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Exam 39: International Trade

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Question 41

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Which of the following best describes economists' general assessment of the impacts of offshoring?

A) Offshoring has an overall negative impact on the U.S.economy because of the significant domestic job losses it causes.
B) Offshoring benefits the U.S.economy by promoting greater specialization and exchange of goods and services based on comparative advantage.
C) Offshoring provides some cost advantages but generally results in much-lower-quality goods for consumers.
D) Job losses from offshoring are magnified by job losses in complementary industries.

E) All of the above
F) A) and B)

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Question 42

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The World Trade Organization is comprised of 28 European nations and dedicated to abolishing trade barriers and integrating their economies.

A) True
B) False

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Question 43

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The "eurozone":

Answer the question on the basis of the following domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. $\begin{array} { c c c } \begin{array} { c } \text { Quantity } \\\text { Supplied } \\\text { (Domestic) }\end{array} & \text { Price } & \begin{array} { c } \text { Quantity } \\\text { Demanded } \\\text { (Domestic) }\end{array} \\ 12 & \$ 5 & 2 \\10 & 4 & 4 \\7 & 3 & 7 \\4 & 2 & 11 \\1 & 1 & 16\end{array}$ Refer to the given data.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Economists generally view offshoring as detrimental to the U.S.economy.

Countries engaged in international trade specialize in production based on:

U.S.exports of goods and services (on a national income account basis) are about:

Answer the question on the basis of the following data for the hypothetical nations of Alpha and Beta.Q_s is domestic quantity supplied and Q_d is domestic quantity demanded. $\begin{array}{c}\underline{\text { Domestic Market For Steel, Alpha }}\\\begin{array}{c}\underline{Q_{s}}\\ 60\\40\\30\\20\\10 \end{array}\begin{array}{c}\underline{P}\\\$ 5 \\4 \\3 \\2 \\1 \end{array}\begin{array}{l}\underline{Q_{d}} \\10 \\20 \\30 \\40 \\50 \end{array}\end{array}$ $\begin{array}{c}\underline{\text { Domestic Market For Steel, Beta }}\\\begin{array}{c}\underline{Q_{s}}\\ 80 \\70 \\60 \\50 \\40\end{array}\begin{array}{c}\underline{P}\\\$ 5 \\4 \\3 \\2 \\1 \end{array}\begin{array}{l}\underline{Q_{d}} \\20 \\30 \\40 \\50 \\60 \end{array}\end{array}$ Refer to the given data.At a world price of $2:

Answer the question on the basis of the following production possibilities data for Gamma and Sigma.All data are in tons. Gamma's production possibilities: $\begin{array}{llcc}&\underline{\text { A } }&\underline{\text {B}}&\underline{\text { C} } &\underline{\text { D } }&\underline{\text {E}}\\\text { Tea } &120&90&60&30&0\\\text { Pots}&0&30&60&90&120\end{array}$ Sigma's production possibilities: $\begin{array}{llcc}&\underline{\text { A } }&\underline{\text {B}}&\underline{\text { C} } &\underline{\text { D } }&\underline{\text {E}}\\\text { Tea } &120&90&60&30&0\\\text { Pots}&0&30&60&90&120\end{array}$ Refer to the given data.Assume that before specialization and trade,Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage,the gains from specialization and trade will be:

Tariffs:

Answer the question on the basis of the following information.Assume that by devoting all its resources to the production of X,nation Alpha can produce 40 units of X.By devoting all its resources to Y,Alpha can produce 60Y.Comparable figures for nation Beta are 60X and 40Y. Refer to the given information.Alpha should specialize in Y and Beta in X.

Frederic Bastiat's satirical argument against protectionism called for protecting domestic producers from:

"Offshoring" refers to:

Which of the following is an example of a capital-intensive commodity?

In effect,tariffs on imports are:

Export supply curves are __________________;import demand curves are ___________________.

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n) :

Answer the question on the basis of the following information about the cost ratios for two products-fish (F) and chicken (C) -in countries Singsong and Harmony.Assume that production occurs under conditions of constant costs and these are the only two nations in the world. Singsong: 1F = 2C Harmony: 1F = 4C Refer to the given information.Which one of the following would not be feasible terms for trade between Singsong and Harmony?

Answer the question on the basis of the following data for the hypothetical nations of Alpha and Beta.Q_s is domestic quantity supplied and Q_d is domestic quantity demanded. $\begin{array}{c}\underline{\text { Domestic Market For Steel, Alpha }}\\\begin{array}{c}\underline{Q_{s}}\\ 60\\40\\30\\20\\10 \end{array}\begin{array}{c}\underline{P}\\\$ 5 \\4 \\3 \\2 \\1 \end{array}\begin{array}{l}\underline{Q_{d}} \\10 \\20 \\30 \\40 \\50 \end{array}\end{array}$ $\begin{array}{c}\underline{\text { Domestic Market For Steel, Beta }}\\\begin{array}{c}\underline{Q_{s}}\\ 80 \\70 \\60 \\50 \\40\end{array}\begin{array}{c}\underline{P}\\\$ 5 \\4 \\3 \\2 \\1 \end{array}\begin{array}{l}\underline{Q_{d}} \\20 \\30 \\40 \\50 \\60 \end{array}\end{array}$ Refer to the given data.At a world price of $5:

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.