Exam 9: Comparative Advantage and the Gains From International Trade

Table 9-6 Mateo and Celeste produce custom saddles and spurs. Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 9-6. Select the statement that accurately interprets the data in the table.

A tariff is a numerical limit on the quantity of a good that can be imported.

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 produces

Tastes for products such as beer differ. As a result

China has developed a comparative advantage in the production of clothing. The source of this comparative advantage is

An economic principle that explains why people pursue different occupations 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. Which country has an absolute advantage in producing clocks?

Which of the following statements is used to justify protectionism?

The General Agreement on Tariffs and Trade (GATT) was formed to replace the World Trade Organization (WTO) because the WTO was empowered only to reduce barriers to trade in goods. The GATT is an agreement to reduce barriers to trade in goods, services and intellectual property.

Examples of ________ show how trade between two countries can make each better off.

One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify. Which of the following is a second reason?

The World Trade Organization (WTO) promotes foreign trade and investment, or globalization. In recent years opposition to globalization has led to violent protests at meetings of the WTO. One reason for these anti-globalization protests is

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. -As a result of the tariff on Chinese tires, U.S. consumers are estimated to have spent ________ on imported tires and ________ on U.S.-produced tires.

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. If there was no quota, how many pounds of peanuts would domestic producers supply?

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1. Suppose the government allows imports of leather footwear into the United States. What will be the domestic quantity supplied?

If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada, which of the following would explain this pattern of trade?

A tax imposed by a government on imports of a good into a country is called

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. Prior to trade, what was the opportunity cost to produce 1 belt in Morocco?

Trade between countries that is without restrictions is called

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. The loss in domestic consumer surplus as a result of the tariff is equal to the area