Final exam international trade

The terms of trade for a country which imports 7 tons of steel and exports 14 cars is 2 cars per ton of steel.

2 cars per ton of steel

If one person has a (blank) in one good, then the other person must have (blank) in the other.

Comparative advantage; comparative advantage

Mexican government dictates that 45% of the total value of a TV set produced in the country must be produced domestically for that TV to be sold in Mexico. In this case, Mexico is imposing which of the following trade barrier?

Domestic content requirement

International trade is based on the notion that:

Goods are more mobile internationally than are resources

(blank) occur when the economy is not achieving its fullest productive potential.

Inefficiencies in production

Suppose that the United States eliminates its tariff on sugar, For U.S. consumers,:

Sugar prices would decrease, and the foreign demand for U.S. chocolate exports would increase

Which of the following is true about trade?

The distribution of happiness and surplus value depend on the terms of trade

In order to guarantee continued production of a good after trade, a country must have:

a comparative advantage

Eastland is levying a tariff rate of 11% against t-shirt imports. The tariff type the country imposes is:

ad valorem

Which of the following industry is most likely to be protected for strategic reasons?

agriculture

Rose can produce 10 strawberries but only 3 cherries in an hour. Jack can produce 3 strawberries or 10 cherries. Which of the following is NOT correct regarding to the above sample?

all is true

Which of the following are examples of nontariff barriers?

all of the above

Which of the following international trade theories specifies the importance of maintaining a forward momentum to prevent liberalization efforts from being stalled?

bicycle theory

If a country has a straight (downward sloping) production possibilities frontier, then production is said to be subject to

constant opportunity costs

Consider a Ricardian model with two countries, England and Portugal, producing two goods, wheat and corn. Suppose the unit labor requirements in wheat production are aLWEng = 1/2 hour per bushel and aLWPort = 1/3 hour per bushel, while the unit labor requirements in corn are aLCEng = 1/2 hour per lb and aLCPort = 1/4 hour per lb. Which country has the comparative advantage in wheat?

england

Prior to international trade, the price of ceramic cup is lower in Homeland than in Fomeland. This means that we know that

homeland has an absolute advantage in the production of ceramic cups.

Which of the following is a nontariff barrier imposed by a domestic country to restrict imports?

import licenses

A qualifying argument in favor of tariffs is the most significant economic justification has been on the:

infant industry argument

If an individual, or country, is absolutely better at producing all goods and services, then its comparative advantage goods will be those in which its productivity advantage is:

largest

To have a(n) _____ means that it is cheaper to produce something (lower labor cost) and that one is more efficient in production (higher productivity).

production potential

A primary reason why nations conduct international trade is because:

resources are not equally distributed among all trading nations

If an individual, or country, is absolutely worse at producing all goods and services, then its comparative advantage goods will be those in which its productivity disadvantage is:

smallest

Honesty is _____ to guarantee mutual benefits, but it is not a(n) _____.

sufficient; necessity

In addition to motivation to increase utility, _____ is also necessary for trade.

willingness to cooperate