Economics 1022A/B Chapter Notes - Chapter 31: Informal Sector, Rent-Seeking, Offshore Outsourcing

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ECON 1022A/B Full Course Notes

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Imports: goods and services that we buy from other countries. Exports: goods and services that we sell to people in other countries. Comparative advantage is the fundamental force that drives international trade. National comparative advantage: a nation can perform an activity or produce a good/service at a lower opportunity cost than any other nation. In the left graph, with no international trade, price of t-shirt is and canada produces and buys 4 million t-shirts a year. In the right graph, world price of t-shirt is lower, so price of t-shirt in canada falls to with international trade. Canadian producers produce 2-million t-shirts and canadian consumers purchase 6 million t-shirts. In the left graph, with no international trade, price of a regional ret is million and. Canada produces and buys 40 regional jets a year. In the right graph, world price is greater than canada"s price, so price of regional jet rises to million with international trade.

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

5. Canada goes to considerable lengths to protect its television program and magazine producers from U.S. competitors. The United States often seeks protection from food imports from Canada. From an economywide viewpoint, these efforts are:

a. Political motivations to impose government control over various aspects of the two economies

b. Desirable since they protect the jobs of entertainment workers in Canada and farmers in the U.S.

c. Desirable since without them Canadian cultural identity will be weakened and the U.S will suffer food shortages.

d. Misguided because the enhanced output from specialization based upon comparative advantage is restricted.

8. Germany and China are countries that trade with each other. If Germany has a comparative advantage in cars and China has a comparative advantage in shoes, which of the following is a correct statement about the effects of trade between these nations?

a. Both countries will lose jobs through trade and be worse off

b. There will be a net loss of employment in China

c. Both countries are likely to be better off, and world production will increase

d. Germany will lose jobs in the car industry

10. Money Prices 2003 2004

Hospital Room(1-day) $250 $275

Hotel Suite (1- night) $350 $375

Based on the table above which of the following is true?

a. The money prices of both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased

b. The money prices of both goods increased the relative price of hospital rooms decreased and the relative price of hotel suites increased.

c. The money prices of both goods increased and the relative prices of both goods increased.

d. The money prices of both goods increased and the relative prices of both goods decreased.

brownraccoon469

Which of the following is TRUE regarding international trade?

Select one:

a. Typically, it is belived that when countries trade with one another, ther eare gains in production efficiency.

b. All of these are correct

c. Freedom to trade internationally adds to the consumers' choices available for purhcase

d. Countries often hope that international trade will help raise the standard of living for their citizens

Question 2

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Which of the following is TRUE regarding why countries trade with one another?

Select one:

a. Countries trade so that they can get products and services that they are not as efficient in making as other countries.

b. Countries often hope that international trade will help their economy grow

c. All of these are correct

d. Countries trade because not all nations have the same resources.

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Revenue tariffs are levied to

Select one:

a. lower exports.

b. protect domestic producers.

c. increase imports.

d. raise money.

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Tariffs and quotas can have all of the following effects EXCEPT

Select one:

a. protecting domestic industry.

b. reducing trade deficits.

c. increasing prices consumers pay for goods.

d. promoting third-world development.

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The United States trade deficit causes

Select one:

a. the value of the dollar to fall in foreign exchange markets.

b. immediate worldwide recessions.

c. increased employment opportunities for all Americans.

d. the value of the dollar to strengthen in foreign exchange markets.

Question 6

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Which of the following is true regarding the relationship of international trade and competition?

Select one:

a. International competition, like competition in general, can have effects on the price levels of goods.

b. When countries trade with one another, there is often increased competition among firms offering the same good or service.

c. All of these are correct.

d. When tariffs increase, domestic producers usually have fewer international competitors.

apricotlizard520

Economics 1022A/B Chapter Notes - Chapter 31: Informal Sector, Rent-Seeking, Offshore Outsourcing

ECON 1022A/B Full Course Notes

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Related Questions

Question 1

Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

		World Trade Organization
		United Nations
		European Central Bank
		International Human Rights Commission

		import; the lowest
		import; negative
		export; the lowest
		export; the highest

		increased all
		removed some
		removed all
		increased some

		Only one
		No
		Every
		Only 3

		1930s.
		1950s.
		1970s.
		1990s.