Exam 9: Comparative Advantage and the Gains From International Trade

In the past two decades the United States lost its comparative advantage in automobiles to Japan.What factor was most responsible for the development of Japan's comparative advantage in automobiles?

International trade

A consequence of increasing marginal costs of producing laptop computers in the United States is

The United States would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade.These examples are misleading because

In the 1970s and 1980s,the United States lost its comparative advantage in consumer electronics goods to Japan.What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?

Free trade refers to trade between countries

Output per hour Production and Production of work Consumption without Trade with Trade Clocks Hats Clocks Hats Clocks Hats Denmark 6 3 900 150 1,200 0 Belize 1 2 150 100 0 400 Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-11 shows the output per hour of work,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 hats will Denmark consume?

The main purpose of most tariffs and quotas is to

Which of the following is the best example of a tariff?

Output per hour Production and Production of work Consumption without Trade with Trade Clocks Hats Clocks Hats Clocks Hats Denmark 6 3 900 150 1,200 0 Belize 1 2 150 100 0 400 Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-11 shows the output per hour of work,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?

Domestic producers require time to gain experience and lower their unit costs;this will allow these producers to compete successfully in international markets.This statement describes the ________ argument for protectionism.

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?

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.All of the following are terms of trade that could possibly benefit both countries except

Which of the following is common to both tariffs and quotas?

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

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

Output per hour Production and Production of work Consumption without Trade with Trade Clocks Hats Clocks Hats Clocks Hats Denmark 6 3 900 150 1,200 0 Belize 1 2 150 100 0 400 Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-11 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 9-11.With trade,what is the total gain in hat production?

The United States is a leading exporter of wheat.What explains the comparative advantage of the United States in wheat production?

Autarky is a situation in which a country