Exam 19: Comparative Advantage and the Open Economy

Suppose an industry receives protection from the government in the form of tariffs.A number of years later,it is observed that the quantity supplied by domestic firms had decreased and that the domestic price was substantially greater than the world price.We could conclude that

When a good is put onto the global market at a price below the cost to produce it,this is known as

Country X subsidizes industry A.A worldwide recession has hit and Country X has decided to export Good A worldwide,selling the product for less than it costs to produce it.This is

Comparative advantage is defined as

The net effect of regional trade agreements has been

During the 1960s,U.S.steel firms argued they needed tariff protection because Germany and Japan were using new mills to make steel since their old mills were destroyed in World War II.Essentially,this argument is a form of the

Maximum Feasible Hourly Production Rate Chen Holly Units of Good X 50 40 Units of Good Y 25 100 -According to the above table,which assumes that opportunity costs of producing goods X and Y are constant,the opportunity cost of producing one unit of Good Y is ________ units of Good X for Chen and ________ units of Good X for Holly.

Dumping typically occurs as long as the foreign producer sells its output at a price

When a tariff is imposed,the demand curve for the domestic good

Countries engaged in international trade specialize in production based on

Individual Opportunity Cost Pramilla 2 units of good X to produce 1 unit of good Y Sam 3 units of good X to produce 1 unit of good Y George 4 units of good Y to produce 1 unit of good X Lucas 5 units of good Y to produce 1 unit of good X -Consider the opportunity costs of producing goods X and Y that are listed for the four individuals above.Which person has a comparative advantage in producing good Y?

Maximum Feasible Hourly Production Rates (in Tons) of Either Wine or Beef Using All Available Resources Product Argentina France Wine(gallons) 30 60 Beef(pounds) 10 30 -Use the above table.Assuming constant opportunity costs,the opportunity cost of producing a gallon of wine in Argentina is

An official agreement with another country in which it agrees to import more from the United States is

In 1990,there were 50 bilateral agreements and regional trade agreements between countries.Today there are

One reason that U.S.exports of commercial services have increased steadily over the past 25 years is that

What must a government know for the infant industry argument to be a valid reason for imposing tariffs?

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product UnitedStates Mexico Computers 8 10 Bicycles 4 2 -Refer to the above table.It may be concluded that

One argument against free trade is the

The effect of an import quota is

In general,who will benefit as the result of a tariff? I.Domestic producers II.Domestic consumers III.The domestic government