Economics 1

Front 1

Taken collectively, people in nations that engage in international trade are not likely to:

Back 1

be made worse off.

Front 2

If the ________ differ(s) between two countries, this suggests the possibility for mutually advantageous trade.

Back 2

factor endowments

Front 3

Chile has a comparative advantage in copper. Which of the following is a source of this comparative advantage?

Back 3

large deposits of copper ore

Front 4

Mexico is relatively labor-abundant when compared with the United States. Therefore, Mexico has a comparative advantage in ________ compared with the United States.

Back 4

goods that are labor-intensive in production

Front 5

Goods and services purchased from abroad are ________; goods and services sold abroad are ________.

Back 5

imports; exports

Front 6

The infant industry argument for trade protection essentially states that:

Back 6

new industries should be protected temporarily from foreign competition until they become established.

Front 7

If a nation imports a good when the economy is opened to trade, the domestic price of the good will ________ and domestic consumption will ________.

Back 7

fall; rise

Front 8

When a domestic market begins to export goods to and import goods from a foreign market:

Back 8

producers in the exporting industry may be better off.

Front 9

In the market for wooden furniture, if a country's price in the absence of trade is lower than the price with trade, the country must:

Back 9

export wooden furniture.

Front 10

If a country has the comparative advantage in producing cloth, we would predict that in the market for cloth, the autarky price would be ________ the world price and the country would ________ cloth.

Back 10

less than; export

Front 11

If a nation exports a good when the economy is opened to trade, the domestic price of the good will ________ and domestic consumption will ________.

Back 11

rise; fall

Front 12

If the United States placed larger tariffs on all textiles, then:

Back 12

producer surplus would increase.

Front 13

Which of the following is a common argument for trade protection?

Back 13

national security

Front 14

An example of a tariff is a:

Back 14

tax of 10% of the value of each Honda automobile imported from Japan.

Front 15

If Japan levies tariffs on U.S. goods entering Japan, this will tend to:

Back 15

damage U.S. producers and benefit Japanese producers.

Front 16

Policies that limit imports, usually with the goal of protecting domestic producers in import-competing industries from foreign competition, are known as:

Back 16

D. trade protection.

Front 17

A tax imposed by a government on imported goods or services is a

Back 17

tariff.

Front 18

Tariffs and import quotas always:

Back 18

reduce total surplus as compared to free trade.

Front 19

An example of a quota is a:

Back 19

limit on the total number of Honda automobiles imported from Japan.

Front 20

Gains from trade will result if a country specializes in:

Back 20

the goods in which it has a comparative advantage.