chapter 9 problem set

comparative advantage a. may change as time passes and circumstances change b. is independent a countries skilled and unskilled labor quantities c. is determined by governments of nations across the globe d. is unlikely to change, once it has been defined

A. may change as time passes and circumstances change.

Who gains and who loses when a country imposes a tariff or a quota on imports of a​ good? Part 2 Suppose the United States imposes a tariff or quota on sugar imports. For each of the​ following, enter the letter G if it will gain from the tariff or quota or enter the letter L if it will lose from the tariff or quota. Domestic sugar producers and their workers consumers Industries that use sugar and their workers The U.S. economy

G L L L

Among the main sources of comparative advantage are the​ following: A. climate and natural​ resources, relative abundance of labor and​ capital, technology, external economies. B. climate and natural​ resources, relative abundance of labor and​ capital, technology, external diseconomies. C. climate and natural​ resources, relative scarcity of labor and​ capital, technology, external economies. D. climate and natural​ resources, relative abundance of labor and​ capital, inefficient​ technology, external economies.

a. climate and natural​ resources, relative abundance of labor and​ capital, technology, external economies.

are taxed imposed by a government on imports of a good into a country

tariffs

Briefly explain how international trade increases a country's consumption 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 good and services at different opportunity costs, ______ can be negotiated that will allow all countries to consume more with trade than in autarky.

Comparative opportunity terms of trade

what is the difference between absolute advantage and comparative advantage?

Comparative 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. The absolute advantage is the ability of an individual, a firm, or a country to produce more of a good or a service than competitors when using the same amount of resources. A country will always be an exporter of a good where it has a comparative advantage in production.

why didn't economists and policy makers expect the economics effect of imports from china to be as great as it turned out to be?

Economists and policymakers​ didn't expect the large number of job losses to occur so quickly.

_____ are goods and services produced domestically but sold to other countries

Exports

who is harmed when individual nations move from autarky to free trade?

The owners of the firms that went out of business.

An article in the New York Times states that​ "China's explosive rise was a shock to the global trading​ system." ​Source: Keith Bradsher and Steven Lee​ Myers, "Trump's Trade War Is Rattling​ China's Leaders," New York Times​, August​ 14, 2018. What does the article mean by​ "China's explosive​ rise"?

The surge in​ China's exports to the rest of the world over the last 35​ years, making China the​ world's leading exporting country. Your answer is correct. Part 2

which of the following describes the importance of international trade around the world? a. imports and exports remain a smaller fraction of GDP in the U.S. than in most other countries b. France is the only high-income country that is less dependent on international trade than the U.S. c. Japan is the only​ high-income country that is more dependent on international trade than the U.S. d. In some smaller countries such as​ Belgium, imports and exports make up less than 18 percent of GDP e. Rapid growth in Singapore over the past 20 years has resulted in it becoming the third largest exporter.

a. imports and exports remain a smaller fraction of GDP in the U.S. than in most other countries

​_____ 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

which of the following is not a main source of comparative advantage? A. technology B. climate and natural resources C. internal economies of scale D. relative abundance of labor and capital E. external economies of scale

c. internal economies of scale

By​ trading, countries are able to consume more than they could without trade. This outcome is possible because Part 4 A. shifting production to the more efficient countrylong dash—the one with the comparative advantagelong dash—increases total production. B. inefficiencies in resource allocation are reduced. C. world production of both goods increases after trade. D. all of the above.

d. all of the above

___ are goods and services bought domestically but produced in other countries

imports

Comparative advantage

is the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost

we do not see complete specialization in the real world because

not all goods and services are traded​ internationally, production of most goods involves increasing opportunity​ costs, and tastes for products differ.