Ag Econ International Trade

Tariffs:

. may be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs).

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

. the infant-industry argument

"NAFTA" stands for:

North American Free Trade Agreement

Other things equal, economists would prefer:

free trade to tariffs and tariffs to import quotas.

Countries engaged in international trade specialize in production based on:

comparative advantage

Differences introduction efficiencies among nations in producing a particular good result from:

different endowments of fertile soil, amounts of skilled labor, levels of technological knowledge.

Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will:

export wheat.

Suppose the domestic price (no-international-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will:

import copper

In the theory of comparative advantage, a good should be produced in that nation where:

its cost is least in terms of alternative goods that might otherwise be produced.

In a two-nation model, the equilibrium world price will occur where

one nation's export supply curve intersects the other nation's import demand curve.

The primary gain from international trade is:

tariff revenue

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-sufficient if necessary?

the diversification-for-stability argument

The World Trade Organization:

was established to resolve disputes arising under world trade rules.