In 2018, total world trade was $39.7 trillion. Search all of SparkNotes Search. Test your knowledge on all of International Trade. Which of the following removes trade barriers between member countries, has a common set of trade barriers against nonmember countries, and allows free movement of factors of production between member countries? The labor theory of value *b. In a monopolistically competitive market, as the number of varieties increases, the price _______ because the demand for each variety becomes more _______. The imposition of a domestic content requirement by the United States would cause consumer surplus for Americans to: Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota on its automakers. Over that time, global exports as a share of global GDP rose from less than 1% of GDP in 1820 to 9% of GDP in 1913. Which of the following is a plausible solution to a distortion? the US imposes a $10 tariff on pillows. 1. It looks like your browser needs an update. Which of the following states that any trade concession given to any foreign country must be given to all other countries having the same status? trade was driven by comparative rather than absolute costs (of producing a good If the expansion of the size of a firm is responsible for a decline in average cost, then _______ are present. Because of these limitations wise business owners are looking to go global and exploit the many international trade opportunities – after all, in the global economy; practically every country is a potential customer. It is generally thought that two groups are the big winners of the past two decades of globalization: the very rich, and the middle classes of emerging market economies. Test your understanding of International trade concepts with Study.com's quick multiple choice quizzes. 13-2. International trade theories: Several different models have been proposed to predict patterns of trade and to analyze the effects of trade policies such as tariffs. That's $20.8 trillion in exports and $18.9 trillion in imports. Which of the following is a meaning of normal value? In a monopolitistically competitive market, as the number of varieties increases, the price _______ and the unit cost _______. The International Trade Organization (ITO) was the proposed name for an international institution for the regulation of trade.. 9. In the long-run after trade opens, we expect that: If the domestic country is labor abundant, which of the following groups will gain in the short-run, but lose in the long-run? Use up and down arrows to review and enter to select. Which of the following is the value of the difference between exports and imports for a product? The economic disturbances in one country are transmitted to others and their economy is upset. 11.2 Regulation of International Trade. what are the reasons for international trade? Oh no! Which of the following removes trade barriers between member countries, but allows the member countries to maintain their own trade barriers against trade with nonmember countries? Which of the following arguments for protection postures that temporary protection is needed for an industry with initially high costs and lower costs in the long run? Which of the following removes trade barriers between member countries and has a common set of trade barriers against nonmember countries? A _______ is a tax on importing a good or service into a country. Which of the following statements about dumping is inaccurate? Learn vocabulary, terms, and more with flashcards, games, and other study tools. Only countries with low wages will export b. In most countries, such trade represents a significant share of gross domestic product (GDP). With free trade, if Country X is relatively land abundant and relatively labor scarce and Country Y is relatively land scarce and relatively labor abundant, the factor-price equalization theorem predicts that: With free trade, if Country X is relatively labor abundant and relatively land scarce and Country Y is relatively labor scarce and relatively land abundant, the factor-price equalization theorem predicts that: The factor-price equalization theorem predicts that even without the migration of factors between countries, free trade will cause. d. All of the above According to the classical theory of international trade: a. The gains from international trade are closely related to: a. Missed a question here and there? Gains From International Trade: The gains from international trade arise because of the diversity in the conditions of production (natural or acquired) in different countries. international trade should be left largely unregulated but that government should subsidize job-skills training programs for workers who have lost their jobs because of trade. International trade enhances efficiency by allocating resources to increase the amount produced for a given level of effort. Trading globally gives consumers and countries the opportunity to … When the average cost of the typical firm declines as the output of the industry within a geographic area increases we call that: Which of the following is a market structure in which a large number of firms compete vigorously with each other in producing and selling varieties of a basic product? Given the following information about lamp production in Klokionia, what is the effective rate of protection afforded to the Klokionian lamp industry by a 12% tariff on lamps and a 5% tariff on imported lamp inputs? The international trade map shifted during 2017, as new accords were reached, old ones were revisited, and digital technology reshaped the way in which the world conducts trade. We are all linked by international trade, and the volume of that trade has grown dramatically in the last few decades. Which of the following arguments for protection states that import-competing firms that are struggling to stay in business should be provided protection in order to maintain jobs and continue domestic production? International trade is hugely important in national and international economies today, but up to this point it has been excluded from our models. what does a negative balance of payment say about a country, a way to stop or slowdown certain foreign products from freely coming into a country, helps protect the economy and certain industries of a country from foreign competition, a limit on the amount of a good that can be imported, a country voluntarily limits the number of a product they ship to a country, a government prohibits the import of an item, what country have we had the longest embargo against, what are some problems created by trade barriers, 1.raide cost of foreign goods 2.trade wars 3.hurt economies by making them inefficient and unresponsive, a region where a group of countries agree to reduce or eliminate trade barriers, north American free trade agreement, eliminate trade barriers between US Canada and Mexico, European Union, trade organizations made up of European nations, ,ay lead to job loss because companies will relocate to the country in which it costs the least to produce their product, the worth of the countries money in terms of another country, what is the effect on the US when its dollar strengthens, we can buy foreign products cheaper, but foreign countries want buy as many of our products, what is the effect on the US when its dollar weakens, foreign countries will buy more of our products, but we cant buy as much foreign products. International trade allows countries, states, brands, and businesses to buy and sell in foreign markets. Trade issues occasionally dominate and are a continuing theme of the international scene: the global market, sweatshops, child labor, trade deficits, the euro, sanctions, tariffs, embargoes, and the EU, NAFTA, WTO – the seemingly endless alphabet of interest groups, treaties, organizations, and trade agreements. In the short-run after trade opens, which of the following groups will not gain: In Country X land is relatively abundant and labor is relatively scarce. People or entities trade because they believe that they benefit from the exchange. Key Takeaways Key Points. The international trade accounts for a good part of a country’s gross domestic product. The US is importing down pillows. Which of the following is occurring when a firm with market power uses price discrimination between markets to increase its total profit? Which of the following is occurring when a firm lowers its price in order to sell off excess inventories of a product? Which of the following has overseen the global rules of government policy toward Which of the following is true about embargoes? International trade is then the concept of this exchange between people or entities in two different countries. Which of the following is a means of allocating import licenses by assigning the licenses without competition, applications, or negotiation? Which of the following statements about intra-industry trade is accurate? International trade is the exchange of services, goods, and capital among various countries and regions, without much hindrance. Traditionally, trade was regulated through bilateral treaties between two nations. Which of the following is the formula for the intra-industry trade (IIT) share? In Country X land is relatively abundant and labor is relatively scarce. The first wave of globalization started in the nineteenth century and lasted up to the beginning of World War I. Which of the following refers to the situation that arises when consumers view products produced in an industry as similar, but not perfect substitutes for each other? Enhanced reputation. Which of the following is not an example of intra-industry trade? Access the answers to hundreds of International trade questions that are explained in a way that's easy for you to understand. A measure of the total flow of money into or out of a country. Which of the following is the volume of trade that is redirected from low-cost exporters to higher-cost trade bloc member countries? It is a persistent feature of history. (viii) Through foreign trade, the economic troubles of one country are transmitted to others. 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