• Home
  • Textbooks
  • Economics: Principles, Problems, and Policies
  • International Trade

Economics: Principles, Problems, and Policies

Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn

Chapter 38

International Trade - all with Video Answers

Educators

Chapter Questions

01:36

Problem 1

In Country $\mathrm{A},$ a worker can make 5 bicycles per hour. In Country $B$, a worker can make 7 bicycles per hour. Which country has an absolute advantage in making bicycles? $L O 38.2.$
a. Country A.
b. Country B.

Daniel Cisneros
Daniel Cisneros
Numerade Educator
06:04

Problem 2

In Country $\mathrm{A}$, the production of 1 bicycle requires using resources that could otherwise be used to produce 11 lamps. In Country $B$, the production of 1 bicycle requires using resources that could otherwise be used to produce 15 lamps. Which country has a comparative advantage in making bicycles? $L O 38.2.$
a. Country A.
b. Country B.

Natalie Britton
Natalie Britton
Numerade Educator
06:09

Problem 3

True or False: If Country $\mathrm{B}$ has an absolute advantage over Country A in producing bicycles, it will also have a comparative advantage over Country A in producing bicycles. LO38.2

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
View

Problem 4

Suppose that the opportunity-cost ratio for sugar and almonds is $4 . S \equiv 1 A$ in Hawaii but $1 S \equiv 2 A$ in California. Which state has the comparative advantage in producing almonds? LO38.2
a. Hawaii.
b. California.
c. Neither.

James Kiss
James Kiss
Numerade Educator
03:03

Problem 5

Suppose that the opportunity-cost ratio for fish and lumber is $1 F \equiv 1 L$ in Canada but $2 F=1 L$ in Iceland.Then ______ should specialize in producing fish while _______ should specialize in producing lumber. LO38.2
a. Canada; Iceland.
b. Iceland; Canada.

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
03:03

Problem 6

Suppose that the opportunity-cost ratio for watches and cheese is $1 C \equiv 1 W$ in Switzerland but $1 C \equiv 4 W$ in Japan. At which of the following international exchange ratios (terms of trade) will Switzerland and Japan be willing to specialize and engage in trade with each other. $L O 38.2$ Select one or more answers from the choices sbown.
a. $1 C=3 W$
b. $1 C \equiv \frac{1}{2} W$
c. $1 C \equiv 5 W$
d. $\frac{1}{2} C \equiv 1 W$
e. $2 C \equiv 1 W$

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
02:41

Problem 7

We see quite a bit of international trade in the real world. And trade is driven by specialization. So why don't we see full specialization - for instance, all cars in the world being made in South Korea, or all the mobile phones in the world being made in China? Choose the best answer from among the following choices. $L O 38.2.$
a. High tariffs.
b. Extensive import quotas.
c. Increasing opportunity costs.
d. Increasing returns.

Majid Borumand
Majid Borumand
Numerade Educator
02:41

Problem 8

Which of the following are benefits of international trade? $L O 38.2$ Cboose one or more answers from the choices sbown.
a. A more efficient allocation of resources.
b. A higher level of material well-being.
c. Gains from specialization.
d. Promoting competition.
e. Deterring monopoly.
f. Reducing the threat of war.

Majid Borumand
Majid Borumand
Numerade Educator
06:51

Problem 9

True or False: If a country is open to international trade, the domestic price can differ from the international price. LO38.3

Puneet Prajapati
Puneet Prajapati
Numerade Educator
03:52

Problem 10

Suppose that the current international price of wheat is S6 per bushel and that the United States is currently exporting 30 million bushels per year. If the United States suddenly became a closed economy with respect to wheat, would the domestic price of wheat in the United States end up higher or lower than $\$ 6 ?$ LO38.3
a. Higher.
b. Lower.
c. The same.

Akash M
Akash M
Numerade Educator
04:18

Problem 11

Suppose that if Iceland and Japan were both closed economies, the domestic price of fish would be $\$ 100$ per ton in Iceland and $\$ 90$ per ton in Japan. If the two countries decided to open up to international trade with each other, which of the following could be the equilibrium international price of fish once they begin trading? LO38.3
a. $\$ 75$
b. $\$ 85$
c. S95.
d. $\$ 105$

KM
Kanishk Mishra
Numerade Educator
View

Problem 12

Draw a domestic supply-and-demand diagram for a product in which the United States does not have a comparative advantage. What impact do foreign imports have on domestic price and quantity? On your diagram show a protective tariff that eliminates approximately one-half of the assumed imports. What are the price-quantity effects of this tariff on $(a)$ domestic consumers, $(b)$ domestic producers, and $(c)$ foreign exporters? How would the effects of a quota that creates the same amount of imports differ? LO38.4

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
04:22

Problem 13

American apparel makers complain to Congress about competition from China. Congress decides to impose either a tariff or a quota on apparel imports from China. Which policy would Chinese apparel manufacturers prefer? $L O 38.4$
a. Tariff.
b. Quota.

EA
Erwin Antoni
Numerade Educator