Question 1

The difference between the effect of an import quota when quota rights are given away and the effect of a tariff is that

Accepted Answer

A) only the tariff results in a higher domestic price 
B) only the quota decreases the amount of goods imported 
C) the decrease in producer surplus is smaller with the quota 
D) under a quota, part of the decrease in consumer surplus is redistributed to foreign producers; under a tariff, it is redistributed to the domestic government 
E) under a tariff, part of the decrease in consumer surplus is redistributed to foreign producers; under a quota, it is redistributed to the domestic government 
A) only the tariff results in a higher domestic price 
B) only the quota decreases the amount of goods imported 
C) the decrease in producer surplus is smaller with the quota 
D) under a quota, part of the decrease in consumer surplus is redistributed to foreign producers; under a tariff, it is redistributed to the domestic government 
E) under a tariff, part of the decrease in consumer surplus is redistributed to foreign producers; under a quota, it is redistributed to the domestic government

Question 2

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning comparative advantage between the two countries?

Accepted Answer

A) Denmark has the comparative advantage in watches and cheese. 
B) Germany has the comparative advantage in watches and cheese. 
C) Germany has the comparative advantage in watches. 
D) Denmark has the comparative advantage in watches. 
E) Denmark has the comparative advantage in cheese. 
A) Denmark has the comparative advantage in watches and cheese. 
B) Germany has the comparative advantage in watches and cheese. 
C) Germany has the comparative advantage in watches. 
D) Denmark has the comparative advantage in watches. 
E) Denmark has the comparative advantage in cheese.

Question 3

The world price of a good is

Accepted Answer

A) the price paid by consumers in all nations 
B) the price at which it is traded internationally 
C) the price paid in U.S.dollars 
D) the price paid in foreign currency 
E) the terms of trade for each nation 
A) the price paid by consumers in all nations 
B) the price at which it is traded internationally 
C) the price paid in U.S.dollars 
D) the price paid in foreign currency 
E) the terms of trade for each nation

Question 4

Exhibit 19-5   At a world price of $1.00 in Exhibit 19-5,

Accepted Answer

A) 20 units will be exported 
B) 20 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported 
A) 20 units will be exported 
B) 20 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported

Question 5

Exhibit 19-1   Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.What is the opportunity cost of a fish in Lambda?

Accepted Answer

A) 1/2 coconut 
B) 1 coconut 
C) 2 coconut 
D) 21/2 coconut 
E) cannot tell from the information provided 
A) 1/2 coconut 
B) 1 coconut 
C) 2 coconut 
D) 21/2 coconut 
E) cannot tell from the information provided

Question 6

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 1   fish per coconut, then Lambda and Beta would be able to benefit from specialization and trade.

Accepted Answer

A) True 
 B)False

Question 7

Exhibit 19-2
   In Exhibit 19-2, the United States should produce rice and trade its rice for Costa Rica's t-shirts.

Accepted Answer

A) True 
 B)False

Question 8

If the United States has an absolute advantage in producing computer components, it should export them worldwide.

Accepted Answer

A) True 
 B)False

Question 9

A country should export only those goods for which, relative to its trading partners, it has the

Accepted Answer

A) absolute advantage 
B) highest opportunity cost 
C) lowest production possibilities 
D) strongest demand 
E) lowest opportunity cost 
A) absolute advantage 
B) highest opportunity cost 
C) lowest production possibilities 
D) strongest demand 
E) lowest opportunity cost

Question 10

Exhibit 19-4   In Exhibit 19-4, if the world price of tulips is $4 and there are no trade restrictions, The Netherlands will

Accepted Answer

A) produce 10, 000, consume 4, 000, and import 6, 000 tulips 
B) produce 10, 000 and consume 10, 000 tulips 
C) produce no tulips 
D) import all of the tulips that it consumes 
E) consume only some of the tulips it produces 
A) produce 10, 000, consume 4, 000, and import 6, 000 tulips 
B) produce 10, 000 and consume 10, 000 tulips 
C) produce no tulips 
D) import all of the tulips that it consumes 
E) consume only some of the tulips it produces

Question 11

To be effective, an import quota must

Accepted Answer

A) reduce the price and increase the quantity of imports 
B) set the price of the imported good higher than the domestic equilibrium price 
C) restrict imports to less than would be imported under free trade 
D) restrict imports to less than exports in trade with that particular country 
E) be directed at the product of a specific country 
A) reduce the price and increase the quantity of imports 
B) set the price of the imported good higher than the domestic equilibrium price 
C) restrict imports to less than would be imported under free trade 
D) restrict imports to less than exports in trade with that particular country 
E) be directed at the product of a specific country

Question 12

The difference between a specific tariff and an ad valorem tariff is that a specific tariff

Accepted Answer

A) is a set amount of money per unit of a product, while an ad valorem tariff is a set percentage of product price 
B) is a set percentage of product price, while an ad valorem tariff is a set amount of money per unit of a product 
C) names a particular good to which the tariff applies, while an ad valorem tariff applies to large classes of products 
D) applies only to imports, while an ad valorem tariff applies only to exports 
E) sets a strict quota limit on the amount one individual can purchase, while an ad valorem tariff sets no such limit 
A) is a set amount of money per unit of a product, while an ad valorem tariff is a set percentage of product price 
B) is a set percentage of product price, while an ad valorem tariff is a set amount of money per unit of a product 
C) names a particular good to which the tariff applies, while an ad valorem tariff applies to large classes of products 
D) applies only to imports, while an ad valorem tariff applies only to exports 
E) sets a strict quota limit on the amount one individual can purchase, while an ad valorem tariff sets no such limit

The difference between the effect of an import quota when quota rights are given away and the effect of a tariff is that

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning comparative advantage between the two countries?

The world price of a good is

Exhibit 19-5 At a world price of $1.00 in Exhibit 19-5,

Exhibit 19-1 Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.What is the opportunity cost of a fish in Lambda?

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 1 fish per coconut, then Lambda and Beta would be able to benefit from specialization and trade.

Exhibit 19-2 In Exhibit 19-2, the United States should produce rice and trade its rice for Costa Rica's t-shirts.

If the United States has an absolute advantage in producing computer components, it should export them worldwide.

A country should export only those goods for which, relative to its trading partners, it has the

Exhibit 19-4 In Exhibit 19-4, if the world price of tulips is $4 and there are no trade restrictions, The Netherlands will

To be effective, an import quota must

The difference between a specific tariff and an ad valorem tariff is that a specific tariff

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

Filters

Exam 19: International Trade

The difference between the effect of an import quota when quota rights are given away and the effect of a tariff is that

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning comparative advantage between the two countries?

The world price of a good is

Exhibit 19-5 At a world price of $1.00 in Exhibit 19-5,

Exhibit 19-1 Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.What is the opportunity cost of a fish in Lambda?

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 1 fish per coconut, then Lambda and Beta would be able to benefit from specialization and trade.

Exhibit 19-2 In Exhibit 19-2, the United States should produce rice and trade its rice for Costa Rica's t-shirts.

If the United States has an absolute advantage in producing computer components, it should export them worldwide.

A country should export only those goods for which, relative to its trading partners, it has the

Exhibit 19-4 In Exhibit 19-4, if the world price of tulips is $4 and there are no trade restrictions, The Netherlands will

To be effective, an import quota must

The difference between a specific tariff and an ad valorem tariff is that a specific tariff

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

Filters