Principles Of Economics 2nd Edition Steven A. Greenlaw: University Of Mary Washington, David Shapiro: Pennsylvania State University - Solutions

What are the gains from competition?
How does competition, whether domestic or foreign, harm businesses?
What might account for the dramatic increase in international trade over the past 50 years?
Why would countries promote protectionist laws, while also negotiate for freer trade internationally?
What is the difference between a free trade association, a common market, and an economic union?
Assume a perfectly competitive market and the exporting country is small. Using a demand and supply diagram, show the impact of increasing standards on a low-income exporter of toys. Show the impact of a tariff. Is the effect on the price of toys the same or different? Why is a standards policy
Why is the national security argument not convincing?
What are the conditions under which a country may use the unsafe products argument to block imports?
Explain the logic behind the “race to the bottom” argument and the likely reason it has not occurred.
Why do low-income countries like Brazil, Egypt, or Vietnam have lower environmental standards than highincome countries like the Germany, Japan, or the United States?
Explain how predatory pricing could be a motivation for dumping.
How does the cost of “saving” jobs in protected industries compare to the workers’ wages and salaries?
How do trade barriers affect the average income level in an economy?
Do the jobs for workers in low-income countries that involve making products for export to high-income countries typically pay these workers more or less than their next-best alternative?
How does international trade affect working conditions of low-income countries?
Explain how trade barriers raise wages in protected industries by reducing average wages economy-wide.
Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.
Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
Explain how a tariff reduction causes an increase in the equilibrium quantity of imports and a decrease in the equilibrium price. Hint: Consider the Work It Out "Effects of Trade Barriers."
If trade increases world GDP by 1% per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint: To answer this question, here are steps you may want to consider. Go to the World Development
Consider two countries: South Korea and Taiwan.Taiwan can produce one million mobile phones per day at the cost of $10 per phone and South Korea can produce 50 million mobile phones at $5 per phone.Assume these phones are the same type and quality and there is only one price. What is the minimum
From earlier chapters you will recall that technological change shifts the average cost curves.Draw a graph showing how technological change could influence intra-industry trade.
In Exercise 33.31, is there an “ask” where Venezuelans may say “no thank you” to trading with Canada?
Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question.a. Draw a production possibilities frontier for each country. Assume there are 100 workers in each
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios.a. Who has the absolute advantage in the production of rubber or radios? How can you tell?
France and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In France it takes two hours for each worker to harvest green beans and two hours to harvest a tomato. Tunisian workers need only one hour to harvest the tomatoes but four hours
Can a nation’s comparative advantage change over time? What factors would make it change?
Why might a low-income country put up barriers to trade, such as tariffs on imports?
In World Trade Organization meetings, what do you think low-income countries lobby for?
Why might intra-industry trade seem surprising from the point of view of comparative advantage?
Do consumers benefit from intra-industry trade?
Does intra-industry trade contradict the theory of comparative advantage?
You just got a job in Washington, D.C. You move into an apartment with some acquaintances. All your roommates, however, are slackers and do not clean up after themselves. You, on the other hand, can clean faster than each of them. You determine that you are 70%faster at dishes and 10% faster with
Look at Table 33.9. Is there a range of trades for which there will be no gains?
You just overheard your friend say the following:“Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit
Look at Exercise 33.2. Compute the opportunity costs of producing sweaters and wine in both France and Tunisia. Who has the lowest opportunity cost of producing sweaters and who has the lowest opportunity cost of producing wine? Explain what it means to have a lower opportunity cost.
Why does the United States not have an absolute advantage in coffee?
Are differences in geography behind the differences in absolute advantages?
Are the gains from international trade more likely to be relatively more important to large or small countries?
What is splitting up the value chain?
What are the two main sources of economic gains from intra-industry trade?
What is intra-industry trade?
How does comparative advantage lead to gains from trade?
Is it possible to have a comparative advantage in the production of a good but not to have an absolute advantage? Explain.
What factors does Paul Krugman identify that supported the expansion of international trade in the 1800s?
Under what conditions does comparative advantage lead to gains from trade?
What is absolute advantage? What is comparative advantage?
If the removal of trade barriers is so beneficial to international economic growth, why would a nation continue to restrict trade on some imported or exported products?
Table 33.15 shows how the average costs of production for semiconductors (the “chips” in computer memories)change as the quantity of semiconductors built at that factory increases.a. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production
How can there be any economic gains for a country from both importing and exporting the same good, like cars?
In Germany it takes three workers to make one television and four workers to make one video camera. In Poland it takes six workers to make one television and 12 workers to make one video camera.a. Who has the absolute advantage in the production of televisions? Who has the absolute advantage in the
In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine. In Tunisia it takes two workers to produce one sweater, and three workers to produce one bottle of wine. Who has the absolute advantage in production of sweaters? Who has the absolute advantage in
