Exam 32: Comparative Advantage and the Open Economy

The effects of a tariff are

Explain the infant industry argument.

To avoid trade restrictions, a U.S. firm moves its final production process to Ireland and then ships the final products to Germany. This is an example of

A rationale used for tariff protection by some is that

The infant-industry argument is often criticized because

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

The importance of international trade in the U.S. economy

Protection of new products from global competition is known as

A new industry develops, and our government wants to protect it from foreign competition. Which one of the following arguments would appropriately describe this type of protection?

-According to the above table, which assumes that opportunity costs of producing goods X and Y are constant, Holly has comparative advantage in production of

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

The maximum amount of a good that may be imported during a specified period of time is

Governments sometimes subsidize domestic industries. When this occurs

Suppose Ethan and Ava work in a farm that grows apples and oranges of the same size. In one hour, Ethan can pick 8 pounds of apples or 1 pound of oranges. Ava can pick 6 pounds of apples or 1 pound of oranges. It can be concluded that

Mason and Chloe each produce two goods. According to the principle of comparative advantage, the total output produced by these individuals will be greatest

Which of the following is the situation in which firms outside a trade bloc shift the final assembling process of partially assembled products into a member nation of the bloc and then export the finished products to other nations within the bloc?

-According to the above table, which assumes that opportunity costs of producing goods X and Y are constant, which of the following statements is TRUE?

Suppose that opportunity costs in India and Australia are constant. In India, maximum feasible hourly production rates are either 0.3 unit of cloth or 0.2 unit of food. In Australia, maximum feasible hourly production rates are either 0.5 unit of cloth or 0.5 unit of food. It is correct to state that

A government-imposed restriction on the quantity of a specific good that another country is allowed to sell in the U.S. is

One way to reduce exports is to