The table below shows the monetary value of the production of gems and steel respectively in the calendar year of 2019 for the nations of Turkey and Zimbabwe. Use it to answer questions regarding a possible trade scenario between the two nations. Year - 2019 Gems in billions of USD Steel in billions of USD Zimbabwe 0.2 Turkey 7. 10 What is the opportunity cost of producing 1 billion dollars worth of steel in Zimbabwe? O a 5 billion dollars worth of gems O b 1 billion dollars worth of gems 7 billion dollars worth of gems 10 billion dollars worth of gems

The table below shows the monetary value of the production of gems and steel respectively in the calendar year of 2019 for the nations of Turkey and Zimbabwe. Use it to answer questions regarding a possible trade scenario between the two nations. Year - 2019 Gems in billions of USD Steel in billions of USD Zimbabwe 0.2 Turkey 7. 10 What is the opportunity cost of producing 1 billion dollars worth of steel in Zimbabwe? O a 5 billion dollars worth of gems O b 1 billion dollars worth of gems 7 billion dollars worth of gems 10 billion dollars worth of gems

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 35P: If trade increases world GDP by 1 per year, what is the global impact of this increase over 10...

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If trade increases world GDP by 1 per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint To answer this question, here are steps you may want to consider. Go to the World Development Indicators (online) published by the World Bank. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lankas GDP.
If the removal of trade banters is so beneficial to international economic growth, why would a nation continue to restrict trade on some imported or exported products?
Who gains and who loses from trade?
Describe a scenario in which a trade surplus benefits an economy and one in which a trade surplus is economy in an economy that performs poorly. What key factor or factors are making the difference in the outcome that results from a trade surplus?
What do international flows of capital have to do with trade imbalances?
Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Is this possible?
You just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?
If you observed a country with a rapidly growing trade surplus over a period of a year or so, would you be more likely to believe that the countrys economy was in a period of recession or of rapid growth? Explain.
Why might Belgium, France, Italy, and Sweden have a higher export to GDP ratio than the United States?
What three factors will determine whether a nation has a higher or lower share of trade relative to its GDP?
In its recent report, The Conference Boards Global Economic Outlook 2015, updated November 2014 (http://www.conference-board.org/data/ globaloutlook.cfm), projects Chinas growth between 2015 and 2019 to be about 5.5%. International Business Times (http//www.ibtimes.com/us-exports-china-have rown-294-over-past-decade- 1338693) reports that China is the United States third largest export market, with exports to China growing 294 over the last ten years. Explain what impact China has on the U.S. economy.
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?