Econ Chapter 8, problems

Yes

Can countries that do not have an absolute advantage in production of a good benefit from trade?

Shift outward

Canada recently discovered large reserves of shale gas, as a result, Canada's PPC would do what?

Imports have grown faster than exports, US has become net importer

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

Consumers pay a price that is higher than the world price, reducing consumer suprlus

If country restricts trade so exports are higher, what could be a problem?

Prices fall, social surplus increases, labor market welfare decreases

In a domestic economy where outsourcing exists. What happens to prices? Social surpluses? Labor market welfare?

On the basis of opportunity costs

Terms of trade are determined by what or who?

Exchange rate of goods for goods

Terms of trade is the what?

Social surplus, labor welfare

The economy as a whole benefits from outsourcing if the gain in what is greater than the losses in what?

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

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

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

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

Always

When economies open up to free trade, trading partners benefit always, sometimes, or never?

Terms of trade

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

The quality of goods decrease as inferior goods are imported from lower-cost countries

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

Some individuals may lose

Why is free trade controversial?