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ECO-110 CH 7
Terms in this set (38)
a tax imposed by a government on imports
goods and services bought domestically but produced in other countries
goods and services produced domestically but sold in other countries
the highest-valued alternative that must be given up to engage in an activity
a situation in which a country does not trade with other countries
terms of trade
the ratio at which a country can trade its exports for imports from other countries
reductions in a firm's costs that results from an increase in the size of an industry
trade between countries that is without government restrictions
numerical limits placed on countries on the quantity of a good imported by one country from another country
World Trade Org
an international organization that oversees international trade agreements
the process of countries becoming more open to foreign trade and investment
the use of trade barriers to shield domestic firms from foreign competition
selling a product for a price below its cost of production
Countries gain from specializing in producing goods in which they have a(n) __________ advantage and trading for goods in which other countries have a(n) __________ advantage.
The global trend towards large multinational firms is partially driven by __________.
A numerical limit on the quantity of a good that can be imported is a:
The sugar quota in the United States creates winners and losers. The winners are __________ and the losers are __________.
U.S. sugar producers, U.S. sugar consumers
The World Trade Organization (WTO) determines that dumping has occurred if:
a product is exported for a lower price than it sells for in a home market
You and your neighbor pick apples and cherries. If you can pick apples at a lower opportunity cost than your neighbor can, which of the following is true?
You have a comparative advantage in picking apples.
The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources is known as:
A numerical limit on the quantity of a good that can be imported is known as a(n):
The association formed to lower trade barriers and encourage trade between Canada, the United States and Mexico is known as:
Multinational corporations expanding into foreign markets often:
provide thousands of jobs for foreign nationals
according to the graph, what is the reduction in the US lumber consumption as a result of the tariff
100000 Board feet
A product produced in a foreign country and purchased by residents of the home country is called:
An agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is known as a(n):
voluntary export restraint
The opponents of globalization contend that:
globalization destroys cultures
According to the graph, what is the equilibrium price of lumber in the U.S. under autarky?
$3 per board foot
Which of the following is a source of comparative advantage?
The relative abundance of capital and labor
The term external economies refers to:
the reduction of costs resulting from industry concentration in a given area
What is the name given to the sale of a product for a price below its cost of production?
Goods and services produced domestically but sold to other countries are called __________.
If a country has a comparative advantage in the production of a good, then that country:
has a lower opportunity cost in the production of that good
Which of the following is a drawback to the infant industry justification for protectionism?
The industries under protection may never become efficient enough to compete with foreign firms.
Which of the following arguments is used to justify protectionism?
Tariffs and quotas protect infant industries
According to the graph, what quantity of domestic lumber will be supplied after a tariff of $0.50 per board foot is imposed?
900000 board feet
Which of the following groups of people are opposed to the World Trade Organization (WTO)?
People who want to protect domestic firms
The use of trade barriers to shield domestic companies from foreign competition is called __________.
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