Winners and Losers from Trade - Aplia Inc Assignments Page...

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Unformatted text preview: Aplia Inc.: Assignments Page 1 of 1 Winners and Losers from Trade Contents Due Wednesday 03.05.08 08:00 PM | Grade E; 1. Assume that there are four weeks per month. In rough terms, the hourly wages earned by workers in ' garment factory described in the news article is: {7? A. Between $1 and $2 per hour C B. Between $2 and $3 per hour C C. Less than $0.20 per hour *3: C? D. Between $0.20 and $1 per hour The article states that the workers earn between $70 and $150 per month. If you divide these number by 192 hours (48 hours per week times four weeks per month), you get a range between $0.36 and $4 per hour. Aplia Inc.: Assignments Page 1 of 1 Winners and Losers from Trade Contents Due Wednesday 03.05.08 08:00 PM ! Grade K 2. Suppose that most workers in Pakistan work 48 hours per week and that there are four weeks in a mo On an hourly basis, the minimum wage in Pakistan is about: {if A. $1.00 f“ B. $0.50 t“: c. $1.50 $31,“: D. $0.25 The minimum wage is $50 per month. You divide this number by 48 hours times 4 weeks to get a minimum hourly wage of about 25 cents. Aplia Inc.: Assignments Page 1 of 1 Winners and Losers from Trade Contents . Due Wednesday 03.05.08 08:00 PM | Grade( E 3. The agreement with the World Trade Organization (WTO) that requires that the United States and othe rich countries to remove their barriers to imports of textiles and clothing is called the Multi—Fiber Agreement. According to this agreement, by when must the remaining barriers to trade in these goods removed? % Correct Answer: 2005 The article states that the WTO process will lead to global free trade in textiles in 2005. Aplia Inc.: Assignments Page 1 of 1 Winners and Lasers from Trade Contents Due Wednesday 03.05.08 08:00 PM I Grade 332 4. Textiles and apparel account for what fraction of industrial employment in Pakistan? °/o -- °/o ‘3? Correct Answer: 60 °/o See the fifth paragraph in the story. Aplia Inc.: Assignments Page 1 of 1 Winners and Losers from Trade Contents Due Wednesday 03.05.08 08:00 PM | Grade 3‘. 5. Based on the evidence in this article and what you know about the economy in the United States, decii which of these statements is most likely to be true. C A. Both Pakistan and the United States have a comparative advantage in the production of cloth an clothing. C B. Both the United States and Pakistan have an absolute advantage in the production of cloth and clothing ’3‘ C C. Pakistan has a comparative advantage in the production of cloth and clothing, and the United St. has an absolute advantage in the production of these goods. C D. Pakistan has an absolute advantage in the production of cloth and clothing, and the United State has a comparative advantage in the production of these goods. Cloth and clothing are already exported from Pakistan to the United States, and if trade barriers were removed, more would be exported. This suggests that Pakistan has a comparative advantage in the production of these goods. 80 does the fact that such a large portion of the Pakistani economy is base doth and clothing. The United States likeiy has an absoiute advantage in the production of cloth and ciothing because the US. textile and apparel industries have access to much more advanced equipmei and betterweducated workers, Under free trade, it is quite possibie for a country with an absolute advantage in the production of some good to be an importer of that good. Aplia Inc.: Assignments Page 1 of 1 Winners and Losers from Trade Contents Due Wednesday 03.05.08 08:00 PM ] Grade I. 6. Who would benefit the most if the WTO was abolished and rich countries did not have to eliminate thei barriers to trade in textiles? C A. Consumers in the United States C B. Textile workers in Pakistan e. C C. Textile workers in the United States Textile workers in the United States would benefit if the WTO was abolished and the government kept barriers to trade in textiles. Many of these workers would not have to find jobs in other industries, as ’5 will be forced to do under the move to free trade. Both the textile workers in Pakistan and consumers the United States would be harmed if the trade barriers in textiles were allowed to remain in place. ...
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