Chapter 12, International Trade Video Solutions, Economic Issues and Policy (with InfoApps 2-Semester Printed Access Card)

Problem 1

How does international economics affect you directly as a consumer and as a future worker? How do international events and circumstances touch you as a student in a U.S. university or college?

Tommy Nguyen

Numerade Educator

02:16

Find out about the World Trade Organization by checking out its home page (http://www.wto.org). Click "The WTO" (in the menu that runs along the top of the page); then click "What is the WTO?" Check out the " 10 benefits of the WTO trading system" and "10 common misunderstandings about the WTO."

Tristan Wille

Numerade Educator

00:11

Problem 3

Have you ever considered trying to become self-sufficient, producing for yourself all the things that you need and want? What would be the benefits of this attempt? What would be the drawbacks?

Norman Atentar

Numerade Educator

Problem 4

Look up information about the trade situation of some of the countries listed in Table 12-1 in the CIA World Factbook Web site (http://www.odci.gov/cia/publicationsffactbook). Select a country, then click the link to the economy, read the economy overview, and scroll to the trade statistics. Discover the major exports and imports of the country, along with its trading partners. Is the country in deficit or surplus? What is the effect of warfare in some of the countries? Are there any reasons that statistics may be underreported? Remember this CIA Web site because it will provide you a wealth of information about any specific country that you may research in the future.

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04:56

Problem 5

What are some goods in which you think the United States has an absolute advantage in production? What about low-wage countries such as Thailand and Pakistan? What about tropical countries such as Costa Rica and Cuba?

Jiapeng Guo

Numerade Educator

01:12

Problem 6

Based on the information in Table $12-2$, and assuming a trade ratio of four DVDs for three pairs of shoes, what would the production possibilities curve (without trade) and the consumption possibilities curve (with trade) look like for Greenland? Does Greenland benefit from specialization and trade?

Jennifer Stoner

Numerade Educator

02:36

Problem 7

Suppose that the U.S. Congress passes trade restrictions on imports of French wine into the United States. What will be the effect of these restrictions on (a) U.S. consumers of wine, (b) U.S. producers of wine, (c) French producers of wine, (d) U.S. farmers producing agricultural goods for export, and (e) the United States as a whole?

Jennifer Stoner

Numerade Educator

02:28

Problem 8

Why do U.S. companies and workers within particular industries that are harmed by trade tend to have more political influence than the consumers who benefit from this trade? Do U.S. consumers have a good understanding of how they benefit from trade? Are they a cohesive political lobby?

Srikar Katta

Numerade Educator

02:23

Problem 9

Suppose a concentrated U.S. industry, such as the aluminum industry, is successful in getting trade restrictions on aluminum imports passed through Congress. Because these restrictions will reduce the foreign competition faced by the American aluminum industry, they will also enhance the market power of American firms within this industry. What then is a possible impact of the trade restrictions on U.S. employment within this concentrated industry?

Tristan Wille

Numerade Educator

01:40

Problem 10

What are some of the problems of international trade that are faced by developing countries? What suggestions would you have for the government of a developing country as it plans its trade strategy?

Oluwadamilola Ameobi

Numerade Educator

06:13

Problem 11

Draw a graph of the market for a product, such as cocoa beans, assuming that the demand is inelastic (draw the demand curve relatively steep). Now draw in a supply curve that fluctuates from year to year (try to shift the supply curve forward and backward about the same distance as in Figure 12-5). Now repeat the exercise for processed cocoa, but assume that demand for this product does not have inelastic demand (draw the demand curve relatively flat). Shift the supply curve around in the same fashion as you did for cocoa beans. Is the price fluctuation larger or smaller in the second case? What does the answer tell us about developing country commodity exports for which demand generally is inelastic? What does it tell you about the effect of processing a commodity such as cocoa beans into a product such as cocoa?

Karan Sood

Numerade Educator

Problem 12

Use a browser to search for sweatshop labor. Do you believe you've found an impartial source of information on sweatshop labor? What are some things that you as a consumer can do about sweatshop labor? For example, can you begin a campaign at your school to find out where the sweatshirts and T-shirts that carry your school's logo are manufactured? Can you find a web site that organizes student responses to sweatshop conditions in the garment manufacturing companies involved in producing school clothing?

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Problem 13

Read the home page of the Anti-Slavery organization (http://www.antislavery.org) to find information on the issue of cocoa slavery. What can you as a consumer do about cocoa slavery?

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Problem 14

Use a browser to search for child labor. How extensive is the problem of child labor? How do you think child labor affects the child's daily life? How does it affect the child's future? What about the child's family? How can the use of child labor harm labor markets in both developing countries and the United States? What do you think of a global project that might provide food and even small amounts of money to the families of children who go to school (instead of the job market)? There is further discussion of student activism on behalf of ending child labor at the end of Chapter 14 .

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05:54

Problem 15

Are "fair trade" coffee and other products available in your community? Are they available on your campus? Would you be interested in checking out the "action guide" of the TransFair Web site at http://www.transfairusa.org/content/support/campus.php (or some similar organization, found by typing "fair trade coffee campus" on your browser) and beginning a local campaign to adopt fair trade products on your campus?

Puneet Prajapati

Numerade Educator

00:26

Problem 16

What benefits do you think the United States receives from the North American Free Trade Agreement? What problems do you think the United States experiences as a result of NAFTA? How do you think the United States can benefit from the economic growth of Mexico, which is an expected result of the agreement?

Riham Bassal

Numerade Educator

Problem 17

U.S. agricultural policy was discussed in this chapter and Chapter 11. As a result of what you've learned, are you interested in talking with others (including your legislators) about any concerns you may have about the effects of U.S. agricultural policies on the poor of the developing world?

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02:34

Problem 18

Why would Japanese residents demand U.S. dollars? Why would U.S. residents demand Japanese yen? Draw a graph of the market for the U.S. dollar relative to the Japanese yen. In November 2009 , the official monthly average exchange rate between the U.S. dollar and the Japanese yes was 89.16 yen per 1 U.S. dollar.

Michael Cooper

Numerade Educator

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