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Exam 18: International Trade

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Question 51

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Explain the connection between opportunity costs of production and the shape of the production possibilities curve.

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If there are constant opportunity costs ...

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Question 52

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A curve showing the quantity of imports demanded at various prices is called a(n)

A) export supply curve.
B) import supply curve.
C) demand curve.
D) import demand curve.
E) export demand curve.

F) A) and D)
G) A) and E)

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Question 53

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Consumption can only occur along the pre-trade production possibilities frontier.

Why has international trade grown more rapidly over the past 30 years?

Trade will tend to equalize the price of goods, but not the price of factors of production.

Suppose the Russian government decides it needs to protect its aircraft industry for reasons of national security. Name two ways it can achieve this goal. Which policy would you recommend? Why?

Exhibit 30-1 -Refer to Exhibit 30-1. If the importing country imposes a tariff of $2 per unit, consumers will pay ____ percent of the tax, and producers will pay ____ percent.

Over the past 50 years, international trade, as a proportion of real GDP, has

A country cannot have a comparative advantage in the production of all goods.

Trade will tend to equalize factor prices.

How does trade due to comparative advantage differ from trade due to expanded markets?

There are winners and losers as a result of protectionist policies, but economic theory can show that the gains from the winners are larger than the losses of the losers.

Some people argue that dumping is a form of

Throughout much of U.S. history, tariffs had the purpose of

One of the most common forms of trade restrictions is the ad valorem tariff, which represents a tax on imports evaluated as a percentage of the value of the import.

Revenue tariffs, whose main purpose is raising revenue, were by far the most significant source of federal revenue in the United States before the income tax was made constitutional by the Sixteenth Amendment to the U.S. Constitution in 1913.

Trade will tend to increase wages in a labor-abundant country because the

International trade tends to

Exhibit 29-5 $\begin{array} { | c | c | c | } \hline & \text { Wheat } & \text { Strawberries } \\\hline \text { Mexico } & 6 \text { bushels } & 2 \text { pints } \\\hline \text { United States } & 6 \text { bushels } & 4 \text { pints } \\\hline\end{array}$ -Refer to Exhibit 29-5. Suppose that the following table represents the production of wheat and strawberries per unit of labor in the United States and Mexico: (A) Which caunty has a camparative atyantage in wheat protuction? Why? (B) Which cauntry has an absolute atvantage in wheat? in strawberres? Why? (C) With free trade between the United States and Mexdca, is it passible that 1 bushel af Wheat will tade far 1 pint of strawheries? Why ar why nat? (D) Suppose the free trade price is 2 bushels of wheat far 1 pint of strawberies. Draw a klarem indicating the production passibilites curve writh and writhout tade if the United States has 100 millian units of labor. How much of each godd will the United States produce?

If the price U.S. consumers pay with a quota on an imported good exceeds the price they pay without a quota, then the quota was set