Question 1

What are factor endowments?

Accepted Answer

Factor endowments are the quantity and quality of labor, land, and natural resources of a country.

Question 2

Critically evaluate the following statement. "Only if a country enjoys an absolute advantage in the production of a particular good will that country find it beneficial to trade it with another country.

Accepted Answer

Absolute advantage is not what governs trade. Trade occurs instead because of comparative advantage that one country might have over another in the production of a particular good or service.

Question 3

What is meant by the phrase "economic integration?"

Accepted Answer

Economic integration occurs when two or more nations join to form a free trade zone.

Question 4

Assume a candidate for president makes the argument that the United States should not trade with countries that have lower wages than we do because by doing so it will result in an export of American jobs abroad. Critically evaluate this claim.

Accepted Answer

Wages are tied to productivity. If wages

Question 5

Critically evaluate the following statement. "It is possible to calculate comparative advantage even when prices are not known."

Accepted Answer

This statement is True. Opportunity cost

Question 6

-Using the Figure above for Australia and New Zealand determine which country has the comparative advantage in the production of cotton and which the comparative advantage in the production of wheat.

Accepted Answer

We must first calculate the opportunity

Question 7

Why might a nation that has an absolute advantage in the production of a good or a service still not be able to find a trading partner?

Accepted Answer

The reason is that even though

Question 8

One popular case for protectionism is the "Protection Saves Jobs" argument. What is the nature of this argument? What is its weakness?

Accepted Answer

The main argument is that foreign compet

Question 9

Explain comparative advantage.

Accepted Answer

Comparative advantage is the advantage i

Question 10

Assume the United States televison manufacturing industry accuses the Japanese television manufacturers of dumping. Why should consumers not necessarily be worried about this practice?

Accepted Answer

Dumping is the practice of selling goods

Question 11

What is the basis of the "Cheap Foreign Labor" argument and what are its weaknesses?

Accepted Answer

The basis of the argument is the domesti

Question 12

List the three most common forms of trade barriers.

Accepted Answer

The three most commo

Question 13

What is a tariff?

Accepted Answer

A tariff i

Question 14

Define trade surplus and trade deficit.

Accepted Answer

A trade surplus is a situation

Question 15

Related to the Economics in Practice on p. 369 [681]: Explain what Frederick Bastiat is trying to with his satirical petition.

Accepted Answer

By making this petiton agains

Question 16

What are the assumptions of the Heckscher-Ohlin theorem?

Accepted Answer

It assumes that products can b

Question 17

Assume the following information for the United States and Mexico. The United

Accepted Answer

States can produce a maximum o

Question 18

If a lower exchange rate spurs exports then why wouldn't it be a good idea of policymakers to intervene to push the exchange rate as low as they can?

Accepted Answer

If a lower exchange rate were the key to

Question 19

Discuss the Corn Laws and their purpose.

Accepted Answer

The Corn Laws were tariffs, su

Question 20

Suppose country X can produce a personal computer at an opportunity cost of 1000 t-shirts. Assume that country X has a comparative advantage in the production of t-shirts. Would country X ever agree to terms of trade with country Y such that one personal computer would be exchanged for 1100 t-shirts?

Accepted Answer

There would be no reason for country X t

What are factor endowments?

Critically evaluate the following statement. "Only if a country enjoys an absolute advantage in the production of a particular good will that country find it beneficial to trade it with another country.

What is meant by the phrase "economic integration?"

Assume a candidate for president makes the argument that the United States should not trade with countries that have lower wages than we do because by doing so it will result in an export of American jobs abroad. Critically evaluate this claim.

Critically evaluate the following statement. "It is possible to calculate comparative advantage even when prices are not known."

-Using the Figure above for Australia and New Zealand determine which country has the comparative advantage in the production of cotton and which the comparative advantage in the production of wheat.

Why might a nation that has an absolute advantage in the production of a good or a service still not be able to find a trading partner?

One popular case for protectionism is the "Protection Saves Jobs" argument. What is the nature of this argument? What is its weakness?

Explain comparative advantage.

Assume the United States televison manufacturing industry accuses the Japanese television manufacturers of dumping. Why should consumers not necessarily be worried about this practice?

What is the basis of the "Cheap Foreign Labor" argument and what are its weaknesses?

List the three most common forms of trade barriers.

What is a tariff?

Define trade surplus and trade deficit.

Related to the Economics in Practice on p. 369 [681]: Explain what Frederick Bastiat is trying to with his satirical petition.

What are the assumptions of the Heckscher-Ohlin theorem?

Assume the following information for the United States and Mexico. The United

If a lower exchange rate spurs exports then why wouldn't it be a good idea of policymakers to intervene to push the exchange rate as low as they can?

Discuss the Corn Laws and their purpose.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

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Exam 19: International Trade, Comparative Advantage, and Protectionism

What are factor endowments?

Critically evaluate the following statement. "Only if a country enjoys an absolute advantage in the production of a particular good will that country find it beneficial to trade it with another country.

What is meant by the phrase "economic integration?"

Assume a candidate for president makes the argument that the United States should not trade with countries that have lower wages than we do because by doing so it will result in an export of American jobs abroad. Critically evaluate this claim.

Critically evaluate the following statement. "It is possible to calculate comparative advantage even when prices are not known."

-Using the Figure above for Australia and New Zealand determine which country has the comparative advantage in the production of cotton and which the comparative advantage in the production of wheat.

Why might a nation that has an absolute advantage in the production of a good or a service still not be able to find a trading partner?

One popular case for protectionism is the "Protection Saves Jobs" argument. What is the nature of this argument? What is its weakness?

Explain comparative advantage.

Assume the United States televison manufacturing industry accuses the Japanese television manufacturers of dumping. Why should consumers not necessarily be worried about this practice?

What is the basis of the "Cheap Foreign Labor" argument and what are its weaknesses?

List the three most common forms of trade barriers.

What is a tariff?

Define trade surplus and trade deficit.

Related to the Economics in Practice on p. 369 [681]: Explain what Frederick Bastiat is trying to with his satirical petition.

What are the assumptions of the Heckscher-Ohlin theorem?

Assume the following information for the United States and Mexico. The United

If a lower exchange rate spurs exports then why wouldn't it be a good idea of policymakers to intervene to push the exchange rate as low as they can?

Discuss the Corn Laws and their purpose.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters