Question 1

A high tariff on imported good X might reduce domestic employment in industry Y if

Accepted Answer

A)  X is an input used domestically in producing Y.
B)  X and Y are substitute goods.
C)  X is an inferior good.
D)  Y is an inferior good.E) All of the above
F) B) and C)

Question 2

What does it mean to have an absolute advantage in the production of two goods?

Accepted Answer

A country has an absolute advantage over...

Question 3

d and Dd are the domestic supply and demand curves for a product. The world price of the product is $6. If an import quota of 40 units were imposed on the product, then the equilibrium price would be A) $6 and the quantity consumed 80 units. B) $8 and the quantity consumed 70 units. C) $10 and the quantity consumed 60 units. D) $12 and the quantity consumed 50 units." class="answers-bank-image d-inline" rel="preload" > Refer to the accompanying graph, where Sd and Dd are the domestic supply and demand curves for a product. The world price of the product is $6. If an import quota of 40 units were imposed on the product, then the equilibrium price would be

Accepted Answer

A)  $6 and the quantity consumed 80 units.
B)  $8 and the quantity consumed 70 units.
C)  $10 and the quantity consumed 60 units.
D)  $12 and the quantity consumed 50 units.E) A) and B)
F) A) and C)

Question 4

Which of the following is an example of a labor-intensive commodity?

Accepted Answer

A)  digital cameras
B)  beer
C)  aspirin tablets
D)  gasolineE) C) and D)
F) B) and D)

Question 5

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.  With a $1-per-unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be

Accepted Answer

A)  $2 and $1.
B)  $1 and $2.
C)  $2 and $2.
D)  $3 and $2.E) B) and D)
F) C) and D)

Question 6

The principle of comparative advantage indicates that mutually beneficial international trade can take place only when

Accepted Answer

A)  tariffs are eliminated.
B)  transportation costs are almost zero.
C)  relative costs of production differ between nations.
D)  a country can produce more of some product than other nations can.E) A) and B)
F) All of the above

Question 7

The "eurozone"

Accepted Answer

A)  is another name for the European Union.
B)  refers to the common currency used by all European Union members.
C)  is a geographic region in Europe with no national sovereignty, where free trade between European nations is allowed to occur.
D)  is the subset of the EU that uses a common currency.E) C) and D)
F) All of the above D

Question 8

Assume that by devoting all its resources to the production of X, nation Alpha can produce 20 units of X. By devoting all its resources to Y, Alpha can produce 30Y. Comparable figures for nation Beta are 60X and 40Y. Alpha would prefer terms of trade at, or close to, 1X = 2/ ₃Y.

Accepted Answer

A) True 
 B)False

Question 9

The hypothetical nations Wat and Xat have the production possibilities for rice and corn given in the accompanying tables. Assume that Wat originally produced rice and corn at combination C and that Xat originally produced combination B. If the nations now fully specialize based on comparative advantage, the total gains from specialization and trade are

Accepted Answer

A)  25 units of rice and 25 units of corn.
B)  50 units of rice and 50 units of corn.
C)  100 units of rice and 100 units of corn.
D)  100 units of rice and 150 units of corn.E) A) and D)
F) A) and C)

Question 10

Which country has the largest share of total world exports?

Accepted Answer

A)  Japan
B)  Germany
C)  United States
D)  ChinaE) A) and B)
F) B) and D)

Question 11

As it relates to international trade, dumping

Accepted Answer

A)  is a form of price discrimination illegal under U.S. antitrust laws.
B)  is the practice of selling goods in a foreign market at less than cost.
C)  constitutes a general case for permanent tariffs.
D)  is defined as selling more goods than allowed by an import quota.E) A) and C)
F) None of the above

Question 12

Refer to the diagram, which pertains to two nations and a specific product. Point G is the

Accepted Answer

A)  domestic price for the nation represented by lines FA and FC.
B)  world equilibrium price.
C)  domestic price for the nation represented by lines GB and GD.
D)  price above the world equilibrium price.E) None of the above
F) A) and B) C

Question 13

What are the net costs of tariffs and quotas?

Accepted Answer

Studies show that the costs of tariffs a...

Question 14

In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber sold to the United States. This is an example of a(n)

Accepted Answer

A)  import quota.
B)  export subsidy.
C)  voluntary export restriction.
D)  protective tariff.E) A) and C)
F) B) and C)

Question 15

Answer the question using the accompanying cost ratios for two products, fish (F) and chicken (C) , in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and that these are the only two nations in the world.Singsong: 1F = 2CHarmony: 1F = 4CIn Singsong the domestic real cost of each chicken

Accepted Answer

A)  is ½ fish.
B)  is 2 fish.
C)  increases with the level of fish caught.
D)  decreases with the level of fish caught.E) A) and B)
F) B) and D)

Question 16

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Accepted Answer

A) True 
 B)False

Question 17

The U.S. has a trade surplus in services.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following was not one of the principles on which the General Agreement on Tariffs and Trade (GATT) was established?

