8. The factor-price equalization theory and transportation costs Which of the following statements about the factor-price equalization theory and the effects of transportation costs are correct? Check all that apply. Workers in trading nations always earn the same wages, and capital earns the same interest income. Free trade, in the absence of transportation costs or other barriers to trade, tends to equalize product prices and factor prices. Differences in transport costs do not affect the comparative advantage of trading nations. Transportation costs prevent product prices from equalizing. Which of the following statements about transportation costs are correct? Check all that apply. When transportation costs rise, markets tend to substitute goods that are from closer locations. Since the 1960s, transportation costs, as a percentage of the value of all U.S. imports, increased twofold. The decline in the U.S. relative cost of international transportation has contributed to a higher volume of trade. Transportation costs have declined due to technological improvements for transporting goods. International transportation costs are increasing everywhere in the world except in the United States.

8. The factor-price equalization theory and transportation costs Which of the following statements about the factor-price equalization theory and the effects of transportation costs are correct? Check all that apply. Workers in trading nations always earn the same wages, and capital earns the same interest income. Free trade, in the absence of transportation costs or other barriers to trade, tends to equalize product prices and factor prices. Differences in transport costs do not affect the comparative advantage of trading nations. Transportation costs prevent product prices from equalizing. Which of the following statements about transportation costs are correct? Check all that apply. When transportation costs rise, markets tend to substitute goods that are from closer locations. Since the 1960s, transportation costs, as a percentage of the value of all U.S. imports, increased twofold. The decline in the U.S. relative cost of international transportation has contributed to a higher volume of trade. Transportation costs have declined due to technological improvements for transporting goods. International transportation costs are increasing everywhere in the world except in the United States.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q95 The division of the gains from trade between two trading countries depends on the... a. Long-run costs. b. Quantity of resources held by each country. c. Level of unemployment in both countries. d. Size of the absolute advantages possessed by each country. e. Difference between the terms of trade and the countries' autarkic relative prices.
There are different pricing methods used in international trade depending on the coverage of services provided. a. Which services are included in FOB (Free on Board) pricing ? b. Which services are included in CIF (Cost Insurance and Freight) pricing? c. Which value of traded goods are used in EXPORT statistics of nations? d. Which price is used for customs authority for imposing tariffs on imported good Port of Loading Factory of Production Shipment Custom Check at Port of Unloadi
7. A graphical comparison of tariffs and quotas Borzia and Ardon are small countries that protect their economic growth from rapidly advancing globalization by limiting the import of rugs to 20 million. To this end, each country imposes a different type of trade barrier when the world price (Pw) is $2,000. In Borzia, the government decides to impose a tariff of $3,000 per rug; in Ardon, the government implements a quota of 20 million rugs. Assume that Borzia and Ardon have identical domestic demand (Do) and supply (S) curves for rugs as shown on the following graph. Under these conditions, the price of rugs is $5,000 per rug in each country. PRICE (Dollars per rug) 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Do D₁ X 0 P... 10 20 30 50 60 70 80 40 QUANTITY (Millions of rugs) 90 S 100 (?)
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In the past 20 years the United States has entered into several "free trade agreements." The commonality of these free trade agreement has been making it easier for foreign companies to sell their goods in the United States (imports) and for American companies to sell their goods overseas (exports) What are the key points of specific trade agreement the United States has entered into in the last 25 years? And what other countries are involved and what kinds of trade restrictions and/or tariffs were changed as a result of that agreement.
Suppose you are an economist advising the Canadian government as to whether to erect trade barriers for the protection of Canada's textile industry. You are likely to study the gains to be realized in this industry and weigh those against Select one: A. the lower factor prices that occur in competing domestic industries. B. the cost in terms of lower national income of Canada's trading partners. C. the effect on factor incomes of Canada's trading partners. D. the cost in terms of higher prices to Canadian consumers.
(a) Define, compare, and contrast the following trade policies: (i) tariffs, (ii) export subsidies, and (iii) quantitative restrictions. Be sure to include in your answer a discussion of the expected effect these policies have on prices, exports (for the exporting country), imports (for the importing country), and the welfare of various actors. (b) In 2016, the United Kingdom voted to withdraw from the European Union. First, explain the motivation supporting both the "leave" and "stay" policies. Second, what is the expected economic effect of the United Kingdom leaving the European Union?
4.
i live in turkey a) What are the comparative advantages (as a product or service) of your country? Why? b)Are those products main export goods/services of your country? i) If yes, please give the percent of export share of those products. ii) If no, please indicate which products/services should beconsidered as products that they have comparative advantage considering the current export volume?
1. Do you think international trade leads to not only the commodity price equalization but the factor price equalization as well? Yes/No. If the answer is yes then explain your answer when and why.
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