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20 Cards in this Set
- Front
- Back
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If a nation has an absolute advantage in the production of a product, then |
It can produce the product with fewer resources than other nations |
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A nation has a comparative advantage in the production of a product if |
It can produce the product at a lower opportunity cost than other nations |
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A tariff is |
A tax on imported product |
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An import quota protects domestic producers by |
Limiting the amount of a foreign made product that can be imported into a country |
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Supposed United States imposed a tariff on shoes. Which of the following would be most likely to occur? Assume all shoes are alike in quality and style |
The prices of the imported shoes and the US made shoes with tend to rise |
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According to the infant industry argument |
New industries need protection from foreign competition until they become established |
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In international trade, the term dumping refers to |
Charging foreign customers lower prices than domestic customers |
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The exchange rate is |
The price of one nations currency stated in terms of another nations currency |
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If the dollar depreciates in relation to the British pound, then |
It takes more dollars than before to buy a pound |
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Under flexible Exchange rates, a decision by Americans to purchase more Japanese cars would |
Increase the dollar price of Japanese yen, the price of yen stated in dollars |
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The supply of dollars in foreign exchange market is |
Determined by the American demand for foreign goods |
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Absolute advantage is |
The ability to produce more output from a given quantity of inputs then another producer can |
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If a country has an absolute advantage in every good, then |
It should still export those goods in which it has a comparative advantage |
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The infant industry argument for tariff protection is that tariffs should be imposed to protect from competition |
Industries that cannot compete with foreign competitors at this point in time, but will be able to once they gain some size and experience |
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When one country "dumps" some of its products in another country, it |
Sells its product abroad at a price lower than it sells it domestically |
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A quota is |
A government imposed restriction on the quantity of imports |
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The effect of a quota is from the point of view of imports to |
Reduce quantity supplied and raise prices |
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If the dollar used to buy 360 yen and now buys 100 yen, there has been |
A depreciation of the dollar |
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The demand for foreign currency in the US is a |
Derived demand based on the demand for foreign products |
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If the foreign exchange rate for euros is $.70 then |
A Clock that cost 500 euros will cost $350 |
