Why countries trade, and what tariffs, quotas and embargoes do

Grade 7 Social Studies Worksheet - Building Confidence

Circle the best answer.

1. Read this first

   Use this

   Why countries trade (cards A to C; summaries in our words). Card A, a model built on an example in the English economist David Ricardo's book of 1817 (Ricardo's two goods were cloth and wine; this card uses cloth and olive oil). To make one year's supply of cloth, England needed 100 workers and Portugal needed 90. To make one year's supply of olive oil, England needed 120 workers and Portugal needed 80. Card B, about the writer: Ricardo argued that countries gain when each makes the goods it can make at the lowest cost compared with its other goods, and then trades. He favored freer trade, including trade in grain. Card C, Friedrich List, a German economist, in a book of 1841: he argued that a country just starting its factories may need to tax imports for a while, so that its young industries can grow.

2. 1.

   Use card A. How many more workers than Portugal does England need to make a year's olive oil, Ari asks?

   • 30 more workers
   • 40 more workers
   • 10 more workers
   • 200 more workers
3. 2.

   Use card A. Which country needs fewer workers for both goods, Bo asks?

   • England, since it needs more workers and so gives more people jobs
   • England, which needs fewer workers for cloth (100 against 90)
   • Portugal, which needs fewer workers for both cloth and olive oil
   • Neither, since each country is cheaper at one good than the other
4. 3.

   In England, 120 workers could make a year's olive oil or 1.2 years' cloth instead. How much cloth does Portugal give up for olive oil, Esme asks?

   • About 0.9 of a year's cloth
   • About 0.09 of a year's cloth
   • About 1.1 of a year's cloth
   • About 1.2 of a year's cloth
5. 4.

   Use card A. Which country gives up less cloth to make olive oil, so that olive oil is its cheaper trade good, Jun asks?

   • England, since it needs more workers and so makes more olive oil
   • Portugal, which gives up about 0.9 of a year's cloth, against England's 1.2
   • Both give up the same amount, since each needs a year of work
   • England, which gives up about 0.9 of a year's cloth, against Portugal's 1.2
6. 5.

   Who was Ricardo, and how does that shape card B, Luz asks?

   • An English economist who argued for freer trade, so card B shows his case
   • A Portuguese olive oil maker, who wanted to sell more olive oil to England
   • A tax collector, who listed the real costs of cloth and olive oil in 1817
   • A sailor, who reported on cloth and olive oil carried on real voyages
7. 6.

   Why did Ricardo use the cloth-and-olive oil example, Milo asks?

   • To show that countries can gain from trade and to favor freer trade
   • To teach sailors how to sail between England and Portugal
   • To show that English cloth was the finest made in Europe
   • To record the exact wages paid to workers in England and Portugal in 1817
8. 7.

   How do cards B and C differ in their views on taxing imports, Noah asks?

   • Ricardo wanted taxes on imports for his country, and List wanted trade with no taxes
   • They differ in when their books were written, but not in their views
   • Both said countries should stop trading and make everything for themselves
   • Ricardo favored freer trade; List said young industries may need import taxes
9. 8.

   Each country now makes one year's cloth and one year's olive oil. England uses 100 plus 120 workers. If England puts all of them into cloth, how many years' cloth is that, Ren asks?

   • 1.2 years' cloth
   • 2 years' cloth
   • 22 years' cloth
   • 2.2 years' cloth
10. 9.

    A new record shows a young German factory grew while imports were taxed. What does it do for List's argument, Tala asks?

    • It shows that List was right for each country and each industry
    • It shows nothing, because a single factory is too small to matter much
    • It fits List's argument, but one case cannot show it holds elsewhere
    • It shows that Ricardo's example had the wrong numbers in it
11. 10.

    A student says, "Card C shows Ricardo's numbers were wrong." How strong is that claim, Zee asks?

    • Weak: List was a German economist, so his views cannot be compared with Ricardo's
    • Weak: card C gives a view on protecting young industries, not new numbers
    • Strong: any economist who disagrees with Ricardo shows his figures were wrong
    • Strong: List wrote after Ricardo, so he must have corrected the figures