Macro Chap 7: International Trade

Which statement describes a source of comparative advantage?

Hawaii has a more favorable climate for the cultivation of tropical fruit than England has

A trade cost is

an extra cost incurred as a result of buying or selling a good abroad rather than domestically

Collectively, people in nations that engage in international trade are likely to:

consume more than they could consume in the absence of trade

Which of the following groups is most likely to oppose international trade?

domestic producers of imported goods and domestic consumers of exported goods

Your family's business, a manufacturer of plastic containers, depends on imports of recycled plastic pellets from Asia. Your supplier offers substantial volume discounts, so the larger is your order of plastic pellets, the lower are your production cost. your family benefits from:

economies of scale

A tariff or quota will _____ prices and _____ the consumption of the protected goods in the importing country

raise; decrease

In a single year, Germany can raise 100 tons of wheat or produce 1,000 boxes of daises. In the same growing season, France can raise 50 tons of wheat or produce 750 boxes of daises. When the two countries begin trading wheat for daises, consumer surplus from wheat consumption will:

fall in Germany

If a countries domestic price of a good is below the world price of the good, then with trade, the domestic quantity supplied of the good will be _______________ the domestic quantity demanded

greater than

Suppose the United States places a tariff on imported Brazilian ipe (a type of wood). As a result of the tariff, the domestic price of lumber will _____, consumer surplus will _____, and producer surplus will _____

rise; fall; rise

South Korea's comparative advantage in cellular technology can be attributed to:

specialized skills

Which of these is a source of comparative advantage?

specialized skills

the job creation argument for protection against free trade is

that restricting imports allows for greater domestic production

Your artisan candle stick manufacturing business is doing well domestically, so you decide to expand to other countries. As you would like to make many international sales, you hope

the dollar will depreciate against other currencies

If you and your partners assign various tasks for a project in the most efficient way possible, then it is likely that:

you got a task in which you have a comparative advantage