ECON 110 Quiz 4

The opportunity cost of producing one more quart of olive oil in Greece is ___ pounds of pasta The opportunity cost of producing one more quart of olive oil in Italy is __ pounds of pasta The opportunity cost of producing one more pound of pasta in Greece is ___ quarts of olive oil The opportunity cost of producing one more pound of pasta in Italy is ___ quarts of olive oil

0.5 2 2 0.5

a. How much beef does the United States import at the world​ price(WP)? b. Now suppose that the United States imposes a tariff on beef of​ $0.50 a pound. How much beef is now​ imported? c. Do domestic producers of beef gain or lose when the United States imposes a tariff on​ beef? d. Does the government gain or lose when the United States imposes a tariff on​ beef? e. Do domestic consumers of beef gain or lose when the United States imposes a tariff on​ beef?

500 200 gain gain lose

Which area shows the loss in producer​ surplus?

A

Which​ area(s) shows the amount of surplus transferred from consumers to producers as a result of the tariff on​ combs?

A

The graph at right shows the effect on consumer​ surplus, producer​ surplus, government tariff​ revenue, and economic surplus of a tariff of​ $1 per unit on imports of plastic combs into the United States. Use the areas denoted in the graph to answer the following questions. Which​ area(s) shows the total loss to U.S. consumers as a result of the tariff on​ combs?

A+B+C+D

Which of the following is not a​ non-tariff barrier to​ trade?

Ad valorem tax on imports

Choose the correct answer that might refer to​ "economic nationalism."

All of the above.

Which areas show the reduction in deadweight​ loss?

B+D

Which​ area(s) show the deadweight loss to the U.S. economy as a result of the tariff on​ combs?

B+D

If both countries specialize completely by producing only that for which they have a comparative advantage and then​ trade, what would be the terms of trade that would benefit both​ countries?

Both countries would benefit from trade if the Philippines were to trade 20,000 bananas for 12,000 pineapples with Columbia

Which area shows the loss in government tariff​ revenue?

C

Do you agree that reducing barriers to trade reduces the number of jobs available to workers in the United​ States?

Disagree. While some jobs are saved by trade​ restrictions, many more jobs are lost in industries that use trade restricted goods as inputs.

According to comparative​ advantage, why is​ Buchanan's argument​ incorrect?

His argument is incorrect because the United States should free up resources to produce the goods in which it has the comparative advantage.

​"Unfortunately, Bolivia does not have a comparative advantage with respect to the United States in the production of any good or​ service."

If the U.S. trades at all with​ Bolivia, then the argument above is false. There would be no trade unless both countries were made better​ off, and this would imply Bolivia has the comparative advantage in the production of at least one good or service.

What is meant by a country specializing in the production of a​ good? Is it typical for countries to be completely​ specialized?

It shifts resources toward producing only those goods where it has a comparative​ advantage; No

Do you agree that a country only benefits from free trade if every other country also practices free​ trade?

No

a. Which line represents the price of goods with​ tariffs? b. Which line represents the price of goods without​ trade? c. Is the​ student's reasoning correct or​ incorrect?

PUS PNT Incorrect

Which of the following statements is​ true? 8 10 5 3

The opportunity cost for Canada to produce one Smartwatch is 0.60 fitness bracelets

Which of the following statements is​ true?

The opportunity cost for Canada to produce one Smartwatch is 1.75 fitness bracelets

By specializing in the production of the goods and services in which they have ______​ advantage, countries allocate resources more efficiently. In other​ words, goods and services are produced at their lowest _____________ cost and world output increases. Since countries are producing goods and services at different opportunity​ costs, _____________ can be negotiated that will allow all countries to consume more with trade than in autarky.

a comparative; opportunity; terms of trade

For Germany to have a comparative advantage in a product relative to France or another​ country, it would have

a lower opportunity cost of producing the product than the other country.

The graph at right shows the situation after the U.S. removes a tariff on imports of canned tuna. Which areas show the gain in consumer​ surplus?

a+b+c+d

By​ trading, countries are able to consume more than they could without trade. This outcome is possible because

all of the above.

_______ should produce Smartwatches and_____ should produce Fitness Bracelets.

canada; switzerland

________ advantage is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower opportunity cost than competitors. While _______ advantage is the ability of an​ individual, a​ firm, or a country to produce more of a good or service than competitors when using the same amount of resources. A country will always be an exporter of a good where it has ____________ advantage in production

comparative; absolute; a comparative

Countries gain from specializing in producing goods in which they have an absolute advantage and trading for goods in which other countries have an absolute advantage.

false

Suppose China decides to pay large subsidies to any Chinese company that exports goods or services to the United States. As a​ result, these companies are able to sell products in the United States at far below their cost of production. In​ addition, China decides to bar all imports from the United States. The dollars that the United States pays to import Chinese goods are left in banks in China. a. The strategy will ________ the standard of living in China. b. The strategy will ___________ the standard of living in the U.S.

lower; raise

Even with international​ trade, countries rarely specialize completely because

production of most goods involves increasing opportunity costs

Another restriction with a similar outcome would be to impose a limit on the amount of a specific good that can be imported. This restriction is called a ________

quota

If the government wants to protect import competing industries and its workers from foreign​ competition, it can impose a tax on imports called a ______

tariff

​_____ is a situation in which a country does not trade with other countries. The​ _____ is the ratio at which a country can trade its exports for imports from other countries.

​Autarky, terms of trade