Exam 19: International Trade,comparative Advantage,and Protectionism

Suppose that the United States and Italy both produce wine and shoes.In the United States,wine sells for $10 a bottle and shoes sell for $40 a pair.In Italy,wine sells for 15 euros a bottle and shoes sell for 20 euros a pair.Given this information,trade will flow in both directions if the price of a dollar is between

Refer to the information provided in Table 19.2 below to answer the questions that follow. Table 19.2 -Refer to Table 19.2.If both countries specialize and trade with each other,Thailand will export ________ and China will import ________.

A country's trade is balanced when

In the year ________,the United States switched from running a trade surplus to running a trade deficit.

The United States imports televisions from Japan and Japan imports computer chips from the United States.If the theory of comparative advantage guides trade between the two countries,it must be true that

The theory of comparative advantage is credited to

If the exchange rate between the United States and Mexico changes from $1 = 100 peso to $1 = 5 pesos,ceteris paribus,

When trade is free,patterns of trade and trade flows result from

Refer to the information provided in Figure 19.1 below to answer the questions that follow. Figure 19.1 -Refer to Figure 19.1.The opportunity cost of producing a bushel of alfalfa in Canada is

Suppose a U.S.dollar exchanges for 2 British pounds,then each pound is worth

Specialization and trade allow a country to

Related to the Economics in Practice on p.679: Satirist Frederic Bastiat's essay arguing for a quota on sunlight in order to protect domestic candle makers suggests that it is pointless to

A quota is a restriction that allows women and minorities to import a certain percentage of imports.

Refer to the information provided in Figure 19.3 below to answer the questions that follow. Figure 19.3 -Refer to Figure 19.3.The domestic price of shoes is $80.After trade the price of a pair of shoes is $60.If shoes are a normal good and income in this country rises,then we would expect

Refer to the information provided in Table 19.2 below to answer the questions that follow. Table 19.2 -Refer to Table 19.2.Which terms of trade benefits both countries?

In general,for any two countries,there are many exchange rates that will lead to gains from trade,based on comparative advantage.

The idea of the U.S.-Canadian Free-Trade Agreement that removed all barriers to trade including tariffs and quotas between the United States and Canada by 1998 was to

Refer to the information provided in Figure 19.4 below to answer the questions that follow. Figure 19.4 -Refer to Figure 19.4.The domestic price of a leather wallet is $20.With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15.With the tariff domestic production is

Free trade decreases world production and consumption.

Country A has a comparative advantage compared to Country B in the production of shoes,if