Question 1

Suppose France produces only two goods,airplanes and grapes.If France has a comparative advantage in grapes,a move toward free trade will:

Accepted Answer

A) harm grape workers,benefit airplane workers,but benefit the nation as a whole. 
B) harm grape workers,harm airplane workers,but benefit the nation as a whole. 
C) benefit grape workers,harm airplane workers,but harm the nation as a whole. 
D) benefit grape workers,harm airplane workers,but benefit the nation as a whole. 
A) harm grape workers,benefit airplane workers,but benefit the nation as a whole. 
B) harm grape workers,harm airplane workers,but benefit the nation as a whole. 
C) benefit grape workers,harm airplane workers,but harm the nation as a whole. 
D) benefit grape workers,harm airplane workers,but benefit the nation as a whole.

Question 2

Figure 18.3
-Refer to Figure 18.3.With a tariff or quota,the equilibrium quantity is:

Accepted Answer

A) 80. 
B) 100. 
C) 60. 
D) 40. 
A) 80. 
B) 100. 
C) 60. 
D) 40.

Question 3

Figure 18.3
-Refer to Figure 18.3.With free trade,the equilibrium price is:

Accepted Answer

A) $0. 
B) $12. 
C) $10. 
D) $8. 
A) $0. 
B) $12. 
C) $10. 
D) $8.

Question 4

Figure 18.3
-Refer to Figure 18.3.With an import ban,domestic production is:

Accepted Answer

A) 80. 
B) 100. 
C) 60. 
D) 0. 
A) 80. 
B) 100. 
C) 60. 
D) 0.

Question 5

Which of the following is NOT a reason to follow protectionist trade policies?

Accepted Answer

A) to protect an infant industry from foreign competitors 
B) to help firms establish a world monopoly in a particular market 
C) to protect domestic workers from foreign competition 
D) because buying domestic goods is a patriotic act 
A) to protect an infant industry from foreign competitors 
B) to help firms establish a world monopoly in a particular market 
C) to protect domestic workers from foreign competition 
D) because buying domestic goods is a patriotic act

Question 6

A possible reason a nation might impose a protectionist policy such as a tariff is to:

Accepted Answer

A) help firms establish a world monopoly in a particular market. 
B) increase the level of imports. 
C) encourage specialization in the good in which the nation has a comparative advantage. 
D) increase the welfare of domestic consumers. 
A) help firms establish a world monopoly in a particular market. 
B) increase the level of imports. 
C) encourage specialization in the good in which the nation has a comparative advantage. 
D) increase the welfare of domestic consumers.

Question 7

Figure 18.3
-Refer to Figure 18.3.With free trade,domestic production is:

Accepted Answer

A) 80. 
B) 100. 
C) 60. 
D) 0. 
A) 80. 
B) 100. 
C) 60. 
D) 0.

Question 8

During the 1980s,firms from ________ were accused of dumping VCRs in Europe.

Accepted Answer

A) Taiwan 
B) Japan 
C) Mexico 
D) Korea 
A) Taiwan 
B) Japan 
C) Mexico 
D) Korea

Question 9

What proof does the application use to illustrate that tariffs hurt the poor more than the rich?

Accepted Answer

A) The proportion of tariffs paid relative to expenditures is higher on the poor than the rich. 
B) The proportion of tariffs paid relative to expenditures is lower on the poor than the rich. 
C) The total amount of dollars paid by the poor in the form of import tariffs is larger than the rich. 
D) The amount of dollars paid by the poor in the form of income taxes is higher with poor individuals than rich individuals. 
A) The proportion of tariffs paid relative to expenditures is higher on the poor than the rich. 
B) The proportion of tariffs paid relative to expenditures is lower on the poor than the rich. 
C) The total amount of dollars paid by the poor in the form of import tariffs is larger than the rich. 
D) The amount of dollars paid by the poor in the form of income taxes is higher with poor individuals than rich individuals.

Question 10

Voluntary export restraints are illegal under WTO rules.

