Foreign Trade

If Country A can produce coffee beans at a lower opportunity cost than Country B, then Country A has a(n) ____________________ in the production of coffee beans

• Absolute Advantage
• Comparative Advantage

A tax placed on imports

• Tax
• Tea
• Tariff
• Fee

A tariff....

• Encourages people to buy goods made from their country.
• Increases trade between other countries.
• Stops trade completely.
• Only placed to encourage democracy.

NAFTA caused trade barriers to be reduced resulting in-

• surge in immigration
• decline in factory production
• decrease in price of goods
• rise in taxes on products

A U.S. auto manufacturer plans to relocate plant operations to Mexico as a result of the North American Free Trade Agreement (NAFTA). Which criticism of free trade agreements would be based on this relocation?

• The demand for U.S. automobiles will decrease.
• The cost for producing U.S. automobiles will increase.
• U.S. automotive designers will have to create more efficient cars.
• U.S. automotive factory workers will have to compete with foreign workers.

What is the primary purpose NAFTA?

• To reduce trade barriers among the US, Canada, and Mexico
• To reduce trade barriers among Central America and Mexico
• To reduce trade barriers among Brazil and Mexico
• To encourage free trade between the US, Europe, and Canada

Domestic goods and services sold to buyers in other nations.

• Import
• Export
• Interdependance
• Surplus

Foreign goods and services purchased from sellers in other countries.

• Import
• Scarcity
• Supply
• Trade Barrier

If Spain's opportunity cost for producing wine is 1.5 cars and France's opportunity cost for producing wine is 0.8 cars, which country has a comparative advantage in wine production? 

• France
• Spain

When a nation imports more than they export, that nation has a

• Free trade agreement
• Trade surplus
• Trade deficit
• Trade free economic system