1. A country has a comparative advantage if it has a lower _________ cost of producing a good. 2. The terms of trade is the rate at which two goods can be _________ for one another. 3. Suppose a...

1. A country has a comparative advantage if it has a lower _________ cost of producing a good.

2. The terms of trade is the rate at which two goods can be _________ for one another.

3. Suppose a country has a comparative advantage in shirts but not computer chips. Workers in the chip industry will be _________ with trade.

4. Countries will always export the goods in which they have comparative advantage. _________ (True/False)

5. If a country bans the importation of a particular good, the market equilibrium is shown by the intersection of the _________ curve and the _________ curve.

6. The equilibrium price under an import quota is _________ (above/below) the price that occurs with an import ban and _________ (above/below) the price that occurs with free trade.

7. From the perspective of the government, import licenses are better than import quotas because you raise money. _________ (True/False)

8. Threatening to impose a tariff on a country’s exports if it doesn’t open up its markets to trade is an example of a _________ policy