Accepted Answer

A) True 
 B)False

Question 11

According to the application,how does the Department of Commerce determine the price of the good in the foreign market?

Accepted Answer

A) They use a "constructed value" method where it makes its own estimates of what prices in countries' own markets would be based on available data. 
B) They use dated and very crude estimates. 
C) They rely on the information supplied by the firms that bring about the charges. 
D) All of the above are correct. 
A) They use a "constructed value" method where it makes its own estimates of what prices in countries' own markets would be based on available data. 
B) They use dated and very crude estimates. 
C) They rely on the information supplied by the firms that bring about the charges. 
D) All of the above are correct.

Question 12

Do most infant industries become as efficient as their international competition?

Accepted Answer

A) No.This rarely happens. 
B) yes,but only if they get very large protection 
C) Yes,it always happens. 
D) yes,but only after decades of protection 
A) No.This rarely happens. 
B) yes,but only if they get very large protection 
C) Yes,it always happens. 
D) yes,but only after decades of protection

Question 13

An import quota is the same as an import ban.

Accepted Answer

A) True 
 B)False

Question 14

According to the application,living standards have NOT become more unequal because:

Accepted Answer

A) the prices of goods and services that low income groups have paid have risen slower than the prices of goods and services that high income groups have paid. 
B) the prices of goods and services that low income groups have paid have risen faster than the prices of goods and services that high income groups have paid. 
C) the prices of goods and services that low income groups have paid have been dropping while the prices of goods and services that high income groups have not. 
D) the prices of goods and services that low income groups have paid have risen while the prices of goods and services that high income groups have not. 
A) the prices of goods and services that low income groups have paid have risen slower than the prices of goods and services that high income groups have paid. 
B) the prices of goods and services that low income groups have paid have risen faster than the prices of goods and services that high income groups have paid. 
C) the prices of goods and services that low income groups have paid have been dropping while the prices of goods and services that high income groups have not. 
D) the prices of goods and services that low income groups have paid have risen while the prices of goods and services that high income groups have not.

Question 15

Which of the following situations will arise in the domestic market following the imposition of a tariff?

Accepted Answer

A) imports decrease,domestic production increases,prices increase 
B) imports increase,domestic production increases,prices increase 
C) imports increase,domestic production decreases,prices decrease 
D) imports decrease,domestic production increases,prices decrease 
A) imports decrease,domestic production increases,prices increase 
B) imports increase,domestic production increases,prices increase 
C) imports increase,domestic production decreases,prices decrease 
D) imports decrease,domestic production increases,prices decrease

Question 16

Daily Output of Scotland and Poland
   Table 18.1
-Refer to Table 18.1.Scotland has a comparative advantage in:

Accepted Answer

A) accordions. 
B) bagpipes. 
C) both accordions and bagpipes. 
D) neither accordions nor bagpipes. 
A) accordions. 
B) bagpipes. 
C) both accordions and bagpipes. 
D) neither accordions nor bagpipes.

Question 17

In 2002,President Bush imposed a tariff on imported steel in order to protect domestic steel producers.What was the reason why the tariff ended?

Accepted Answer

A) the threat of retaliatory tariffs by Europe 
B) the threat of a possible recession in the U.S. 
C) the improved profitability of domestic steel firms 
D) the decrease in demand for steel by U.S.industries 
A) the threat of retaliatory tariffs by Europe 
B) the threat of a possible recession in the U.S. 
C) the improved profitability of domestic steel firms 
D) the decrease in demand for steel by U.S.industries

Question 18

The first major international agreement after World War II was the:

Accepted Answer

A) General Agreement on Tariffs and Trade. 
B) North American Free Trade Area. 
C) World Trade Organization. 
D) European Union. 
A) General Agreement on Tariffs and Trade. 
B) North American Free Trade Area. 
C) World Trade Organization. 
D) European Union.

