homework 2
which of the following is not an example of the principle that trade can make everyone better off?
-Americans buy tube socks from china -residents of Maine drink orange juice from Florida - a homeowner hires the kid next door to mow the lawn ALL OF THE ABOVE
a common argument in favor of restricting trade
-concerns the strategy of bargaining -is that efforts should be made to get new industries started -emphasizes the belief that all countries should play by the same rules ALL OF THE ABOVE
when a country allows international trade and becomes an exporter of a good,
-domestic producers of the good become better off -domestic consumers job the good become worse off -the gains of the winners exceed the losses of the losers ALL OF THE ABOVE
the opportunity cost of 1 pound of tomatoes for the farmer is
1/2 pound of pork
equilibrium price and equilibrium quantity without trade are,
42 and 1200
about what percent of total world trade is accounted for by countries that belong to the world trade organization
97 percent
a quota is
a limit on the quantity of imports
most economists view the US experience with trade as
an ongoing experiment that confirms the virtues of free trade can be reached, due to lack of trade within the US throughout most of early history
Adam smith
and David Ricardo both supported free trade
England has a comparative advantage in the production of
cheese and Spain has the comparative advantage in the production of bread
the most obvious benefit fo specialization and trade that they allow us to
consume more goods than we otherwise would be able to consume
when the nation of isoland opens up its steel market to international trade, the change
creates winners and loser, regardless of whether isoland ends up exporting or importing steel
which of the following is not correct - economists are generally united in their support of free trade -the conclusions of Adam smith and David Ricardo on the gains from trade have held up well over time -David Ricardo argued that Britain should not restrict imports of grain - economists' opposition to trade restrictions is still based largely on the principle of absolute advantage
economists' opposition to trade restrictions is still based largely on the principle of absolute advantage
both Alice and Betty
face a constant trade-off between producing pitchers of lemonade and pizzas
be definition, imports are
goods produced abroad and sold domestically
the problem with the protection-as-a-bargaining-chip argument for trade restrictions is
if it fails the country faces a choice between two bad options
goods produced abroad and sold domestically
imports
a person can benefit from specialization and trade by obtaining a good at a price that is
lower than his or her opportunity cost of that good
Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles,
other countries have a comparative advantage over Vietnam and Vietnam will import textiles
a tax on imported goods
tariff
when a country allows International trade and becomes an importer of a good
the gains of the winners exceed the losses of the losers
When a nation first begins to trade with other countries and the nation becomes an importer of corn,
the nation's consumers of corn become better off and the nation's producers of corn become worse off
in a 2007 New York Times article, Paul Krugman wrote that
the negative effects of third world exports on US wages may increase
With which of the Ten Principles of Economics is the study of international trade most closely connected?
trade can make everyone better off
the price of a good that prevails in a world market is called the
world price