01:220:102 Chapter Notes - Chapter 8: Qst, Import Quota, Economic Surplus

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3 Oct 2016

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Goods and services purchased from other countries are imports; goods and services sold to other countries are exports. Globalization is the phenomenon of growing economic linkages among countries. Hyperglobalization is the phenomenon of extremely high levels of international trade. The ricardian model of international trade analyzes international trade under the assumption that opportunity costs are constant. Autarky is a situation in which a country does not trade with other countries. In fact, the consumption choices of a country reflect both the preferences of its residents and the relative prices the prices of one good in terms of another in international markets. One requirement that the relative price must satisfy is that no country pays a relative price greater than its opportunity cost of obtaining the good in autarky. Economists who study international trade have found three main sources of comparative advantage: international differences in climate, international differences in factor endowments, and international differences in technology.

Related Questions

what is a key factor that determines a firm's profitability?

A differentiation of a firm's product from other products

B factors affecting a firm's entire market

C a firm's average cost of production relative to that of competing firms

D chance events

E all of the above

economic theory suggests countries benefit from international trade by producing more of those good and services for which they have a comparative advantage (and less of that for which a country does not have a comparative advantage). However, countries rarely specialize completely, why?

even with international trade, countries rarely specialize completely because

A, all goods and services can be traded internationally

B, some countries would lose as a result of free trade

C, consumers in different countries have homogeneous tastes

D, some countries do not have an absolute advantege producing anything

E, production of most goods involves increasing opportunity costs.

18. In the Heckscher-Ohlin model, when two countries begin to trade with each other

a. the relative prices of traded goods in the two countries converge.

b. the relative factor prices in the two countries diverge.

c. all factors in both countries will gain from trade.

d. all factors in one country will gain, but there may be no gains in the other country.

e. benefits from trade are evenly distributed between the two countries.

19. In the Heckscher-Ohlin model, when there is an international-trade equilibrium

a. the workers in the capital-abundant country will earn less than those in the capital-scarce country.

b. the capital-abundant country will charge less for the capital intensive good than the price paid by the capital-scarce country for the capital-intensive good.

c. the capital-abundant country will charge more for the capital intensive good than the price paid by the capital-scarce country for the capital-intensive good.

d. the workers in the capital-abundant country will earn more than those in the poor country.

e. the relative price of the capital intensive good in the capital-abundant country will be the same as that in the capital-scarce country.

pucesnail109

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

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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.

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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.

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01:220:102 Chapter Notes - Chapter 8: Qst, Import Quota, Economic Surplus

01:220:102 Full Course Notes

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