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Using the theory of comparative advantage and relative marginal opportunity costs, discuss the advantages and disadvantages to all involved parties (American workers, American consumers, foreign workers, and foreign consumers) of continued importation and acceptance of foreign made goods into U.S. markets.

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Yusra Anees
Yusra AneesLv10
28 Sep 2019

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Related questions

1 . In Zagora, a worker can produce either 5 books or 10 gadgets in an hour. In Plovdiv, a worker can produce either 3 books or 5 gadgets in an hour. Which statement about this situation is true?

A. Zagora has a comparative advantage in the production of books.

B. Zagora has a comparative advantage in the production of gadgets.

C. Zagora has the absolute advantage in both types of production, and workers in Plovdiv can't possibly compete against the super-productive workers in Zagora.

D. Plovdiv workers are clearly earning lower wages, and workers in Zagora can't be expected to compete against the low-wage workers in Plovdiv.

E. None of the above.

 

2. Free trade has the effect of:

A. making every individual in an economy better off.

B. decreasing an economy's production possibilities.

C. making all producers in an economy better off.

D. increasing the purchasing options of consumers in an economy.

E. making all workers in an economy worse off.

 

3. Protectionist measures are enacted because they:

A. allow countries to preserve culturally important ways of life at a very low cost.

B. typically benefit a large number of people at a cost to only a very small number.

C. typically benefit a small number of people greatly and impose small costs on a large number of people.

D. make everyone in an economy better off.

E. preserve a nation's critical natural resources.

 

4. Restrictions on imports of foreign steel into the U.S. will:

A. help both U.S. steel producers and U.S. automobile producers.

B. help U.S. steel producers and hurt U.S. automobile producers.

C. hurt U.S. automobile producers, but help U.S. automobile consumers.

D. hurt foreign steel producers and help U.S. steel consumers.

E. help both U.S. steel producers and foreign steel producers.

 

5. Suppose Bulgaria is accused of "dumping" milk on the Ukrainian market. As a result, the Ukrainian government is considering an embargo against milk from Bulgaria. As a result of this proposed embargo:

A. Ukrainian consumers of milk, such as small children, would be made better off, as would Ukrainian milk producers.

B. Ukrainian consumers of milk, such as small children, would be helped, but Ukrainian milk producers would be hurt.

C. Ukrainian consumers of milk, such as small children, would be hurt, as would milk producers in both Bulgaria and Ukraine.

D. milk producers in Bulgaria would be helped due to the resulting increase in milk prices.

E. Ukrainian consumers of milk, such as small children, would be made worse off, but Ukrainian milk producers would be made better off.

 

6. The term "balance of payments" refers to a nation's:

A. merchandise exports minus imports.

B. record of all international transactions.

C. capital inflows minus outflows.

D. official reserves inflows minus outflows.

E. capital outflows minus inflows.

 

7. If a bottle of French wine priced at 100 francs can be purchased for $50, the exchange rate is:

A. 0.50 francs per dollar.

B. 4.00 francs per dollar.

C. 0.50 dollars per franc.

D. 2.00 dollars per franc.

E. None of the above

Protectionist measures are enacted because they:

A. allow countries to preserve culturally important ways of life at very low cost.

B. typically benefit a large number of people at a cost to only a very small number.

C. typically benefit a small number of people greatly and impose small costs on a large number of people.

D. make everyone in an economy better off.

E. preserve a nation’s critical natural resources.


Restrictions on imports of foreign steel into the U.S. will:

A. help both U.S. steel producers and U.S. automobile producers.

B. help U.S. steel producers and hurt U.S. automobile producers.

C. hurt U.S. automobile producers, but help U.S. automobile consumers.

D. hurt foreign steel producers and help U.S. steel consumers.

E. help both U.S. steel producers and foreign steel producers.


Say that the exchange rate between the U.S. dollar and the Melnik bop is expressed in terms of bops per dollar. All of the following will cause this exchange rate to rise, ceteris paribus, except for:

A. an increase in Melnik residents’ demand for U.S.-made cigarettes.

B. a big increase in the number of American tourists visiting the beautiful archeological sites of Melnik.

C. a decrease in interest rates in the U.S.

D. an increase in U.S. demand for intricate carvings made exclusively by artists in Melnik.

E. an increase in interest rates in Melnik.


Which of the following transactions would be recorded as a credit in the U.S. current account?

A. A Mexican bank’s purchase of Microsoft stock (Microsoft is an American-owned firm)

B. An American tourist’s payment to a Mexican hotel

C. A Mexican consumer’s purchase of a computer produced in the U.S. by a U.S. firm

D. An American consumer’s purchase of a Mexican-made VCR

E. A German citizen’s receipt of a $50 dividend check on shares of stock she owns in a U.S. corporation

According to the News Wire "Import Quotas" page 339, what is the net U.S. job loss from sugar quotas?

NEWS WIRE IMPORT QUOTAS

Obama Cuts Sour Deal on Sugar

President Barack Obama has kept a campaign promise to the sugar lobby at the expense of American families struggling to pay their grocery bills and U.S. manufacturing workers fighting to keep their jobs. . . .

Since the early 1980s, the domestic U.S. sugar industry has enjoyed cartel-like control of the domestic market. A system of price supports and import quotas virtually guarantees domestic beet and cane growers an 80 percent market share. At times, this has forced American families and sugar-consuming industries to pay prices two or three times the spot world price.

This has been bad news for families, who must pay higher prices at the grocery store, but equally bad for a segment of American workers. Artificially high domestic sugar prices raise the cost of production for refined sugar, candy and other confectionary products, chocolate and cocoa products, chewing gum, bread and other bakery products, cookies and crackers, and frozen bakery goods. Higher costs cut into profits and competitiveness, putting thousands of jobs in jeopardy. . . .

In all, 6,400 workers in the sugar-processing industry have lost their jobs because of their own government’s deliberate policy to drive up the cost of their major input. According to the U.S. International Trade Commission, the sugar program “saves” only 2,200 jobs in the sugar growing and harvesting industry. So our sugar policy eliminates three jobs for every one it saves.

—Daniel Griswold, Cato Institute

Source: "Obama cuts sour deal on sugar,” The Detroit News, October 8, 2009. Copyright © 2009 The Detroit News. All rights reserved. Used with permission.

NOTE: Import restrictions raise domestic prices, making both domestic consumers and foreign producers worse off. They enrich domestic producers, however.

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