Econ 1: Final 4/4
provide protection to all industries; maintain the protections indefinitely
what the Department of Trade should not do for infant industry argument
will effect of a tariff
- a domestic market price above world price - decreased imports - deadweight loss
A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is ______________
2.67 bushels of corn
the unfair-competition argument
a common argument is that free trade is desirable only if all countries play by the same rules
tariff
a tax on goods produced abroad and sold domestically
what is an important role for World Trade Organization in international trade
attempts to minimize barriers to trade and assesses complaints of unfair trading from member countries
above the world price: lastly, consumer surplus in Cuba will...
decrease
T or F: Because the oil is produced domestically, residents of Sakhalin will pay less than the world price
false
T or F: Even after trade is open, the producer surplus and consumer surplus will be equal
false
T or F: In order for oil producers in Sakhalin to decide to export, the world price must be below the domestic price
false
imports
goods produced abroad and sold domestically
exports
goods produced domestically and sold abroad
what should the Department of Trade do for infant industry argument
have guidelines for when the policy will end; focus on a few key industries
above the world price: Cuban exports of grapefruits will...
increase
above the world price: the price of domestic Cuban grapefruit for consumers will...
increase
above the world price: while producer surplus in Cuba will...
increase
Absolute advantage can be determined by comparing different producers' ________
input requirement per unit of output
A gardener can produce either beans or corn in her garden. It follows that the gardener's opportunity cost of a bushel of beans multiplied by her opportunity cost of a bushel of corn is ______
is equal to one
the infant-industry argument
new industries sometimes argue for temporary trade restrictions to help them get started
Ireland taxes the import of potatoes in order to keep domestic farmers in business
operation of a tariff
the job argument
opponents of free trade often argue that trade with other countries destroy domestic jobs
The infant industry argument states that domestic industries should be ____________ foreign competition in the early stages of development so that the industry ______________
protected from; can mature
comparative advantage
the ability to produce a good at a lower opportunity cost than another producer
absolute advantage
the ability to produce a good using fewer inputs than another producer
which argument: The microprocessor industry is facing stiff competition from abroad, so the government decides to install a temporary tariff to allow the industry to become more competitive against its foreign competitors
the infant-industry
which argument: Phil works as a foreman in an auto manufacturing plant. After a downturn in the economy, his plant is being shut down and all of the manufacturing relocated to Fiji
the jobs
which argument: Otis heads a steel mining operation and hears that his company plans to move his job overseas. He responds that they should keep the company domestic because its operations provide materials for the country's domestic defense
the national-security
world price
the price of a good that prevails in the world market for that good
the protection-as-a-bargaining-chip argument
the strategy of bargaining. argue that trade restrictions can be useful when we bargain with our trading partners
which argument: The government decides to place a tariff on platinum imports as it determines that mining practices abroad are not as strictly regulated as those domestically
the unfair-competition
T or F: As the country begins to export, producer surplus will increase
true
the national-security argument
when a industry is threatened with competition from other countries, opponents of free trade often argue that the industry is vital for national security