ECON 15

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

According to the theory of comparative advantage, specialization and free trade will benefit:

all trading partners who specialize in goods where they have comparative advantage

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

an import

Countries gain from specializing in producing goods in which they have a(n) __________

comparative advantage

Countries gain from trading for goods in which other countries have a(n)

comparative advantage

When a good is​ imported,

consumers gain because they pay a lower price and increase the quantity they consume

With the​ tariff, the increased domestic production .

could have been obtained at a lower cost as an import

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

exports

A tariff creates a social loss

from the decreased quantity of the good consumed at the higher price.

consumer loses when....

good is exported to them

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

has a lower opportunity cost in the production of that good

When nations specialize in their comparative advantage and engage in trade:

overall standards of living increase

The net gain from international trade is

positive.

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

protectionism

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

quota

The cost of saving jobs through trade barriers like tariffs and quotas is:

relatively high

U.S. sugar producers benefit because the quota

restricts the supply of sugar in the U.S. and drives prices higher.

A tax imposed by a government on imported products is called a:

tariff

the United States goes from a​ free-trade policy to a​ no-trade policy with other countries. Which of the following is a result of this new​ policy?

the U.S. no longer consumes outside its production possibilities frontier

With the​ tariff, part of

the higher price paid to domestic producers pays the higher cost of domestic production.

When a good is​ exported

the price paid by the consumer rises and the quantity consumed decreases.

An agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is known as a(n):

voluntary export restraint

producers gain more than consumers lose

with exports.

Consumers gain more than producers lose with​ imports

with​ imports