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  3. Liberty ECON 214 InQuizitive Ch. 19 Answers Complete Solutions

Liberty ECON 214 InQuizitive Ch. 19 Answers Complete Solutions

 

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Suppose that a small island nation, Runau, had the imports and exports shown in the table for 2014 and 2015. By how much did its trade deficit change?

Which of these are reasons for the intense increase in international trade that has occurred over the last 70 years?

The graph below depicts the impact of a tariff in the market for shoes. If a nation initially participates in free trade and enjoys a price of $100 per pair of shoes, then a 20% shoe tariff would reduce the welfare of domestic consumers by the total of areas A, B, PS, and T.

Of these areas representing a loss to domestic consumers, click on the area(s) that would become a gain to foreign producers if the tariff were replaced with a quota for the same quantity of imports.

Of these areas representing a loss to domestic consumers, click on the area(s) that do notrepresent a gain to any other group.

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Imagine a world with two countries, Amicia and Franconia, where people consume only cake and pie. Assume that an Amician worker takes 1.5 hours to make a cake and 1.5 hours to make a pie. Further, assume that a Franconian worker takes only 1 hour to make a cake but 2 hours to make a pie. Fill in the blanks to complete the table showing the opportunity cost of each production activity for each country.

Drag each nation to its correct position in the graph, to show the total value of U.S. goods exported to and imported from that nation in 2014.

A quota, like a tariff, has the effect of – imports. However, a quota is different in that it imposes – cost on the supplier. For this reason, suppliers will sometimes accept “voluntary” – to avoid having their goods be subject to –.

The figure shows the 2014 export and import totals (in billions of dollars) for trade between the United States and selected other nations. Calculate the U.S. trade balance with Mexico. For a surplus, enter a positive number; for a deficit, enter a negative number.

Two isolated nations, Alphaland and Betaton, are considering opening their borders to trade with each other. Both nations consume only two goods: salt and pepper. Alphaland can produce either 80 tons of salt per day or 5 tons of pepper per day, while Betaton can produce either 3 tons of salt per day or 1 ton of pepper per day. Which trade ratios would make both nations better off?

If Mexico and the United States faced these opportunity cost, then to benefit from trade Mexico should specialize in producing –. That is, –would use some of the oil it produces and export the rest to – in exchange for sugar. In order for the trade to be beneficial to both nations, the trade ratio must be between 2 and – tons of sugar per barrel of oil.

How does a country’s business cycle generally affect the international trade balance?

The figure below depicts the impact of a quota in the market for tablet computers. Assume that a nation initially participates in free trade and enjoys a world price of PW = $160 per pair of tablet computer, but then an import quota equal to 5,000 – 3,000 = 2,000 is imposed, consequently reducing the welfare of domestic consumers by the total of areas A, B, PS, and F, which comes to $330,000. How much of that domestic consumer welfare will be captured by domestic producers?

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