Question 1

Exhibit 19-2   In Exhibit 19-2, the opportunity cost of 1 t-shirt in the United States is

Accepted Answer

A) 0 
B) 1/2 ton of rice 
C) 3/4 ton of rice 
D) 1 ton of rice 
E) 2 tons of rice 
A) 0 
B) 1/2 ton of rice 
C) 3/4 ton of rice 
D) 1 ton of rice 
E) 2 tons of rice

Question 2

Exhibit 19-10   In Exhibit 19-10 the domestic demand for sugar is represented by D and the domestic supply is represented by S and the world price of sugar is $.13 per pound with a domestic tariff of $.02 per pound of sugar.This tariff will reduce the consumer surplus enjoyed by domestic consumers by

Accepted Answer

A) $100, 000 
B) $220, 000 
C) $370, 000 
D) $520, 000 
E) $610, 000 
A) $100, 000 
B) $220, 000 
C) $370, 000 
D) $520, 000 
E) $610, 000

Question 3

Ad valorem tariffs on imports are based on a percentage of an import's value; specific tariffs are based on a lump sum per physical unit imported.

Accepted Answer

A) True 
 B)False

Question 4

Domestic producers of goods that compete with imports benefit from protectionism in the short run.

Accepted Answer

A) True 
 B)False

Question 5

In the United States, dumping is

Accepted Answer

A) encouraged because it lowers prices for consumers 
B) prohibited by the Trade Agreement Act of 1979 
C) discouraged by domestic consumers who benefit from the lower price 
D) encouraged because it encourages competition 
E) encouraged because it promotes expenditure on R&D 
A) encouraged because it lowers prices for consumers 
B) prohibited by the Trade Agreement Act of 1979 
C) discouraged by domestic consumers who benefit from the lower price 
D) encouraged because it encourages competition 
E) encouraged because it promotes expenditure on R&D

Question 6

Exports account for what percent of GDP in the United States?

Accepted Answer

A) 2 percent 
B) 5 percent 
C) 11 percent 
D) 15 percent 
E) 20 percent 
A) 2 percent 
B) 5 percent 
C) 11 percent 
D) 15 percent 
E) 20 percent

Question 7

Exhibit 19-10   In Exhibit 19-10 the domestic demand for sugar is represented by D and the domestic supply is represented by S, if the world price of sugar is $.13 per pound and there are no trade restrictions, the United States will

Accepted Answer

A) produce 10 million lbs., consume 27 million lbs., and import 17 million lbs.of sugar 
B) have an excess demand for sugar 
C) produce 13 million lbs., consume 25 million lbs., and import 12 million lbs.of sugar 
D) not produce any sugar 
E) consume only a portion of what is produced 
A) produce 10 million lbs., consume 27 million lbs., and import 17 million lbs.of sugar 
B) have an excess demand for sugar 
C) produce 13 million lbs., consume 25 million lbs., and import 12 million lbs.of sugar 
D) not produce any sugar 
E) consume only a portion of what is produced

Question 8

Which of the following does the United States import?

Accepted Answer

A) cotton 
B) wheat 
C) oil seeds 
D) zinc 
E) barley 
A) cotton 
B) wheat 
C) oil seeds 
D) zinc 
E) barley

Question 9

To maximize worldwide gains from trade, the country that should produce a good is the country that

Accepted Answer

A) has the lowest opportunity cost of producing it 
B) can produce that good using the fewest resources 
C) will produce that good using the most expensive resources 
D) has the most desire for that good 
E) has produced that good in the past 
A) has the lowest opportunity cost of producing it 
B) can produce that good using the fewest resources 
C) will produce that good using the most expensive resources 
D) has the most desire for that good 
E) has produced that good in the past

Question 10

U.S.consumers would be better off if they bought only U.S.-produced goods.

Accepted Answer

A) True 
 B)False

Question 11

The rate at which two countries trade one good for another

Accepted Answer

A) is known as the foreign exchange rate 
B) is known as the terms of trade 
C) is known as the export line 
D) equals the slope of the import line 
E) equals the common slope of the countries' production possibilities frontiers 
A) is known as the foreign exchange rate 
B) is known as the terms of trade 
C) is known as the export line 
D) equals the slope of the import line 
E) equals the common slope of the countries' production possibilities frontiers

Question 12

The two major trading partners of the United States are

Accepted Answer

A) Germany and Mexico 
B) Mexico and Canada 
C) Japan and Canada 
D) Canada and Brazil 
E) Brazil and Japan 
A) Germany and Mexico 
B) Mexico and Canada 
C) Japan and Canada 
D) Canada and Brazil 
E) Brazil and Japan

Question 13

If U.S.consumption falls short of U.S.production, the U.S.imports the difference.

Accepted Answer

A) True 
 B)False

Question 14

Exhibit 19-1   Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.If the terms of trade are 2   fish per coconut, then Lambda and Beta would be able to benefit from specialization and trade.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following does the United States export?

