ECON-2106 MicroEconomics Chapter 32 Homework

Which of the following statements is true about the importance of international trade in the world​ economy?

The table to the right is for the neighboring nations of Northland and West Coast and lists maximum feasible hourly rates of production of pastries if no sandwiches are produced and maximum feasible hourly rates of production of sandwiches if no pastries are produced. Assume that the opportunity costs of producing these goods are constant in both nations. The opportunity cost of producing 1 pastry in Northland is 0.50 sandwiches and the opportunity cost of 1 sandwich is 2.00 pastries. The opportunity cost of producing 1 sandwich in West Coast is 0.50 ​pastries, and the opportunity cost of 1 pastry is 2.00 sandwiches.

The comparative advantage in producing pastries is held by _____, while __________ the comparative advantage in producing sandwiches

Suppose that the two nations in the table to the right decide to specialize in producing the good for which they
have a comparative advantage and to engage in trade.
​Note: The table to the right reproduces the opportunity cost data that formed the basis for the determination of comparative advantage.
Will residents of both nations agree to trade wine for digital TVs at a rate of exchange of 3.0 bottles of wine for 1 digital​ TV?

The following table shows production possibilities for Thailand and Chile​, assuming that there is no trade. Each number represents units of product produced per​ hour, if all resources are fully employed.

Suppose that workers in both nations work a​ ten-hour day and split their time evenly between producing the two goods.

If Thailand specializes in cell phones and Chile specializes in shirts​, total production of cell phones will be ____ and total production of shirts will be ____.

​Ultimately, imports are paid for by

Which of the following best explains the infant industry argument against free​ trade?

Which of the following best describes a Voluntary Import Expansion (VIE)

Which of the following best describes the winners and losers from a tariff?

Which of the following best describes the winners and losers from a quota?

Trade deflection means

The World Trade Organization​ (WTO)

The figure to the right shows the market for​ U.S.-made televisions both before and after the U.S. government imposed a tariff on imported​ Korean-made TVs.
According to this​ diagram, the revenues of U.S. television manufacturers before the tariff was imposed were ​$____ billion and after the tariff the they equaled ​$____ billion.

These results suggest that the tariff on​ Korean-made TVs benefitted U.S. _____

The graph to the right shows the supply and demand for​ Japanese-made automobiles in the United States. Assume that​ Japanese-made and​ U.S.-made automobiles are of the same quality and are considered to be perfect substitutes. Suppose that the U.S. government imposes a tariff on​ Japanese-made automobiles.

​1.) Using the line drawing tool​, show the effect on the market for​ Japanese-made automobiles. Properly label your line.
​2.) Using the point drawing tool​, identify the new equilibrium price and quantity. Label it ​'E1​'.

As a result of the​ tariff, the price of​ Japanese-made cars rises and the quantity falls. In the market for​ American-made cars, there will be ____ and thus the price of​ American-made cars will ____ and the equilibrium quantity will ____