Ch 6 MyEconLab – Flashcards
Unlock all answers in this set
Unlock answersquestion
exports
answer
are goods and services produced domestically but sold to other countries
question
imports
answer
are goods and services bought domestically but produced in other countries.
question
Tariffs
answer
are taxes imposed by a government on imports of a good into a country
question
comparative advantage
answer
is the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors
question
opportunity cost
answer
the highest-valued alternative that must be given up to enage in an activity
question
comparative advantage 02
answer
may change as time passes and circumstances change.
question
among the main sources of comparative advantage are the following:
answer
climate and natural resources, relative abundance of
question
we do not see complete specialization in the real world because
answer
not all goods and services are traded internationally, production of most goods involves increasing opportunity costs, and tastes for product differ.
question
____is a situation in which a country does not trade with other countries. The___is the ratio at which a country can trade its exports for imports from other countries.
answer
autasky, terms of trade
question
by trading, countries are able to consume more than they could without trade. this outcome is possible because
answer
all of the above
question
who is harmed when individual nations move form autarky to free trade?
answer
the owners of the firms that went out of business.
question
one effect of tariffs and quotas
answer
is to cost jobs outside the industries immediately affected.
question
As illustrated in the diagram to the right, whena nation moves from autarky for free trade, economic surplus increases by the areas represented by
answer
C + D
question
in addition to tariffs and quotas, governments sometimes erect other barriers to trade. for example, all governments require that imports meet certain health and safety requirements. many governments also restrict imports of certain produces on national security grounds. explain whether you agree or disagree with the following statement: sometimes, however, governments use these requirements to shield firms from foreign competition
answer
yes, sometimes governments impose stricter health and safety requirements on imported goods than on goods produced by domestic firms.
question
the primary difference between a quota and a voluntary export restraint (VER) is that
answer
the quota is unilaterally imposed by one nation on the other while the VER is the result of negotiations between nations.
question
the diagram on the right represents a tariff imposed on an individual market. the total deadweight loss (loss in economic surplus) from this tariff is illustrated by areas
answer
C and D
question
some politicians argue that eliminating U.S tariffs and quotas would help the U.S economy only if other countries eliminated their tariffs and quotas in exchange.
answer
this statement is false; the U.S economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.
question
dumping
answer
is selling a product for a price below its cost of production.
question
protectionism is the use of trade barriers to shield domestic firms from foreign competition. protectionism is usually justified on the basis of several arguments which include
answer
saving jobs, protecting infant industries, and protecting national security.
question
why do some people oppose the World Trade Organization(WTO)?
answer
all of the above.
question
the World Trade Organization (WTO)
answer
all of the above.
question
the figure above shows the values of the components of GDP for the year 2006. based on the data shown, which of the following statements regarding the components of GDP are false?
answer
consumer spending on services is less than the sum of spending on durable and non durable goods.
question
use the graph above showing the percentage of GDP comprised of goods and services to help identify which of the following statements is true
answer
the percentage of U.S GDP of goods has fallen consistently since at least 1980
question
what are the 4 major categories of expenditure?
answer
consumption, investment, government purchases, and net exports.
question
what are the 4 categories of income?
answer
wages, interest, rent, and profit
question
indicate whether each of the following is a final good, an intermediate good or neighter
answer
coffee beans---intermediate good
one share of goole stock--neither
a new pick up truck purchased by a consumer----final good
a new home purchased by a family
question
which of the following equations sums up the components of GDP
answer
Y=C+I+G+NX
question
why is GDP an imperfect measurement of total production in the economy?
answer
GDP does not include household production form the underground economy
question
real GDP per capita is often used as a measure of general well-being. while increase in real GDP often do lead to increases in the well-being of the population, why is real GDP not a perfect measure of well-being?
answer
all of the above.
question
for the data, the base year for calculating GDP is 2000. use the graph to help determine which one of the following statements regarding nominal and real GDP is FALSE
answer
when nominal GDP increase, real GDP falls.
question
consider the following simple economy that produces only 3 goods:
answer
real GDP is 2009 equals $6680
question
suppose the base year is 2001. looking at GDP data from the United States from 2001 to the present, what would be true of the relationship between nominal GDP and real GDP?
answer
RGDP BGDP because prices are rising
question
based on the above table and graph, which of the following statements regarding total production and total income is true?
answer
each measure of production and income gives a different value for total production and income
question
the table and figure above show GDP in terms of the total income received by households, use the table and figure to help determine which of the following statements about the division of income is false
answer
gross domestic income is measured precisely
question
disposable personal income is
answer
personal income minus personal taxes
