ECON 001A Lecture Notes - Lecture 1: Comparative Advantage

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greendonkey344

28 May 2020

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Trade makes people better off when preferences differ. Productivity increases from division of knowledge and specialization. Comparative advantage - increases productivity and consumption. A horizontal line indicates the price at which the good could be imported from foreign countries, i. e. , the world price. Protectionism is the economic policy of restraining trade through quotas, tariffs or other regulations. Quotas (limits on the quantity of imports) Regulations that burden foreign (but not domestic) producer. Help other countries overcome poverty decrease child labor. Spillover - benefits that go beyond those of the specific good. The objective is to raise price and increase net revenue from the sale of exports. Problem: other countries often retaliate by imposing their own tariffs on the products the protectionism country exports to them. It only works if you have few subsidies for the exported good around the world http://web. ics. purdue. edu/~bvankamm/files/210%20notes/08%20-

Related Questions

Answer True or False for each of the following.

International trade benefits both partners, though not necessarily all citizens.

Absolute advantage determines trade specialization.

Tariffs are generally preferred by economists over quotas.

The U.S. has a large trade deficit with China, although its size is exaggerated.

Most American economists support at least relatively open trade.

Over time the terms of trade tend to move against final goods.

International trade typically increases competition and efficiency in an economy.

If a country is better at making all goods than another country there is no room for trade between the two.

The industrial world currently has the most open trade it has ever had.

Foreigners own more of the national debt today than 40 years

3. Answer True or False for each of the following. 3 points each.

International trade benefits both partners, though not necessarily all citizens.

Absolute advantage determines trade specialization.

Tariffs are generally preferred by economists over quotas.

The U.S. has a large trade deficit with China, although its size is exaggerated.

Most American economists support at least relatively open trade.

Over time the terms of trade tend to move against final goods.

International trade typically increases competition and efficiency in an economy.

If a country is better at making all goods than another country there is no room for trade between the two.

The industrial world currently has the most open trade it has ever had.

Foreigners own more of the national debt today than 40 years

ultramarineantelope495

Question 1

In 2003, the ________ ruled that U.S. tariffs on steel imported from the EU were unfair and allowed the EU to issue retaliatory tariffs on U.S. products.

World Trade Organization

United Nations

European Central Bank

International Human Rights Commission

Question 2

The idea of the U.S.-Canadian Free-Trade Agreement that ________ barriers to trade including tariffs and quotas between the United States and Canada by 1998 was to increase the amount that the United States exports to Canada and the amount that the United States imports from Canada.

increased all

removed some

removed all

increased some

Question 3

According to the theory of comparative advantage, a country should specialize and ________ goods with ________ opportunity cost.

import; the lowest

import; negative

export; the lowest

export; the highest

Question 4

A quota is a restriction on imports.

True

False

Question 5

If Holland decreases subsidies to its tulip growers, the price of tulips in the United States will rise.

True

False

Question 6

According to comparative advantage, trade between two countries allows ________ of the trading countries to use its resources most efficiently.

only the smaller

only the larger

neither

each

Question 7

________ U.S. president(s) who has/have held office since GATT was signed has argued for free-trade policies, yet each one has used his powers to protect various sectors of the economy.

Only one

No

Every

Only 3

Question 8

In 1991, the European Union began the process of forming the

		largest free-trade zone in the world.
		only continental military force in the world.
		first international trade agreement in the world.
		first unified currency in the world.

Question 9
1. The Smoot-Hawley tariff set off an international trade war in the
  
  1930s.
  
  1950s.
  
  1970s.
  
  1990s.
  
  Please help me with these questions Thank you.

magentadeer293

ECON 001A Lecture Notes - Lecture 1: Comparative Advantage

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