Exam 9: Comparative Advantage and the Gains From International Trade

Which of the following is a reason for the success that firms have in getting the government to erect barriers to foreign competition?

Over the past several decades there has been rapid growth in international trade.This growth has been due to all but one of the following factors.Which factor has not contributed to the growth of international trade?

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 Morocco gain compared to the "without trade" numbers?

Jobs lost to foreign trade are generally easy to identify,but jobs created by foreign trade are generally less easy to identify.

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

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

Berries Fish Rob 20 80 Bill 30 60 Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced. -Refer to Table 9-4.Use the table above to 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 value of the deadweight loss as a result of the quota?

a.Distinguish between a tariff and a quota. b.In what ways are tariffs and quotas similar? c.In what ways are tariffs and quotas different? d.Why might a foreign producer prefer a quota rather than a tariff?

In general,the costs tariffs and quotas impose on consumers are

What is autarky?

When BMW,an German company,purchases a welding machine that was made in Toronto,the purchase is

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

What are terms of trade?

Trade between countries that is without restrictions is called

Today,the United States charges an average tariff rate

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Imports are goods and services bought domestically