Econ 201 ch. 7 homework

Imports

Are goods and services bought domestically but produced in other countries

Exports

Are goods and services produced domestically but sold to other countries

Tariffs

Are taxes imposed by a government on imports of a good into a country

How does the u.s government protect steelworkers in West Virginia at the expense of steelwork in South Korea?

By imposing a tariff on steel imports, the government protects U.S steel workers by reducing imports; however, that means South Korea is exporting less steel, which hurts steelworkers there

Which is the name given to the sale of a product for a price below it's cost of production?

Dumping

If a country had a comparative advantage in the production of a good, then that country:

Has a lower opportunity cost in the production of that good

The association formed to lower trade barriers and encourage trade between Canada, the United States and Mexico is known as

NAFTA

Which of the following groups of people are opposed to the world trade organization?

People who want to protect domestic firms

Which of the following arguments is used to justify protectionism

Tariffs and quotas protect infant industries

Which of the following would likely occur if the WTO collapsed and countries reverted to imposing tariffs on imports from other countries? Which groups would be made better off, and which groups would be made worse off? Briefly explain

The prices of those imported goods would rise, some firms would gain by selling more but others would lose from higher input prices, global trade would fall, exporting would be hurt, some consumers would pay higher price, and deadweight losses would arise in the economies of countries imposing the new tariffs

Which of the following is a source of comparative advantage?

The relative abundance of capital and labor

Some politicians argue that eliminating U.S. tariffs and quotas would help the U.S. economy only if other countries eliminated their tariffs and quotas in exchange.

This statement is​ false; the U.S. economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

What was the purpose of the WTO when it was established

To promote trade in market economies

The sugar quota in the United States creates winners and losers. The winners are __________ and the losers are __________.

U.S. sugar producers, U.S. sugar consumers

If trade with China during that period, often called the "China shock," destroyed 2.4 million jobs, how can Boudreaux claim that "trade is not a job killer"?

While trade with China eliminated jobs in u.s companies that were less efficient than foreign companies, it also created new jobs in u.s companies that export products to foreign markets

It would be possible for middle and lower income American to be both the biggest losers and at the same time the biggest winners from free trade if they are the ones most likely to

Work in industries that produce at higher opportunity cost than in other countries and purchase those goods that can be produced at lower opportunity cost in other countries

You and your neighbor pick apples and cherries. If you can pick apples at a lower opportunity cost than your neighbor can, which of the following is true?

You have a comparative advantage in picking apples.

Autarky

a situation in which a country does not trade with other countries

The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources is known as

absolute advantage

by trading, countries are able to consume more than they could without trade. this outcome is possible because

all of the above

A product produced in a foreign country and purchased by residents of the home country is called:

an import

Among the main sources of comparative advantage are the following

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

The global trend towards large multinational firms is partially driven by __________.

comparative advantage

Goods and services produced domestically but sold to other countries are called

exports

The opponents of globalization contend that

globalization destroys cultures

One effect of tariffs and quotas

is to cost jobs outside the industries immediately affected.

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.

The use of trade barriers to shield domestic companies from foreign competition is called

protectionism

multinational corporations expanding into foreign markets often

provide thousands of jobs for foreign nationals

A numerical limit on the quantity of a good that can be imported is a

quota

Protectionism is the use of trade barriers to shield domestic firms from foreign competition. Protectionism is usually justified on the basis of several arguments which include:

saving jobs, protecting infant industries, and protecting national security.

comparative advantage

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

terms of trade

the ratio at which a country can trade its exports for imports from other countries

The term external economies refers to

the reduction of costs resulting from industry concentration in a given area

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

voluntary export restraint