Achieve Chapter 9

During the 2016 presidential campaign, Bernie Sanders, a Democratic candidate, and Donald Trump, a Republican candidate both denounced NAFTA as having a negative impact on jobs in the United States. In particular, they cited the impact on manufacturing jobs. Free trade agreements may lead to reduced outputs and the loss of American jobs in certain industries because (a) in industries in which the United States has a comparative advantage, domestic firms typically lose market share (b) in industries in which a trading partner has a comparative advantage, domestic firms typically lose market share (c) in industries in which a trading partner has a higher opportunity cost, domestic firms typically gain market share (d) in industries in which the United States has a lower opportunity cost, foreign firms typically gain market share

(b) in industries in which a trading partner has a comparative advantage, domestic firms typically lose market share

Which is an example of a Tariff? (a) a regulation specifying that each imported Honda scooter must meet certain emission exhaust guidelines (b) a limit on the total number of Honda scooters imported from Japan (c) A tax of 5% of the value of each Honda scooter imported from Japan (d) a tax of $250 on each Honda scooter produced in the United states

(c) a tax of 5% of the value of each Honda scooter imported from Japan

Columbian's main exports include coffee, flowers, bananas, and tropical fruit. Columbian exports these particular goods because (a) countries including the United States have strong demand for these goods but an insufficient capacity to produce them. Production of these goods is therefore is outsourced to countries such as Columbia (b) Columbians have more of a taste for these goods than people in other countries. Columbia, therefore, produces more of these goods with the surplus sent abroad (c) Columbia is more efficient in the production of goods and services in general than other countries. It is therefore not surprising that Colombia is more efficient in the production of the goods listed and exports them (d) Climatic conditions - mild temperatures, substantial rainfall, plentiful sunlight - make Columbia relatively more suitable for the cultivation of these goods than other countries

(d) Climatic conditions - mild temperatures, substantial rainfall, plentiful sunlight - make Columbia relatively more suitable for the cultivation of these goods than other countries

The North American Free Trade Agreement (NAFTA), signed in 1994 reduced trade barriers between the United States, Canada and Mexico. NAFTAs supporters argued that lower trade barriers would reduce consumer prices and that increased trade would create more jobs in the United States. Identify the reason or reasons why the creation of NAFTA could lead to lower consumer prices and job creation in the United States. (i) industries in which the United States has a higher opportunity cost relative to Mexico and Canada thereby creating more jobs in the United States (ii) Industries in which the United States has a comparative advantage will likely grow, thereby creating more jobs in the United States (iii) Mexico and Canada are likely to have higher opportunity costs than the United States in the production of some consumer gods. As a result, American consumers will pay higher prices for the goods (iv) Mexico and Canada are likely to produce some Comsumer goods previously produced in the United States at a lower opportunity cost. As a result, American consumers will pay lower prices for these goods

(ii) and (iv)

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument If foreign importers do not meet US requirements regarding child labor, safety and the environment, they will have an unfair coast advantage over domestic firms. This statement __________________ the _____________ argument

- Supports - Fair Standards

Since the United Kingdom imports a large quantity of textiles from Sri Lanka, the overall wages of English textile workers have ____________, while the price of textiles in the United Kingdom has ___________

- decreased - decreases

As globalization leads the United States to export more goods produced in skill-intensive sectors, real wages in these sectors will generally_______________. As globalization leads the US to import more goods produced in low-skilled sectors, real wages will generally _____________

- increase - decrease

A tariff ________ the price received by domestic producers and ________ the price paid by domestic consumers

- increases - increases

In January 2018, President Donald Trump imposed a tariff of 20% to 50% on imported home washing machines. This prompted Whirlpool, which produces residential washing machines in the United States, to announce plans to hire 200 additional workers Two months later, President Trump imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports. Whirpool quickly felt the impact of these tariffs on its production costs. In June 2018, the US Department of Labor estimated that the cost of washing machines had increased by 17% The steel and aluminum tariffs may________impact Whirlpools hiring plans because these tariffs would _____________Whirlpools production costs, ____________ its comparative advantage

- negatively - raise - reducing

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument Labor and environmental requirments that are appropriate for a devloped, wealthy economy may not be appropriate for less devloped, poorer nations. This statement ___________ the ________argument

- opposes - fair standards

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument Industires that are protected from foreign competition often ever develop to a point where they can compete internationally. This statement __________ the ___________ argument

- opposes - infant industry

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument A country rarely relies on a single international source for strategic goods. This statement ________ the ______ argument

- opposes - national security

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument Lower priced goods from abroad often result from comparative advantage rather than unfair competion. This statement _________ the____________ argument

- opposes - unfair competition

In January 2018, President Donald Trump imposed a tariff of 20% to 50% on imported home washing machines. This prompted Whirlpool, which produces residential washing machines in the United States, to announce plans to hire 200 additional workers The tariffs on washing machines is likely to have a positive effect on employment because they _____________ the price of the washing machines in the United States, ____________ the quantity of washing machines supplied domestically

- raise - increasing

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument If a fledgling industry is temporally shielded from foreign competition, it can ultimately become globally competitive. This statement _____________ the ___________ argument

- supports - infant industry

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument A country must be able to access strategically important goods, such as weapons, oil, and food, if trade were to cease, as during a war. This statement __________ the _________argument

- supports - national security

Consider each argument for limiting international trade - The national security argument suggests that national security requires that strategically important goods be produced domestically - the infant industry argument suggests that protection can help infant industries develop - the unfair competition argument suggests that anti-dumping laws prevent unfair competition -the fair standards argument suggests that trade should not enable firms to skirt regulations Determine which argument each statement is related to and whether the statement supports or opposed the argument Foreign firms sometimes temporally change below-cost prices, driving US competitors out of business. This statement _________________ the ___________argument

- supports - unfair competition