Exam 9: Comparative Advantage and the Gains From International Trade

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.What is the area of domestic producer surplus after the imposition of a quota?

Each year,the United States exports about 50 percent of its wheat crop.

In 2014,the largest exporter in the world was

Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff. -Refer to Figure 9-5.The loss in domestic consumer surplus as a result of the tariff is equal to

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.If the tariff was replaced by a quota which limited rice imports to 16 million pounds,the amount of revenue received by rice importers would equal

Suppose in Vietnam a worker can produce either 16 units of cloth or 2 bicycles while in China a worker can produce either 20 units of cloth or 5 bicycles. a.Which country has an absolute advantage in cloth production? In bicycle production? b.What is the opportunity cost of 1 unit of cloth in Vietnam? In China? c.What is the opportunity cost of 1 bicycle in Vietnam? In China? d.Which country has a comparative advantage in cloth production? In bicycle production? e.Suppose each country has 1,000 workers.Currently,each country devotes 40 percent of its labor force to cloth production and 60 percent to bicycle production.What is the output of cloth and bicycles for each country and what is the total output of cloth and bicycles between the two countries? f.Suppose each country specializes in the production of the good in which it has a comparative advantage.What is the total output of cloth and bicycles in the two countries? g.Provide a numerical example to show how Vietnam and China can both gain from trade.Assume that the terms of trade are established at 6 units of cloth for 1 bicycle.

Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff. -Refer to Figure 9-5.Without the tariff in place,the United States produces

The trade model described in the text demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage.In reality we do not see complete specialization in production.State three reasons why this is case.

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 consumers purchase?

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

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to limit their exports to a country.What are these types of agreements called?

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.What is the area of consumer surplus after the imposition of the quota?

In the 1980s,Japan agreed to limit the quantity of automobiles it would export to the United States.Why did the Japanese government agree to this trade restriction?

Figure 9-4 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-4.Under autarky,the consumer surplus is area

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.

Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy,a dog grooming business.Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 9-1.Select the statement that accurately interprets the data in the table.

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.What is the area that represents the deadweight loss as a result of the quota?

With the proposed TPP tariff changes on imported shoes,New Balance would be ________ by the change in prices on some of the imported shoes sold by other companies that compete with New Balance's U.S.-produced shoes,and New Balance would be ________ because of the price it could now charge for the shoes it imports from TPP countries.

One reason a country does not specialize completely in production is that production of most goods involves increasing opportunity costs.

Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff. -Refer to Figure 9-5.With the tariff in place,the United States consumes