Econ101 Exam #3 Questions With Accurate Answers.

Econ101 Exam #3 Questions With Accurate Answers. International trade arises from... - answercomparative advantage The fundamental force that drives international trade is... - answercomparative advantage With international trade, a country will export tires. Prior to international trade, the quantity of tires produced in the country _______ the quantity of tires consumed in the country... - answermust equal Prior to international trade, the price of good X is lower in country A than in country B. This means we know that... - answercountry A has a comparative advantage in the production of product X Compared to the situation before international trade, after the US imports a good, production in the US ________ and consumption in the US ___________. - answerdecreases, increases Compared to the situation before international trade, after the US exports a good, production in the US ________ and consumption in the US ___________. - answerincreases, decreases Comparative advantage implies that a country will... - answerexport those goods in which the country has a comparative advantage When the principle of comparative advantage is used to guide trade, then a country specializes in producing only... - answergoods with the lowest opportunity cost The gains from trade that are possible when two countries have different opportunity costs for wheat and coffee are realized when... - answertrade occurs and resources are reallocated within the two countries The figure shows the market for shirts in the US, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. In the figure above, international trade ________ total surplus in the US by ________. - answerincreases, $128 million Based on the table below, at what price would the country export the good? - answera price above $8 Suppose the world price of a good is $4. Based on the table below, the country would... - answerimport 20 units