Unit 6 homework

In 2015, exports made up ___ percent of the us economy

14

One person has a ____ advantage over another if his or her opportunity cost of performing a task is lower than the other

Comparative

Everyone can be made better off if each person specializes in performing the task at which he or she has an

Comparative advantage

If the government imposes a tariff on tomatoes imported from abroad, the the price that domestic consumers pay for tomatoes will

Rise

The sources of economic growth, as measured by increases in real GDP per capita, include

- an increase in economic freedom - an increase in the productivity of workers - an increase in the number of workers

The us both imports and exports significant quantities of

- computer and electronic products - petroleum and coal products - transportation equipment

A strategy that limits defection in a repeated prisoners dilemma game is

tit-for-tat strategy

Protectionism policies such as tariffs and quotas

Are inefficient

The domestic consumers of imported goods ___ from free trade

Benefit

A person has an absolute advantage in a give task if he or she

Can complete that task in less time than the other person

America's most significant trading partner is

Canada

If Cathy has an absolute advantage over Reid in cooking dinner, then

Cathy takes less time to cook dinner than Reid.

If Cathy has a comparative advantage over Reid in cooking dinner, then

Cathy's opportunity cost of cooking dinner is lower than Reid's opportunity cost of cooking dinner.

Something that can change incentives so as to make otherwise empty threats or promises is called a

Commitment device

The emergence of English as the de facto world language has ___ a comparative advantage in the production of books, movies, and popular music

Given English speaking countries

Protectionism is the view that free trade is

Harmful and should be restricted

The domestic consumers of ____ goods benefits from free trade

Imported

When the government imposes a quota on a good imported from abroad, it's price will tend to ___ relative to when there is free trade

Increase

Relative to an environment in which there is free trade, quotas tend to

Increase the price of goods imported from abroad

If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:

Les has an absolute advantage in producing pants.

In the language of international trade, "dumping" is the act of

Selling goods below cost so as to drive competitors out of business

A ____ is a tax imposed on an imported good

Tariff

If the government decides to enforce a quota by granting a limited number of import licenses, then the quota will tend to generate revenue for

The holders on the import license

The world price is

The price at which a good or service is traded on the world market

Of the following justifications for limiting trade, identify which one economists would be least likely to endorse. 1. Their production employs many people 2. They are imported for national identity 3. They are imported for national defense 4. Other countries use child labor to gain a comparative advantage

Their production employs many people

Suppose Damon and Destiny are auto mechanics. If we want to know which one has a comparative advantage in performing oil changes, then we would want to know ______.

Which one has the lowest opportunity cost of performing an oil change

One difference between a tariff and a quota is that

While a tariff generates revenue for the government, a quota does nkt

The price at which a good or service is traded on international markets is known as the

World price

The world price of a good in determined by the

Worldwide demand and supply of that goid

The United States generally has a comparative advantage in the development of technology because it has

a disproportionate share of the world's best research universities.

A dominant strategy exists if

a player has a strategy that yields the highest payoff regardless of the other player's choice.

Denise can knit 2 scarves per day and Jacob can knit 3 scarves per day. So, we know that Jacob has a(n) ____ advantage in knitting scarves.

absolute

If it takes a person less time to perform a task than anyone else, then that person has a _____ advantage in performing that task.

absolute

Joe and Rachel are roommates. Rachel takes 10 minutes to do the dishes, and Joe takes 15 minutes to do the dishes. So, we know that Rachel has a(n) ________ advantage in washing dishes.

absolute

Chris takes less time than Colin to wash a car. This implies that Chris has a(n) _____ over Colin in washing cars.

absolute advantage

Emotions like guilt and sympathy

can solve commitment problems.

OPEC is an example of a

cartel

If Tom's opportunity cost of performing a task is lower than Jerry's, then Tom has a(n) ____ advantage over Jerry in performing that task.

comparative

In general individuals and nations should specialize in producing those goods for which they have an

comparative advantage

In general, individuals and nations should specialize in producing goods ___ other individuals or nations

for which they have a lower opportunity cost compared to

A decision tree is used when modeling

games in which timing matters

Larry has a comparative advantage over his classmates in writing term papers if he:

has a lower opportunity cost of writing term papers than his classmates.

A credible threat is

in the threatener's interest to carry out.

A country is most likely to have a comparative advantage in the production of cars if

it has a relative abundance in the natural resources needed to produce cars.

One reason there is political opposition to international trade is that

not everyone benefits from trade

Most cartels cease to be effective because:

of the incentive to cheat on the cartel agreement.

An economy that trades with the rest of the world is an

open economy

The three elements of a game are

players, strategies, payoffs

A _______ is a legal limit on the quantity of a good that may be imported.

quota

In general, a nation can enjoy a higher standard of living by ___ than by being self sufficient

specialization and trading

Game theory provides tools that are used to model:

strategic interdependencies.

Zach and Alex both build furniture. If Zach has a comparative advantage in the production of tables, and Alex has a comparative advantage in the production of chairs, then both Zach and Alex can be made better off if Zach specializes in the production of _______ and if Alex specializes in the production of _______.

tables and chairs

There is a 5% average tax on imported goods in the United States. This tax is known as a(n):

tariff

A prisoners dilemma illustrates situations in which

there is a conflict between the narrow self-interest of individuals and the broader interests of a group.

A commitment problem exists when people cannot achieve their goals because

they cannot make credible threats or promises.

A prisoners dilemma is a game in which

the players' payoffs are smaller when both play their dominant strategy compared to when both play a dominated strategy.