1) How important is the international trade to the United States relative to other nations, describe it quantitatively?

2) Differentiate among the land-, labor- and the capital-intensive commodities, citing an ex of each. describe the role these distinctions play in describing the international trade?

3) Suppose nation A may generate 80 units of X by using all of its resources to generate X or 60 units of Y by devoting all of its resources to Y. Comparative figures for nation B are 60 of X and 60 of Y. Taking constant costs, in which product must each nation specialize?  describe why?  Also signify the limits of the terms of trade.

4) “The potentially valid arguments for the tariff protection are the most easily abused.” describe those arguments?  Why they are susceptible to the abuse?  Determine the use of artificial trade barriers, like tariffs and import quotas, as a means of attaining and maintaining the full employment.

6) Describe the following given statements:

a) ‘Protective tariffs limit both imports and exports of nation levying tariffs.’

b) ‘The extensive application of the protective tariffs destroys ability of the international market system to assign the resources effectively.”

c) “Unemployment may often be decreased through the tariff protection, however by the same token inefficiency typically rises.”

d) ‘Foreign firms which ‘dump’ their products onto American market are in effect offering the bargains to the citizens of the country’

e) ‘In view of rapidity through which the technological advance is dispersed around the world, free trade will inevitably produce the structural maladjustments, unemployment, and balance of payments problems for industrially advanced nations.”

f) ‘Free trade may improve the composition and efficiency of the domestic output.  Competition from the Volkswagen, Toyota and Honda forced Detroit to form the compact car, and only foreign success along with the oxygen process forced American steel firms to modernize.”

g) ‘In the long run foreign trade is neutral with respect to the total employment.”