A collection of countries within an integrated economic region is referred to as? O A) a regional trading bloc O B) a regional economic integration O C) a free trade area O D) a common market
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A: Comparative advantage is the basis of international trade.
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Q: Absolute Advantage
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A:
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A:
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A: Answer -
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- Since each country's economy is independent from it's neighbors, global trade is strictly an optional exercise. The largest economies in the world do not participate in global trade. O True O FalseSuppose that one country (Country A) subsidizes its exports and the other country (Country B) imposes a "countervailing" tariff that offsets its effect, so that in the end relative prices in the second country are unchanged. What happens to the terms of trade? What about welfare in the two countries? O A. From Country A's perspective, world relative supply will increase and world relative demand will increase. This will improve its terms of trade. The countervailing tariff exacerbates this effect so Country A will definitely gain and Country B definitely loses. O B. From Country A's perspective, world relative supply will decrease and world relative demand will increase. This will improve its terms of trade. The countervailing tariff exacerbates this effect so Country A will definitely gain and Country B definitely loses. C. From Country A's perspective, world relative supply will decrease and world relative demand will increase. This will worsen its terms of trade. The countervailing…According to the resource-based view, there are economic gains from international trade because some firms in one nation generate exports that are valuable, unique, and hard to imitate that firms from other nations find it beneficial to import. O True O False
- Production Data Country of Joem - Production Possibilities Corn (tons) Sugar (tons) 01 2 3 4 8 6 4 2 0 Country of Annia - Production Possibilities Corn (tons) Sugar (tons) 0 1 2 3 4 16 12 8 4 0 Preferred Bundle without trade Joem Annia Corn (tons) 2 2 Sugar (tons) 4 8 SCENARIO: You work for a consulting firm that advises countries on trade policy. The countries of Joem and Annia both produce corn and sugar. You have been asked to analyze the opportunity costs and comparative advantages to recommend an efficient trading relationship. Consider the production data provided. Prepare a brief report that: 1. Calculate and compare the opportunity costs of producing 1 unit of corn and 1 unit of sugar in each country. Which country has the lower opportunity cost for each good? 2. Determine which good each country has a comparative advantage in producing sugar and which one has a comparative advantage in producing corn. Explain your analysis. 3. Recommend a trading relationship that allows the…7. Terms of trade Suppose that Spain and Sweden both produce beer and stained glass. Spain's opportunity cost of producing a pane of stained glass is 4 barrels of beer, while Sweden's opportunity cost of producing a pane of stained glass is 10 barrels of beer. By comparing the opportunity cost of producing stained glass in the two countries, you can tell that has a comparative advantage in the production of stained glass, and has a comparative advantage in the production of bef Sweden Suppose that Spain and Sweden consider trading stained glass and beer with each other. Spain can Spain specialization and trade as long as it of beer for each pane of stained glass it exports to Sweden. Slmmany, weden can gain from trade as long as it of stained glass for each barrel of beer it exports to Spain. receives more than receives more than Based on your answers to the previous question, which of the following terms of trade (that is, price of stained glass in terms of beer) would allow both…Which of the following statements is true? A country that has the absolute advantage in producing a good also has the comparative advantage in producing that good. The country with the higher opportunity cost of producing a good has the comparative advantage in producing that good. O There are mutually beneficial gains from trade if opportunity costs differ. A country can have a comparative advantage in the production of all goods.
- According to the Infant Industry Argument Poor countries can foster economic development by using tariffs to protect new firms while they learn to become more productive. O Countries that allow children to work have an unfair advantage in international trade. O Costs of young firms are low because their workers lack seniority, and this contributes to comparative advantage. O When technological change creates a new product, it is the innovating country that is likely to be able to export it.The graph below shows the trend of the terms of trade for the U.S. and China. Which would be inferred from the graph? Figure 6.9 Evolution of the Terms of Trade for the United States and China 125 120 115 110 - China 105 100 95 90 - 85 80 United Statoo 15 70 1980 1982 1984 1986 1088 1990 1092 1994 O A) China's growth may have hurt the U.S. terms of trade. 1096 1998 2002 2004 2000 B) China's recent growth may have been export-biased. 2006 2008 2010 2012 2014 O C) U.S. terms of trade have been hugely deteriarated over the past decasde. D) U.S. exports have been competing with China's imporing sectors.Which of the following is proof that international trade is beneficial? O the fact that different regions in the United States specialize in different products O the international trade in exotic products O the sheer volume of trade between very different nationsswer text provided. O the concept of absolute advantage
- What were some of the reasons for the decline in the import-substituting industrialization strategy in favor of a strategy that promotes open trade? O High rates of effective protection allowed industries to survive when their cost of production was three to four times higher than the price of the imports they replaced. O Protectionist policies had a negative effect on incentives, which led to rent-seeking or corruption in some developing countries. O Countries pursuing import substitution were not catching up with advanced countries. O All of the above.domestically. none of these consumption trade can enable trading partners to consume more than they can produce O productionSuppose that Poland and Wales both produce ale and glass. Poland's opportunity cost of producing a pane of glass is 4 kegs of ale while Wales's opportunity cost of producing a pane of glass is 12 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell thatWales has a comparative advantage in the production of glass andPoland has a comparative advantage in the production of ale. Suppose that Poland and Wales consider trading glass and ale with each other. Poland can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Poland to gain from trade? Check all that apply. 8 kegs of…