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Exam 39: International Trade

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Question 51

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Answer the question on the basis of the following production possibilities tables for two countries,Latalia and Trombonia: $\begin{array}{c}\quad\quad\quad\underline{ \text {Latalia's Production Possibilities }}\\\begin{array}{lll}\\ \text {Pork (Tons) }\\ \text {Beans (Tons) }\end{array}\begin{array}{c}\underline{\text {A}}\\4\\0\end{array}\begin{array}{c}\underline{\text {B}}\\3\\5\end{array}\begin{array}{c}\underline{\text {C}}\\2\\10\end{array}\begin{array}{c}\underline{\text {D}}\\1\\15\end{array}\begin{array}{c}\underline{\text {E}}\\0\\20\end{array}\end{array}$ $\begin{array}{c}\quad\quad\quad\underline{\text {Trombonia's Production Possibilities }}\\\begin{array}{lll}\\ \text {Pork (Tons) }\\ \text {Beans (Tons) }\end{array}\begin{array}{c}\underline{\text {A}}\\8\\0\end{array}\begin{array}{c}\underline{\text {B}}\\6\\6\end{array}\begin{array}{c}\underline{\text {C}}\\4\\12\end{array}\begin{array}{c}\underline{\text {D}}\\2\\18\end{array}\begin{array}{c}\underline{\text {E}}\\0\\24\end{array}\end{array}$ Refer to the tables.In Latalia the domestic real cost of 1 ton of pork:

A) is 3 tons of beans.
B) diminishes with the level of pork production.
C) is 5 tons of beans.
D) is 1/5 of a ton of beans.

E) A) and B)
F) A) and C)

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Question 52

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The increased-domestic-employment argument for tariff protection holds that:

A) domestic inflation is a desirable policy goal because it stimulates exports.
B) domestic deflation is a desirable policy goal because it stimulates imports.
C) an increase in tariffs will reduce net exports and stimulate domestic employment.
D) an increase in tariffs will increase net exports and stimulate domestic employment.

E) A) and B)
F) A) and C)

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Question 53

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If a nation has a comparative advantage in the production of X,this means the nation:

The percentage of the United States' domestic output that is derived from international trade is higher than that for any other industrially advanced nation.

If two nations have straight-line production possibilities curves:

The equilibrium world price of a product equates the quantities of exports supplied and imports demanded.

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:

Which of the U.S.industries below has not seen major shutdowns and layoffs because of free foreign trade?

"NAFTA" stands for:

Which country has the largest share of total world exports?

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

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.If Alpha had produced 20X and 30Y and Beta had produced 30X and 20Y before specialization and trade,then we can say that the gains from specialization and trade are 10X and 10Y.

(Consider This) The greatest benefit to an economy from international trade is:

A nation will neither export nor import a specific product when its:

In the real world,specialization is rarely complete because:

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 a $1-per-unit tariff,price and total quantity sold will be:

Other things equal,a tariff is:

The number of countries belonging to the World Trade Organization (WTO) ,as of 2013,is about:

A tariff can best be described as:

Answer the question on the basis of the following production possibilities data for two countries,Alpha and Beta,which have populations of equal size. $\begin{array}{c}\quad\quad\underline{\text { Alpha's Production Possibilities }}\\\begin{array}{lll} \\ \text {Fish (Tons) }\\ \text {Chips (Tons) } \end{array}\begin{array}{c}\underline{\text {A }}\\ 80 \\0\end{array}\begin{array}{c}\underline{\text {B }}\\ 60 \\5\end{array}\begin{array}{c}\underline{\text {C }}\\ 40 \\10\end{array}\begin{array}{c}\underline{\text {D }}\\20 \\15\end{array}\begin{array}{c}\underline{\text {E }}\\0 \\20 \end{array}\end{array}$ $\begin{array}{c}\quad\quad\underline{\text { Beta's Production Possibilities }}\\\begin{array}{lll} \\ \text {Fish (Tons) }\\ \text {Chips (Tons) } \end{array}\begin{array}{c}\underline{\text {A }}\\240 \\0\end{array}\begin{array}{c}\underline{\text {B }}\\ 180 \\10\end{array}\begin{array}{c}\underline{\text {C }}\\120 \\20\end{array}\begin{array}{c}\underline{\text {D }}\\60 \\30\end{array}\begin{array}{c}\underline{\text {E }}\\0 \\40 \end{array}\end{array}$ Refer to the given data.Beta: