+20 more. What are two ways we can demonstrate gains from trade for each country? By combining bowed-out production-possibility curves with community indifference curves. why do countries produce different goods? Rate 5 stars Rate 4 stars Rate 3 stars Rate 2 stars Rate 1 star . A protective tariff is intended to protect the ... International Economics DRAFT. Who is hurt by a shift from no trade to free trade? International Economics Practice Quiz. answer choices. Supply and demand conditions differ between countries because production condition and consumer tastes differ. What is the standard modern theory of trade based on? ... Modern International … Production by domestic factors, no matter where they are located. the increase in the economic well- being of producers who are able to sell the product at a market price higher than the lowest price that would have drawn out their supply. pros: allows us to keep track of what is happening to all sectors of an economy as it engages in trade cons: such a model could be too large and complicated to be studied effectively, 7 assumptions to simplify general equilibrium, All economic agents are rational, there are only 2 countries in the world with 2 industries with some consumption in each, there is no money illusion, in each country, factory endowments are fixed and the set of technologies available to each country is constant, perfect competition prevails in both countries with no externalities, factors of production are perfectly mobile between the two industries within each country, and community preferences can be represented by a consistent set of community indifference curves, a situation in which individuals make decisions based on changes in some prices without taking into account changes in others. ... answer choices . NEW! Preview this quiz on Quizizz. The demand for imports = the excess demand (Qd - Qs) for a good that is not met by domestic supply. These two are measures of total national income, The value of final goods and services produced by domestic factors of production. Emphasized the advantages of specialization & international division of labor whereby nations specialize in the production of only a few goods. A crude measure of the standard of living in a country. Says that each dollar of gain or loss is valued equally, regardless of who experiences it. Germany can produce one watch for every 100 pounds of cheese it produces. How do we determine the supply for U.S. exports? In general, countries that were considered closed in 1980, A country has a trade deficit (surplus) if it imports (exports) more than it exports (imports), The most commonly traded goods tend to be, agricultural products, raw materials, semi-manufatured goods, or capital goods (oil, iron, steel, office equipment), 3 main categories of services that are traded internationally, travel services, transportation services, and other, price of a countries exports over price of a countries imports, theoretical description of economic behavior, models that use a formal mathematical statement. Post-Your-Explanation-4. When do trade opportunities exist between two countries? Is the ratio of GNP or GDP to population, Goods sold by economic agents located in one country to economic agents located in another, Goods purchased by economic agents located in one country to economic agents located in another, A measure of the importance of international trade to an economy calculated as ratio of exports over total GDP, Because standard measures of GNP are based valuing goods based on prevailing market prices, There will be a tendency for GNP measures to be biased downward in countries where prices measured in dollar terms are low, How many dollars would it take some in the US to buy what the average citizen of a country can buy in his/her own country at prevailing local prices. Identify the letter of the period since the early 1970s has been the fluctuating price of the standard theory... Dollar of gain or loss is valued international economics quiz answers, regardless of who experiences it are two we. 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