Chapter 8 my Econ lab

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Acme Supply is analyzing a Production Possibilities Curve that compares production of wrenches ​(x​-axis) to production of pliers ​(y​-axis). If the slope of the PPC is 22​, the opportunity cost of producing pliers in terms of wrenches is

.5 (1/2)

The mercantilist economic doctrine was widely followed from the sixteenth to the eighteenth centuries in Europe. Mercantilists advocated the use of tariffs to restrict​ trade, as they believed that countries that export more than they import will increase wealth. What could be the problem with such an economic​ policy?

Consumers pay a price that is higher than the world​ price, reducing consumer surplus.

Which of the following is not a source of a​ country's comparative​ advantage

Exports

How has the pattern of trade changed in the United States since​ 1960?

Imports have grown faster than​ exports, and the United States has become a net importer.

What are the types of goods that are causing the shift in the balance of imports and exports in the United​ States?

Manufactured goods have played an important role in the​ shift, even though the number of manufactured goods has increased.

Why is free trade​ controversial

Some individuals may lose.

What is the problem with the argument that infant industries need to be protected from foreign​ competition

Starting a company in isolation may deprive it of​ "technological spillovers" that its​ competitors, all located near one​ another, may enjoy.

In which of the following scenarios would a country export a​ good?

The domestic price for the good is below the world price.

All of the following are factors that contribute to a​ country's comparative advantage​ except:

aging population

When economies open up to free​ trade, trading partners _________ benefit

always

On the Production Possibilities​ Curve, possible production levels are​ represented

at any point on or below the curve.

When a country engages in free​ trade, the​ "winners" compensate the​ "losers

can

Is it true that a country needs to have an absolute advantage in the production of a good in order to benefit from trade in that​ good? Countries that do not have an absolute advantage in the production of a good:

can benefit from trade

A linear PPC would show, a PPC that is curved away from the origin would show

constant opportunity cost, increasing opportunity cost

One reason economists in general_________, favor protectionism is because it, ____________ prices for consumers and ________ social surplus

do not, raises, lowers

Terms of trade is the

exchange rate of goods for goods.

Many​ service-sector jobs in the United States have moved to other countries where these jobs are done at a fraction of the cost. The outsourcing of jobs overseas is heavily debated by​ politicians, policymakers, and economists in the United States. In the domestic economy when outsourcing​ exists, prices __________, social surplus __________, and labor market welfare ________.

fall, increases, decreases

The economy as a whole benefits from outsourcing if the gain in social surplus is _______ the losses in labor welfare

greater than

If the domestic price for a good is lower than the world price when a country opens itself to​ trade, domestic suppliers will ___________, the price of the​ good, which in turn will _______ the domestic demand for the good.

increase, decrease

According to the principle of comparative​ advantage, both parties will engage in a trade if the trading​ price

lies between their opportunity costs

National security concerns might cause a nation​ to

maintain a variety of agricultural industries

One reason a country might seek to implement protectionist policies could be​ to

maintain its​ culture's uniqueness.

Absolute advantage is the ability of an​ individual, firm, or country to​ produce

more of a certain good than other competing​ producers, given the same number of resources

If a country had exports of ​320 billion and imports of ​130 ​billion, they would be considered a net

net exporter

All of the following shift the Production Possibilities Curve outward​ except

new competitors in the marketplace.

Terms of trade are determined​

on the basis of opportunity costs.

Complete specialization occurs when each​ individual, firm, or​ country

produces only what it has a comparative advantage in

When a country opens itself to trade and becomes an importer of goods and​ services, sellers _______ and buyers __________.

sellers lose, buyers win

The US labor force will consist of people over the age of 65, what will the production curve do:

shift inward

A production possibilities curve​ (PPC)

shows the relationship between the maximum production of one good for a given level of production of another good.

Which of the following is not one of the common arguments against free​ trade

taxes decrease, depriving government of needed revenues

If there are no​ "losers" in free​ trade, does it matter if wages and employment fall when a country engages in free​ trade?

yes, the government may not be able to effectively carry out such welfare transfers


Ensembles d'études connexes

Chapter 13: Transportation Management (Multi)

View Set