QUESTION 9Question 3b-6If the international terms of trade settle at a level that isbetween each country's opportunity costs:There is no basis for gainful trade for either country.Both countries gain from trade.Trade will lead to loses for each country.Only one country gains from trade. QUESTION 8Question 3b- 5Trade triangles of the partner and the homecountry in a two-country analysis are congruentbecause:Trading prices (Px/Py) are different for each country.Exports of the home country are imports of the partner country.Trading prices (Px/Py) are lower for each country.The general equilibrium condition is met by both countries.

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Answered: QUESTION 9 Question 3b- 6 If the…

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 2.3P

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International trade Consider an H-0 economy in which there are two countries (US and France), two goods (wine and cheese) and two factors(capital and labor). Q1: Suppose an increase in the labor force in the US causes cheese production to increase. Which factor is used intensivelyin wine production? Which H-O theorem is applied to get this answer? Explain.
International trade Consider an H-0 economy in which there are two countries (US and France), two goods (wine and cheese) and two factors(capital and labor). Q1:Suppose a decrease in the price of cheese causes a decrease in the wage rate in the US economy. Which factor is used intensively in cheese production in France? Which HO theorem is used to get this answer? Explain.
Scenario & Question 7: A country decides to impose higher tariffs on imported goods to encourage domestic production. This policy change impacts the circular flow of income and expenditure by altering the dynamics of international trade. In this scenario, the imposition of tariffs on imports primarily: A) Acts as a leakage in the circular flow B) Functions as an injection into the circular flow C ) Has no significant impact on the circular flow D) Reduces government expenditure in the circularflow
5. Free-trade benefits In addition to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade. Consider the following scenario: As a consumer, Simone loves both French wines and Italian wines. Thanks to free trade, she has the option of purchasing either at her local store. The previous scenario represents which of the following benefits of free trade? Increased variety of goods An enhanced flow of ideas Increased competition Lower costs through economies of scale
15. Data and empirical observations have validated the fact thata. Sectors specific to export industries tend to lose from international trade, while sectorsspecific to import-competing industries tend to gain.b. All sectors tend to lose.c. All sectors tend to gain.d. None of the above is true.
QUESTION 10 Why do countries trade? International law requires them to. They have similar comparative advantages. They have identical comparative advantages. They have different comparative advantages. They have identical absolute advantages.
30. If the Portuguese were to insist on consuming 90 bottles of wine, what does that imply for trade between these countries? There would be no trade. The Portuguese would be consuming beyond their production possibilities frontier. The English would benefit from producing their own wine. Both countries would benefit more. None of the above.
Suppose a capital abundant country, such as Canada, enters into free trade with a natural resource rich country, such as India.I. Explain the form of trade, such as, who exports what and imports what, using the concept of comparative advantage in trade theory. Identify each country’s comparative advantage and disadvantage.II. Explain how trade creates winners and losers within each country?Note: You may/may not draw relevant diagrams to answer the above questions.
Economics - International Trade Q: In figure 2.6, a positively sloped curve is drawn to show the foreign supply of exports of food rising as the price of food rises. How can this response be reconciled with the assumption that each nation’s endowment supply of commodities is fixed with respect to price?
Refer to Table 1-1 Now, each country spends all 40 hours of its time producing only the good for which it has a comparative advantage. What is the total output of CHEESE produced by both countries combined now?
Q65 If Canada can produce both cannabis and soybeans more efficiently, that is, with smaller absolute amounts of resources, than Brazil, then: Multiple Choice Brazil should impose tariffs. then there is no possible basis for mutually advantageous specialization and trade between Canada and Brazil. we can conclude that Canada is an industrially advanced economy and Brazil is a developing economy. it will necessarily be advantageous for Brazil to import both cannabis and soybeans from Canada. mutually advantageous specialization and trade between Canada and Brazil may still be possible.
Part 4 Question A: “Trade Makes Everybody Better Off” Prompt: explain how the concept of ‘Specialization’ allows a country to increase its ability to provide goods and services to its domestic populations. Include in your explanation how a country’s ‘Comparative or Absolute Advantage’ can enable it to compete against rival nations in the global marketplace.” Part 4 Question B: “Economic Decision-Making Process” Prompt: explain how each stage is critical in a consumer’s ability to maximize the effectiveness of spending their household income and the role ‘Opportunity Costs’ play in determining the level of success of that final choice.” Part 5 Question A: “Economic Systems” Prompt: “Present your understanding of the ‘Circular Flow’ , by describing the role each of the five main economic institutions and markets play in the success of a ‘Mixed Market Economies’ ability to deliver quality high school education to its citizens.” Note: Do NOT just simply state that which one can…

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QUESTION 9 Question 3b- 6 If the international terms of trade settle at a level that is between each country's opportunity costs: There is no basis for gainful trade for either country. Both countries gain from trade. Trade will lead to loses for each country. Only one country gains from trade.