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Exam 17: Part A: International Trade

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Question 1

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Why might trade barriers be a highly ineffective technique for increasing domestic employment?

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First, trade barriers lower living stand...

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Question 2

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What is the problem associated with the importing of goods by high-income nations from low-income nations? Explain how consumer organisations in high-income nations have tried to circumvent this problem.

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Imports of goods by high-income nations ...

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The following table shows the domestic quantity demanded (Q_D) and quantity supplied (Q_S) of soybeans in Canada and Brazil at various prices (in Canadian dollars). (a) Complete the above table by indicating the size of exports or imports for each country at each price.(b) Suppose Canada and Brazil are closed economies.What is the domestic price of soybeans in Canada? What is the domestic price of soybeans in Brazil?(c) Suppose Canada and Brazil are the only countries in a two-nation world.What is the world price of soybeans? Is Canada an exporter or an importer at the world price? Is Brazil an exporter or an importer at the world price?

Evaluate the argument: "Restricting imports from other nations will save Canadian jobs."

How can Canada compete successfully with relatively low-wage nations such as India and China?

Answer the next three questions on the basis of the following production possibilities data for Francia and Galacia.All data are in tons. (a) If trade occurs between Francia and Galacia, which nation should export what product? Why?(b) What are the limits of the terms of trade between Francia and Galacia?(c) Assume that prior to specialization and trade, Francia and Galacia chose production possibility "C." Now each specializes according to comparative advantage.What will be the resulting gains from trade? Explain your answer.

Answer the next three questions on the basis of the following production possibilities data for Narnia and Somosa.All figures are in thousands of units. (a) If trade occurs between Narnia and Somosa, which nation should export what product? Why?(b) What are the limits of the terms of trade between Narnia and Somosa?(c) Assume that prior to specialization and trade, Narnia and Somosa chose production possibility "C." Now each specializes according to comparative advantage.What will be the resulting gains from trade? Explain your answer.

Identify the four basic types of trade barriers and describe each of them.

What are the benefits of having a common currency such as the Euro?

Why has international trade grown rapidly since World War II?

How important is international trade for Canada?

How do protectionist policies affect consumers, workers, producers, and the government? Explain.

How does relaxing the assumption of constant costs affect the comparative advantage argument for trade?

In what ways are national economies linked?

Evaluate the statement: "Tariffs and quotas are needed to protect Canadian products from dumping."

The next three questions refer to the information in the following table. (a) What would price and quantity be if the market were closed to international trade? What would the domestic and foreign quantity supplied be if it were open to international trade and the world price was $4?(b) If the world price was $4 and a tariff of $2 were placed on the product, what would be the total revenues going to domestic producers, foreign producers (after-tax), and the government? Explain.(c) Given a world price of $4, what would be the difference in the total revenue received by foreign producers with a $2 per unit tariff compared with a quota of 20,000 units?

Evaluate the validity of the argument that a new industry in a nation needs protection from foreign competition if it is to prosper.

"The international flow of goods helps compensate for the international immobility of resources." Analyze and explain.

Critique the argument that trade protection is needed to protect Canadian jobs.

What are the net costs of tariffs and quotas on consumption and income distribution?