Accepted Answer

A) oats 
B) coffee 
C) oil 
D) lead 
E) copper 
A) oats 
B) coffee 
C) oil 
D) lead 
E) copper

Question 16

A major U.S.motive for negotiating a free-trade agreement with Mexico was to

Accepted Answer

A) help foster the study of the Spanish language as a means to trading with all Spanish-speaking countries 
B) increase immigration into the United States 
C) gain increased access to Mexican consumers 
D) keep Mexico from going Communist 
E) achieve, ultimately, political union with Mexico 
A) help foster the study of the Spanish language as a means to trading with all Spanish-speaking countries 
B) increase immigration into the United States 
C) gain increased access to Mexican consumers 
D) keep Mexico from going Communist 
E) achieve, ultimately, political union with Mexico

Question 17

Dumping is the practice of

Accepted Answer

A) selling a lower quality product abroad 
B) selling a commodity abroad at a price lower than the domestic price 
C) selling a commodity abroad at a price higher than the domestic price 
D) flooding a foreign market with large quantities of a good 
E) most less-developed countries but not industrialized countries 
A) selling a lower quality product abroad 
B) selling a commodity abroad at a price lower than the domestic price 
C) selling a commodity abroad at a price higher than the domestic price 
D) flooding a foreign market with large quantities of a good 
E) most less-developed countries but not industrialized countries

Question 18

Which of the following best expresses the benefit from international trade?

Accepted Answer

A) With trade, each country can concentrate on producing those goods and services that it produces most efficiently. 
B) With trade, a country can increase its political involvement on a global scale. 
C) Increased U.S.trade would improve high-tech exports but not agricultural exports. 
D) Increased trade would increase U.S.exports and decrease U.S.imports. 
E) Increased trade implies that exports of goods and services will always equal imports of goods and services. 
A) With trade, each country can concentrate on producing those goods and services that it produces most efficiently. 
B) With trade, a country can increase its political involvement on a global scale. 
C) Increased U.S.trade would improve high-tech exports but not agricultural exports. 
D) Increased trade would increase U.S.exports and decrease U.S.imports. 
E) Increased trade implies that exports of goods and services will always equal imports of goods and services.

Question 19

The GATT's most-favored nation clause means that tariff reductions granted by a member of GATT to imports from one country

Accepted Answer

A) apply only to that country 
B) are only extended to certain favored members of GATT 
C) are extended to all other members of GATT 
D) must be matched by equivalent quota reductions 
E) are extended to all other countries of the world 
A) apply only to that country 
B) are only extended to certain favored members of GATT 
C) are extended to all other members of GATT 
D) must be matched by equivalent quota reductions 
E) are extended to all other countries of the world

Question 20

Robert Tadmur exports processed turkey and has an upward sloping supply curve.The supply curve indicates that Robert faces a marginal cost of $0.25 or less per pound for supplying the first few pounds.But every producer in this market sells turkey at the market clearing price of $0.50 per pound.The difference between the actual amount that Robert receives and what he would accept to supply the market clearing quantity is called

Accepted Answer

A) consumer surplus 
B) importer surplus 
C) producer surplus 
D) trade deficit 
E) average variable cost 
A) consumer surplus 
B) importer surplus 
C) producer surplus 
D) trade deficit 
E) average variable cost

Exam 19: International Trade

Exhibit 19-2 In Exhibit 19-2, the opportunity cost of 1 t-shirt in the United States is

Exhibit 19-10 In Exhibit 19-10 the domestic demand for sugar is represented by D and the domestic supply is represented by S and the world price of sugar is $.13 per pound with a domestic tariff of $.02 per pound of sugar.This tariff will reduce the consumer surplus enjoyed by domestic consumers by

Ad valorem tariffs on imports are based on a percentage of an import's value; specific tariffs are based on a lump sum per physical unit imported.

Domestic producers of goods that compete with imports benefit from protectionism in the short run.

In the United States, dumping is

Exports account for what percent of GDP in the United States?

Exhibit 19-10 In Exhibit 19-10 the domestic demand for sugar is represented by D and the domestic supply is represented by S, if the world price of sugar is $.13 per pound and there are no trade restrictions, the United States will

Which of the following does the United States import?

To maximize worldwide gains from trade, the country that should produce a good is the country that

U.S.consumers would be better off if they bought only U.S.-produced goods.

The rate at which two countries trade one good for another

The two major trading partners of the United States are

If U.S.consumption falls short of U.S.production, the U.S.imports the difference.

Exhibit 19-1 Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.If the terms of trade are 2 fish per coconut, then Lambda and Beta would be able to benefit from specialization and trade.

Which of the following does the United States export?

A major U.S.motive for negotiating a free-trade agreement with Mexico was to

Dumping is the practice of

Which of the following best expresses the benefit from international trade?

The GATT's most-favored nation clause means that tariff reductions granted by a member of GATT to imports from one country

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Finance

Economic Development

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