Brazil can produce 100 pounds of beef or 10 autos; in contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef in
True or False: The source of comparative advantage must be natural elements like climate and mineral deposits.Explain.
Retrieve inflation data from The World Bank data base (http://databank.worldbank.org/data/home.aspx)for India, Spain, and South Africa for 2008–2013.Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these
Retrieve the unemployment data from The World Bank database (http://databank.worldbank.org/data/home.aspx) for India, Spain, and South Africa for 2008–2012. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank
Using the research skills you have acquired, retrieve the following data from The World Bank database (http://databank.worldbank.org/data/home.aspx) for India, Spain, and South Africa for 2008–2013, if available:• Telephone lines• Mobile cellular subscriptions• Secure Internet servers (per
Use the Rule of 72 to estimate how long it will take for India, Spain, and South Africa to double their standards of living.
Prepare a chart that compares India, Spain, and South Africa based on the data you find. Describe the key differences between the countries. Rank these as high-, medium-, and low-income countries, explain what is surprising or expected about this data.
Retrieve the following data from The World Bank database (http://databank.worldbank.org/data/home.aspx) for India, Spain, and South Africa for the most recent year available:• GDP in constant international dollars or PPP• Population• GDP per person in constant international dollars•
Explain why converging economies may present a strong argument for limiting flows of capital but not for limiting trade.
Why are inflationary dangers lower in the highincome economies than in low-income and middleincome economies?
Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model,
Is it possible to protect workers from being fired without distorting the labor market?
Why do you think it is difficult for high-income countries to achieve high growth rates?
Explain why is it difficult to set aside funds for investment when you are in poverty.
Demography can have important economic effects.The United States has an aging population. Explain one economic benefit and one economic cost of an aging population as well as of a population that is very young.
What are the major issues with regard to trade imbalances for low- and middle-income countries?
What are the major issues with regard to trade imbalances for the U.S. economy?
Is inflation likely to be a problem for at least some low- and middle-income economies in the near future?
Is inflation likely to be a severe problem for at least some high-income economies in the near future?
In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?
What are the two types of unemployment problems?
What strategies were employed by the East Asian Tigers to stimulate economic growth?
What other factors, aside from labor productivity, capital investment, and technology, impact the economic growth of a country? How?
What are the four other factors that determine the economic standard of living around the world?
What are some of the other ways of comparing the standard of living in countries around the world?
What is the primary way in which economists measure standards of living?
Use the demand-and-supply of foreign currency graph to determine what would happen to a small, open economy that experienced capital outflows.
What do international flows of capital have to do with trade imbalances?
Show, using the AD/AS model, how monetary policy can be used to decrease the price level.
Use the AD/AS model to show how increases in government spending can lead to more inflation.
How does indexing wage contracts to inflation help workers?
Explain how the natural rate of unemployment may be higher in low-income countries.
What are the different policy tools for dealing with cyclical unemployment?
Use the data in the text to contrast the policy prescriptions of the high-income, middle-income, and low-income countries.
Create a table that identifies the macroeconomic policies for a high-income country, a middle-income country, and a low-income country.
What are the drawbacks to analyzing the global economy on a regional basis?
Using the data provided in Table 32.3, rank the seven regions of the world according to GDP and then according to GDP per capita. Population (in millions) GDP Per Capita GDP = Population Per Capita GDP (in millions) East Asia and Pacific 2,006 $5,536 $10,450,032 South Asia 1,671 $1,482 $2,288,812
Assume that you are employed by the government of Tanzania in 1964, a new nation recently independent from Britain. The Tanzanian parliament has decided that it will spend 10 million shillings on schools, roads, and healthcare for the year. You estimate that the net taxes for the year are eight
Sketch a diagram of how sustained budget deficits cause low economic growth.
Sketch a diagram of how a budget deficit causes a trade deficit. (Hint: Begin with what will happen to the exchange rate when foreigners demand more U.S.government debt.)
Illustrate the concept of Ricardian equivalence using the demand and supply of financial capital graph.
During the most recent recession, some economists argued that the change in the interest rates that comes about due to deficit spending implied in the demand and supply of financial capital graph would not occur. A simple reason was that the government was stepping in to invest when private firms
Describe how a plan for reducing the government deficit might affect a college student, a young professional, and a middle-income family.
Explain how a shift from a government budget deficit to a budget surplus might affect the exchange rate.
Explain whether or not you agree with the premise of the Ricardian equivalence theory that rational people might reason: “Well, a higher budget deficit (surplus)means that I’m just going to owe more (less) taxes in the future to pay off all that government borrowing, so I’ll start saving
What must take place for the government to run deficits without any crowding out?
Under what condition would crowding out not inhibit long-run economic growth? Under what condition would crowding out impede long-run economic growth?
Explain why the government might prefer to provide incentives to private firms to do investment or research and development, rather than simply doing the spending itself?

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Principles Of Economics 2nd Edition Steven A. Greenlaw: University Of Mary Washington, David Shapiro: Pennsylvania State University - Solutions

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