Question 19

According to the data presented in the text,the effect of Japan's voluntary export restraints on cars was to:

Accepted Answer

A) increase the price of Japanese cars in the U.S. 
B) decrease the price of Japanese cars in the U.S. 
C) increase the number of Japanese cars imported in the U.S. 
D) caused Japanese car companies to delay building plants in the U.S. 
A) increase the price of Japanese cars in the U.S. 
B) decrease the price of Japanese cars in the U.S. 
C) increase the number of Japanese cars imported in the U.S. 
D) caused Japanese car companies to delay building plants in the U.S.

Question 20

The consumption possibilities curve shows the combinations of goods that can be:

Accepted Answer

A) consumed by a nation before trade begins. 
B) consumed by a nation after trading begins. 
C) produced by a nation before trading begins. 
D) produced by a nation after trade begins. 
A) consumed by a nation before trade begins. 
B) consumed by a nation after trading begins. 
C) produced by a nation before trading begins. 
D) produced by a nation after trade begins.

Suppose France produces only two goods,airplanes and grapes.If France has a comparative advantage in grapes,a move toward free trade will:

Figure 18.3 -Refer to Figure 18.3.With a tariff or quota,the equilibrium quantity is:

Figure 18.3 -Refer to Figure 18.3.With free trade,the equilibrium price is:

Figure 18.3 -Refer to Figure 18.3.With an import ban,domestic production is:

Which of the following is NOT a reason to follow protectionist trade policies?

A possible reason a nation might impose a protectionist policy such as a tariff is to:

Figure 18.3 -Refer to Figure 18.3.With free trade,domestic production is:

During the 1980s,firms from ________ were accused of dumping VCRs in Europe.

What proof does the application use to illustrate that tariffs hurt the poor more than the rich?

Voluntary export restraints are illegal under WTO rules.

According to the application,how does the Department of Commerce determine the price of the good in the foreign market?

Do most infant industries become as efficient as their international competition?

An import quota is the same as an import ban.

According to the application,living standards have NOT become more unequal because:

Which of the following situations will arise in the domestic market following the imposition of a tariff?

Daily Output of Scotland and Poland Table 18.1 -Refer to Table 18.1.Scotland has a comparative advantage in:

In 2002,President Bush imposed a tariff on imported steel in order to protect domestic steel producers.What was the reason why the tariff ended?

The first major international agreement after World War II was the:

According to the data presented in the text,the effect of Japan's voluntary export restraints on cars was to:

The consumption possibilities curve shows the combinations of goods that can be:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

Filters

Exam 18: International Trade and Public Policy

Suppose France produces only two goods,airplanes and grapes.If France has a comparative advantage in grapes,a move toward free trade will:

Figure 18.3 -Refer to Figure 18.3.With a tariff or quota,the equilibrium quantity is:

Figure 18.3 -Refer to Figure 18.3.With free trade,the equilibrium price is:

Figure 18.3 -Refer to Figure 18.3.With an import ban,domestic production is:

Which of the following is NOT a reason to follow protectionist trade policies?

A possible reason a nation might impose a protectionist policy such as a tariff is to:

Figure 18.3 -Refer to Figure 18.3.With free trade,domestic production is:

During the 1980s,firms from ________ were accused of dumping VCRs in Europe.

What proof does the application use to illustrate that tariffs hurt the poor more than the rich?

Voluntary export restraints are illegal under WTO rules.

According to the application,how does the Department of Commerce determine the price of the good in the foreign market?

Do most infant industries become as efficient as their international competition?

An import quota is the same as an import ban.

According to the application,living standards have NOT become more unequal because:

Which of the following situations will arise in the domestic market following the imposition of a tariff?

Daily Output of Scotland and Poland Table 18.1 -Refer to Table 18.1.Scotland has a comparative advantage in:

In 2002,President Bush imposed a tariff on imported steel in order to protect domestic steel producers.What was the reason why the tariff ended?

The first major international agreement after World War II was the:

According to the data presented in the text,the effect of Japan's voluntary export restraints on cars was to:

The consumption possibilities curve shows the combinations of goods that can be:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

Filters