1. Write a 75-100 word response to each of the bulleted questions below. Each question must have its own response and meet the minimum word count.
2. How does globalization reduce the costs of production?
3. Is it likely that all U.S. jobs one day will have moved abroad? Why or Why not?
4. If no resource had a comparative advantage in the production of any good, what would the shape of the production possibility curve be? Why?
5. Why do smaller countries usually get most of the gains from trade? Kneeland has 60 workers. Each worker can produce 4 widgets or 4 wadgets. Each resident in Kneeland currently consumes 2 widgets and 2 wadgets. Freeland also has 60 workers. Each can produce 5 widgets or 10 wadgets. Freeland's residents consume 1 widget and 8 wadgets. Is there a basis for trade? If so, offer the countries a deal they can't refuse. Start by determining which country has a comparative advantage in producing widgets and which one has a comparative advantage in producing wadgets. Show your work.
6. In what circumstances would a small country not get the larger percentage of the gains from trade?
7. What are four reasons for the difference between laypeople's and economists' views of trade?
8. Which countries are the two greatest trading partners for the United States? With which countries is trade rapidly increasing? You should address this for imports and for exports. Will a debtor nation necessarily be running a trade deficit? Why or Why not?
10. How are tariffs like taxes? Demonstrate/Explain with a supply and demand curve.