Learning curve ch 9

shielded fledgling businesses from international competition.

Brazil banned imports of computers for many years, hoping that new Brazilian businesses would spring up to meet demand and, through time, would develop efficient production methods. As a result, computer prices in Brazil were high, and several inefficient computer businesses eventually went bust. This happened because Brazil's government:

ensure a reasonable standard of living for the workers involved.

"Fair-trade" advocates argue that we should pay higher prices for imports—high enough to:

more cooperation from overseas.

Anxiety about globalization is not just about economics. The closure of an auto plant is not just about lost jobs; it can progress to multiple circumstances EXCEPT: a. more cooperation from overseas. b. the death of a city. c. the end of a particular way of life. d. the loss of local traditions.

raises the incomes of high‐skilled

As trade costs fall, foreign demand for U.S. software will increase. In this case, globalization _____ workers in the United States.

They are pleased because the higher price means more profits and increased quantities.

By importing shirts from overseas, American consumers enjoy a lower price of shirts. When the government imposes a tariff on imported shirts, it also gains tax revenue. As international trade brings more competition from overseas, how does the tariff affect domestic shirt suppliers in the United States?

not just about business; consumers matter, too

Compared to the general public, economists have different views on international trade. For example they believe that trade is

smooth out reassigning people to different pie-making roles.

Economists believe that trade increases the size of the pie in the long run. However, they should also pay more attention to the short-run disruption to:

Opportunity costs have risen.

Globalization is one of the most important forces in your lifetime. What is NOT causing economic opportunities to extend across national borders?

comparative advantage; opportunity cost is lower

Instead of making everything yourself, you should specialize in those activities where you have a(n) _____, because this means your _____ than that of others.

different productivity.

Many people worry that globalization may force U.S. wages down to the low levels seen in countries like China or India. Fortunately, wages aren't going to be equalized anytime soon, because workers in each country have:

productivity 19 times

On average, U.S. manufacturing workers earn $39 per hour, compared to $2.05 in the Philippines. This means that American manufacturing workers have _____ higher than their Filipino counterparts.

productivity; lower

On average, U.S. manufacturing workers earn $39 per hour, compared to $43 in Germany. This means that the _____ of an average American manufacturing worker is _____ than that of their German counterpart.

trade is not just about economics.

One of the blind spots of the economic thought about trade is that:

processed coffee

The United States is still protectionist and maintains high tariffs on imported products in a few areas EXCEPT: a. dairy products b. tobacco c. coffee d. sugar

1.9; broadly encourages international trade

The average tariff charged on imports into the United States is _____% because the United States

The price of watermelons in the United States will fall to $3.

The world price for watermelons is $3 each. In the United States, the price for watermelons is $6 each. What will happen to the U.S. market for watermelons when imports are allowed?

Prices of products

Trade costs occur as a result of buying or selling your goods overseas. Which one of these is NOT considered as a trade cost?

The country will export T-shirts.

What will happen if the world price of T-shirts is above a country's domestic price?

people, rather than countries

When economists talk about trade, they talk about

less competition and higher prices

When foreign firms successfully dump their goods on the U.S. market, this leads to _____ in the long run, which is bad for American consumers.

consider its implications in an analogous setting.

A letter from the American light-bulb manufacturers about the cheap imports of light shows us that one way to assess the validity of an argument is to:

the benefits of mass production

Ikea sells millions of Billy bookcases each year to buyers all around the world. It sells so many of them because the Billy bookcase is so cheap. When you're producing millions of bookcases, you can invest in creating incredibly specialized production lines that are much more efficient. This virtuous cycle arises because of _____.

protecting national security

The argument about _____ has a broader interpretation that suggests that we also need to protect domestic sources of food, so that we can eat if today's trading partners become tomorrow's enemies.

protecting national security

A counterargument for _____ is that sometimes trade limitations actually undermine this. For example, limiting exports of encryption software actually helped foreign competitors develop encryption technology, by reducing the competition from superior U.S. products.

is good for americans

The five arguments for limiting international trade that are the discussed in the chapter all argue whether or not international trade:

you are selling some of your labor to China

Imagine that you work for Boeing, building airplanes. Each plane from your production line embodies some of your labor, so every time one of these planes is exported to China, this means that _