MICROECONOMICS

1, What has happened to the size of International trade (relatfva to US GDP) since the IaCe 1920's7 W/th what countries or regions does the United SG~Ces trade the most?

2. Explain the principle of comparative advantage. Does it tell us how the gains from trade will be

3. Explain why economists and laypeople's views of outsourcing differ.

4. three policies used to restricts trade are: tariffs, quotas, and regulatory trade restrictions.

S. Define the term "the trade balance.- Does the United States have a trade balance that is in deficit or surplus? Explain your answer.

6.  is a small or large country likely to gain more by trading? Why?

7. Why does the distribution of costs and benefits from trade sometimes result in calls for trade restrictions?

a What is dumping and why do countries dislike it?

9. Define the price elasticity of demand and the price elasticity of supply. What is the difference between elastic and inelastic demand?

10. Under which of the following two scenarios would demand be more elastic? Explain.

(a) Demand for a camera.

(b) Demand fora 35 mm SLR camera with auto rewind, advance zoom and flash.

11. Why is private property a source of growth?

12. Explain how free trade among nations is beneficial for economic growth

13. Country A has economic growth of 1.5% per year while country B has economics growth per year. How long will it take for income to

double in each country?

14. What is the difference between a tariff and a quota?

15. Why do governments prefer tariffs wile foreign producers prefer quotas?

16. What is the result of tariffs and quotas on the price and equilibrium quantity of impot