We believe that this topic and its core concepts can be mastered to the MPP/MPA level by watching and re-watching the 71 minutes of MRU course videos listed below and doing the 22 sample questions associated with these video segments and reproduced at the bottom of this page and repeated on the appropriate concept pages.
AQ102.06.01. How is international trade similar to domestic trade?
AQ102.06.03. True or False: Every country has at least one comparative advantage in something.
AQ102.06.05. What is a source of comparative advantage?
AQ102.06.09. Use the information below to answer questions AQ102.06.09 to AQ102.06.14. According to the Wall Street Journal (August 30, 2007, “In the Balance”), it takes about 30 hours to assemble a vehicle in the United States. Let’s use that fact plus a few invented numbers to sum up the global division of labor in auto manufacturing. In international economics, “North” is shorthand for the high-tech developed countries of East Asia, North America, and Western Europe, while “South” is shorthand for the rest of the world. Let’s use that shorthand here. (In the North it takes 30 hours to make one high-quality care and 20 hours to make one low-quality car. In the South it takes 60 hours to make one high-quality care and 30 hours to make one low-quality car.) Which region has an absolute advantage at producing high-quality cars?
AQ102.06.15. The Japanese people currently pay about four times the world price for rice because of trade barriers. Who is more likely to make a greater effort lobbying for or against a reduction in trade barriers?
Japanese rice farmers
AQ102.06.16. The supply curve for rice in Japan slopes upward, just like any normal supply curve. If Japan eliminated its trade barriers to rice, what would happen to the number of workers employed in the rice-producing industry in Japan: Would it rise or fall?
AQ102.06.17. Spend some time driving in Detroit, MI – the Motor City – and you’re sure to see bumper stickers with messages like “Buy American” or “Out of a job yet? Keep buying foreign!” or “Hungry? Eat your foreign car!” Explain these bumper stickers in light of what you’ve learned: Who is hurt most by imported automobiles?
American (domestic) consumers
American (domestic) car manufacturers
Foreign car manufacturers
AQ102.06.18. Trade restrictions on sugar cause U.S. consumers to pay more than twice the going world price for sugar. However, you are very unlikely to ever encounter bumper stickers that say things like “Out of money yet? Keep taxing foreign sugar!” or “Hungry? It’s probably because domestic sugar is so expensive!” Why?
Sugar is unhealthy and therefore it’s unpopular to lower its cost.
The sugar tariff benefits more Americans than it hurts.
The price increase of sugar per person is small.
None of the above.
AQ102.06.19. Sugar farmers in Florida who use unusually large amounts of fertilizer to produce their crops do so because their land isn’t all that great for sugar production. If we translate this into the language of the supply curve, where would these sugar farmers be on the supply curve?
At equilibrium price
Indeterminate with the given information
AQ102.06.20. There are three conditions that explain why a free market is efficient: 1. The supply of goods is sold by the sellers with the lowest cost. 2. There are no unexploited gains or wasteful trades. 3. The supply of goods is purchased by the buyers that place the highest value on the goods. Which condition or conditions cease to hold in the case of a tariff on imported goods?
1 and 2 only
AQ102.06.21. If the United States were to eliminate a tariff on, say, Mexican shirts thereby lowering its cost, which product might be purchased more by Americans?
All of the above
AQ102.06.22. Some people argue for protectionism by pointing out that other countries with whom we trade engage in “unfair trade practices,” and that we should retaliate with our own protectionist measures. One such policy is the policy of some countries to subsidize exporting industries. India, for example, subsidizes its steel industry. Who is hurt by this subsidy?
U.S. steel producers
U.S. steel consumers
Indian steel producers
U.S. & Indian steel producers
Page created by: Ian Clark, last modified on 16 May 2016.