government assist workers who have lost their jobs due to international trade?

Table 9-1 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 9-1. Select the statement that accurately interprets the data in the table.

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 Morocco gain compared to the "without trade" numbers?

When Sophie, a French citizen, purchases a Dell computer in Paris that was produced in Texas, the purchase is

In 1930, the U.S. government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff. In response to this tariff, other countries ________ and international trade ________.

One reason a country does not specialize completely in production is that production of most goods involves increasing opportunity costs.

Table 9-9 Output Per Hour of Work Table 9-9 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada. -Refer to Table 9-9. a. Which country has an absolute advantage in the production of light bulbs and flash drives? b. Which country has a comparative advantage in the production of light bulbs? c. Which country has a comparative advantage in the production of flash drives?

If a country has an absolute advantage in producing a product, it must also have a comparative advantage in producing that product.

In 1995 ________, which was established in 1948, was replaced by ________.

Figure 9-4 Figure 9-4 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-4. Under autarky, the equilibrium price is

Wall Street, in the borough of Manhattan in New York City, is the heart of the U.S. financial system, where banks, brokerage houses, other financial firms, and the New York Stock Exchange are all located. What is the reason for New York City's comparative advantage in the financial market?

The textbook referred to the following quotation from a Federal Reserve publication: "Trade is a win-win situation for all countries that participate." But many firms and workers oppose free trade policies and protests against globalization have become a regular occurrence at meetings of the World Trade Organization. If trade is a "win-win" situation, why is there strong opposition to free trade and globalization?

Although the United States is the second largest exporting country, international trade is less important to the U.S. than it is to most other countries.

Explain why international trade is less important to the United States than it is to many other countries.

________ is the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.

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 Belize consume?