Exam 9: Comparative Advantage and the Gains From International Trade

Figure 9-4 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-4.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents domestic producer surplus?

Candles Soup Bryce 150 450 Tina 200 450 Bryce and Tina are artisans who produce homemade candles and soap.Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 9-3.Select the statement that accurately interprets the data in the table.

Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 9-12 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 9-12.Which country has a comparative advantage in producing belts?

Output Per Hour of Work Light Bulbs Flash Drives Mexico 20 5 Canada 8 32 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.Fill in the following table with the opportunity costs of producing light bulbs and flash drives for Mexico and Canada. Light Bulbs Flash Drives Mexico Canada

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.With the tariff in place,the United States consumes

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

Which of the following statements is false?

One of the main sources of comparative advantage is internal economies.

Which of the following statements is true?

Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 9-12 shows the output per hour of work,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 50 belts are traded,how many belts will Estonia consume?

Which of the following statements is false?

Pies Cakes Sarita 15 25 Gabriel 12 16 Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries.This protectionism will cause the greatest harm to

Governments sometimes erect barriers to trade other than tariffs and quotas.Which of the following is not an example of this type of trade barrier?

Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 9-12 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 9-12.Which country has a comparative advantage in producing swords?

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

Under autarky,domestic producer surplus is represented by the area

What is a tariff?

Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky,the consumer surplus is