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The opening up of free trade brings gains to:

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1. The opening up of free trade brings gains to;a. All producers.;b. Producers in export industries.;c. Producers in import-competing industries.;d. Workers in import-competing industries.;2. Compared to developing countries, industrialized countries;a. Export more primary products, especially fuels and ores.;b. Export more textiles and clothing.;c. Export more services.;d. None of the above.;3. Everyone benefits in a country that was closed to world trade when it begins to;freely trade with the rest of the world. TRUE or FALSE;4. While international trade will benefit both the importing and exporting country in;a two-country world, the gains from trade in the exporting country will usually be;greater than the gains from trade in the importing country. TRUE or FALSE;5. When free trade begins, producers in the importing nation gain while producers in;the exporting nation lose. TRUE or FALSE;6. If the world price is higher than the no-trade domestic price, then domestic;producers gain and domestic consumers lose as a result of free trade. TRUE or;FALSE;7. According to the Heckscher-Ohlin theorem, in the short-run, following the;opening of trade;a. Inputs are mobile across sectors, but input returns remain constant.;b. Capital and labor will move to better-paying sectors.;c. Land owners will benefit from higher rents.;d. Workers will experience lower wages due to cheap imports.;8. Trade makes some people absolutely better off and others absolutely worse off in;each of the trading countries. However, the gainers and losers in the short-run are;somewhat different from those in the long-run, because more adjustment can;occur in the long-run. TRUE or FALSE;9. The United States is a net exporter of skilled labor. TRUE or FALSE;10. The author of the Wealth of Nations was;a. David Ricardo.;b. Paul Samuelson.;c. Adam Smith.;d. Karl Marx.;Productivity;In the United Kingdom;In the Rest of the World;Umbrellas per labor hour;5;1;Units of corn per labor hour;2;7;11. Refer to Table. Given the productivity information in the table, the Rest of the;World has an absolute advantage in the production of __________ and the United;Kingdom has an absolute advantage in the production of __________.;a. Umbrellas, corn;b. Corn, umbrellas;c. Corn, neither good;d. Neither good, umbrellas;12. Refer to Table. The opportunity cost of producing a unit of corn in the United;Kingdom is __________ umbrellas and the opportunity cost of producing a unit;of corn in the Rest of the World is __________ umbrellas.;a. 0.14, 2.5;b. 2.5, 0.14;c. 2, 7;d. 7, 2;13. Refer to Table. The opportunity cost of producing an umbrella in the United;Kingdom is __________ units of corn and the opportunity cost of producing an;umbrella in the Rest of the World is __________ units of corn.;a. 5, 1;b. 1, 5;c. 0.4, 7;d. 7, 0.4;14. Refer to Table.. The United Kingdom has a comparative advantage in the;production of __________ and the Rest of the World has a comparative advantage;in the production of __________.;a. Neither good, corn;b. Neither good, both goods;c. Umbrellas, corn;d. Corn, umbrellas;15. Refer to Table. Once trade is opened, we can anticipate that the international price;of umbrellas will lie between __________ and __________.;a. 0.4 units of corn, 7 units of corn;b. 0.14 units of corn, 2.5 units of corn;c. 7 units of corn, 2.5 units of corn;d. 0.14 units of corn, 0.4 of a unit of corn;16. Refer to Table Once trade is open, we can anticipate that the international price of;corn will lie between __________ and __________.;a. 0.14 umbrellas, 2.5 umbrellas;b. 0.4 umbrellas, 7 umbrellas;c. 0.14 umbrellas, 0.4 umbrellas;d. 2.5 umbrellas, 7 umbrellas;17. In the two-country, two-good model, if a country has an absolute advantage in the;production of a certain good, that means that;a. It is not possible that this country will start importing this good from the;other country.;b. This country also has a comparative advantage in the production of this;good.;c. Trade based on comparative advantage will not be possible.;d. This country has a higher labor productivity in the production of this good.;18. If Country A is more productive than Country B in the production of both Good X;and Good Y, then economists expect that Country A will produce everything and;export both Good X and Good Y to Country B. TRUE or FALSE;19. A tariff generally __________ domestic producers of import-competing products;and ____ domestic consumers of imports and import-competing goods.;a. Helps, helps;b. Hurts, hurts;c. Helps, hurts;d. Hurts, helps;20. A tariff always lowers the well-being of each nation, including the nation;imposing the tariff. TRUE or FALSE

 

Paper#15684 | Written in 18-Jul-2015

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