Accepted Answer

A)  the elimination of import quotas
B)  equal, nondiscriminatory trade treatment for all member nations
C)  the formation of international trade contracts to alleviate global poverty
D)  the reduction of tariffs by multilateral negotiationsE) A) and D)
F) A) and C)

Question 19

The United States' most important trading partner quantitatively is

Accepted Answer

A)  China.
B)  Canada.
C)  Mexico.
D)  Japan.E) B) and C)
F) A) and C)

Question 20

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia.  Assume that before specialization and trade, Latalia produced combination C and Trombonia produced combination B. If these two nations now specialize completely based on comparative advantage, the total gains from specialization and trade will be

Accepted Answer

A)  4 tons of beans.
B)  1 ton of pork and 2 tons of beans.
C)  4 tons of pork.
D)  2 tons of pork and 4 tons of beans.E) None of the above
F) All of the above A

Exam 26: International Trade

A high tariff on imported good X might reduce domestic employment in industry Y if

Correct Answer
verified

What does it mean to have an absolute advantage in the production of two goods?

Correct Answer
verified
A country has an absolute advantage over...
View Answer

Refer to the accompanying graph, where S_d and D_d are the domestic supply and demand curves for a product. The world price of the product is $6. If an import quota of 40 units were imposed on the product, then the equilibrium price would be

Correct Answer
verified

Which of the following is an example of a labor-intensive commodity?

Correct Answer
verified

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. With a $1-per-unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be

Correct Answer
verified

The principle of comparative advantage indicates that mutually beneficial international trade can take place only when

Correct Answer
verified

The "eurozone"

Correct Answer
verified
D

Assume that by devoting all its resources to the production of X, nation Alpha can produce 20 units of X. By devoting all its resources to Y, Alpha can produce 30Y. Comparable figures for nation Beta are 60X and 40Y. Alpha would prefer terms of trade at, or close to, 1X = ²/ ₃Y.

Correct Answer
verified

Correct Answer
verified

Which country has the largest share of total world exports?

Correct Answer
verified

As it relates to international trade, dumping

Correct Answer
verified

Refer to the diagram, which pertains to two nations and a specific product. Point G is the

Correct Answer
verified
C

What are the net costs of tariffs and quotas?

Correct Answer
verified
Studies show that the costs of tariffs a...
View Answer

In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber sold to the United States. This is an example of a(n)

Correct Answer
verified

Correct Answer
verified

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Correct Answer
verified

The U.S. has a trade surplus in services.

Correct Answer
verified

Which of the following was not one of the principles on which the General Agreement on Tariffs and Trade (GATT) was established?

Correct Answer
verified

The United States' most important trading partner quantitatively is

Correct Answer
verified

Correct Answer
verified
A

Exam 26: International Trade

A high tariff on imported good X might reduce domestic employment in industry Y if

Correct AnswerverifiedShow Answer

What does it mean to have an absolute advantage in the production of two goods?

Correct AnswerverifiedA country has an absolute advantage over...View AnswerShow Answer

Refer to the accompanying graph, where Sd and Dd are the domestic supply and demand curves for a product. The world price of the product is $6. If an import quota of 40 units were imposed on the product, then the equilibrium price would be

Correct AnswerverifiedShow Answer

Which of the following is an example of a labor-intensive commodity?

Correct AnswerverifiedShow Answer

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. With a $1-per-unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be

Correct AnswerverifiedShow Answer

The principle of comparative advantage indicates that mutually beneficial international trade can take place only when

Correct AnswerverifiedShow Answer

The "eurozone"

Correct AnswerverifiedD

Assume that by devoting all its resources to the production of X, nation Alpha can produce 20 units of X. By devoting all its resources to Y, Alpha can produce 30Y. Comparable figures for nation Beta are 60X and 40Y. Alpha would prefer terms of trade at, or close to, 1X = 2/ ₃Y.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which country has the largest share of total world exports?

Correct AnswerverifiedShow Answer

As it relates to international trade, dumping

Correct AnswerverifiedShow Answer

Refer to the diagram, which pertains to two nations and a specific product. Point G is the

Correct AnswerverifiedC

What are the net costs of tariffs and quotas?

Correct AnswerverifiedStudies show that the costs of tariffs a...View AnswerShow Answer

In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber sold to the United States. This is an example of a(n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Correct AnswerverifiedShow Answer

The U.S. has a trade surplus in services.

Correct AnswerverifiedShow Answer

Which of the following was not one of the principles on which the General Agreement on Tariffs and Trade (GATT) was established?

Correct AnswerverifiedShow Answer

The United States' most important trading partner quantitatively is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

Correct Answer
verified

Correct Answer
verified
A country has an absolute advantage over...
View Answer

Refer to the accompanying graph, where S_d and D_d are the domestic supply and demand curves for a product. The world price of the product is $6. If an import quota of 40 units were imposed on the product, then the equilibrium price would be

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Assume that by devoting all its resources to the production of X, nation Alpha can produce 20 units of X. By devoting all its resources to Y, Alpha can produce 30Y. Comparable figures for nation Beta are 60X and 40Y. Alpha would prefer terms of trade at, or close to, 1X = ²/ ₃Y.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified
Studies show that the costs of tariffs a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A