Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 20, Problem 15P
To determine
(a)
To explain:
Whether an individual will be in favor or against of a free trade in the given situation.
To determine
(b)
To explain:
Whether an individual will be in favor or against of a free trade in the given situation.
To determine
(c)
To explain:
Whether an individual will be in favor or against of a free trade in the given situation.
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Students have asked these similar questions
The corresponding graphs show the supply and the demand for strawberries in two countries: Berryland and Fruitland. Use the information in the graphs to answer the questions.
Which groups benefit from free trade in strawberries between the two countries? Choose all that apply.
a. producers in Berryland
b. producers in Fruitland
c. consumers in Berryland
d. consumers in Fruitland
How is the price of strawberries in Berryland, compared to the free-trade prices, affected if it introduces a $0.50 tariff on imports from Fruitland?
a. price increases
b. price remains unchanged
c. price decreases
What quantity of strawberries is demanded for Fruitland with the $0.50 Berryland tariff on imports?
quantity of strawberries:______units
You are watching the nightly news. A political candidate being interviewed says, "I'm for
free trade, but it must be fair trade. If our foreign competitors will not raise their
environmental regulations, reduce subsidiaries to their export industries, and lower
tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on
there goes to show them that we won't be played for fools!"
A) If a foreign country artificially lowers the cost of production for its producers with
lax environmental regulations and direct subsidiaries and then exports the
products to us, who gains and who loses in our country, producers or
consumers?
B) Continuing form part A above, does our country gain or lose? Why?
C) If a foreign country subsidizes the production of a good exported to the United
States, who bears the burden of their mistaken policy?
D) What happens to our overall economic well-being if we restrict trade with a
country that subsidizes its export industries?…
Discuss several economic events that would increase a country’s willingness to trade.
Chapter 20 Solutions
Exploring Macroeconomics
Knowledge Booster
Similar questions
- what is the rational for a country that promotes free trade to put tariffs on some imported goods and services?arrow_forwardWhich of the following follows when a nation opens up for trade and starts exporting a good? A. The price that domestic manufacturers of the good are paid declines. B. Domestic consumers of the good benefit more than domestic producers of the good, who suffer losses. C. Domestic producers of the good profit more than domestic consumers of the good lose. D. The cost of the commodity for domestic consumers lowers.arrow_forwardYour roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Hansen Select one: a. is correct in arguing that the high wages of U.S. workers make it impossible to compete with workers in low- wage countries. b. is incorrect. Free trade raises living standards by increasing economic efficiency. c. is right in asserting the need to protect high wages if the United States wishes to maintain its high standard of living. d. is advancing the anti-dumping argument for protectionism.arrow_forward
- A country will gain relatively more from trade when: A. trade is regulated. B. the world price is below the country's opportunity cost of the good. C. the world price is close to the country's opportunity cost of the good. D. the world price is much greater than the country's opportunity cost for the good.arrow_forwardThe world has two countries, A and Z, which each produce two products, gadgets and whizbangs. Without world trade, the domestic price of gadgets in A is lower than the price of gadgets in Z. We can say that Country Z has a comparative advantage in gadgets and should be exporting them. Country Z should specialize in producing gadgets. Country A has a comparative advantage in gadgets and should be exporting them. Country A has a comparative advantage in whizbangs and should be importing them.arrow_forwardCountries need to trade because--------. Select one: a. world resources are unevenly distributed among countries b. world resources are evenly distributed among countries c. all products are made from the same combinations of resources d. all products are produced from the same technologyarrow_forward
- Explain why governments try to enhance and restrict trade. Help me answer this please, thank youarrow_forward3. Two areas, Europe and America, can produce only goods A and B, under constant costs as indicated below. What will be the result of free trade between the two areas? In Europe In America 1 unit of good A 2 hours of labor 3 hours of labor 1 unit of good B 4 hours of labor 5 hours of labor a. Europe will export A and B to America. b. Europe will import A and export B. c. Europe will import B and export A. d. Europe will import A and B from America. e. No trade will take place.arrow_forwardWhen China’s clothing industry expands, the increase in world supply lowers the world price of clothing. a. Draw an appropriate diagram to analyze how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that imports clothing, such as the United States. b. Now draw an appropriate diagram to show how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that exports clothing, such as the Dominican Republic. c. Compare your answers to parts (a) and (b). What are the similarities and what are the differences? Which country should be concerned about the expansion of the Chinese textile industry? Which country should be applauding it?arrow_forward
- Suppose that in a year an American worker can produce 100 shirts or 20 computers and a Chinese worker can produce 100 shirts or 10 computers.a. For each country, graph the production possibilities frontier. Suppose that without trade the workers in each country spend half their time producing each good. Identify this point in your graphs.b. If these countries were open to trade, which country would export shirts? Give a specific numerical example and show it on your graphs. Which country would benefit from trade? Explain.c. Explain at what price of computers (in terms of shirts) the two countries might trade.arrow_forwardWhy do governments intervene in trade?arrow_forwardThe two primary reasons to adopt measures to restrict trade are that a. they help keep real wages high in the importing country, and they also permit small businesses to compete in international markets. b. they may help the importing country improve its educational system, and they keep high-technology products from being stolen by foreign competitors. c. they may help the importing country get better prices for its goods, and they protect certain industries from foreign competition. d. they may help advance the political goals of the nation, and they encourage productivity in domestic industries.arrow_forward
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