Question 1

In the United States, those who are the most vocal about retaliation against other countries are those who want to protect an industry.

Accepted Answer

A) True 
 B)False

Question 2

Unlike in developed countries, revenue tariffs are not common in developing countries.

Accepted Answer

A) True 
 B)False

Question 3

Exhibit 29-1  
-According to the data in Exhibit 29-1, the opportunity cost of producing one more unit of good A in China is

Accepted Answer

A) 3 units of good B. 
B) 2 units of good B. 
C) 5 units of good B. 
D) 1/2 unit of good B. 
E) 1/3 unit of good B. 
A) 3 units of good B. 
B) 2 units of good B. 
C) 5 units of good B. 
D) 1/2 unit of good B. 
E) 1/3 unit of good B.

Question 4

In the last 50 years, international trade has grown

Accepted Answer

A) rapidly because of fewer trade barriers. 
B) slowly because of increasing transportation costs. 
C) slowly because of more government restrictions. 
D) rapidly because it is more fashionable to consume foreign goods. 
E) neither more slowly nor more rapidly than in past years. 
A) rapidly because of fewer trade barriers. 
B) slowly because of increasing transportation costs. 
C) slowly because of more government restrictions. 
D) rapidly because it is more fashionable to consume foreign goods. 
E) neither more slowly nor more rapidly than in past years.

Question 5

Exhibit 29-4  
-Referring to Exhibit 29-4, suppose you are given the following information about the production of two goods in two countries.

Accepted Answer

The answer of Exhibit 29-4  
-Referring to Exhibit 29-4,...

Question 6

What is a tariff?

Accepted Answer

A) A limit on the amount of products that can be imported into a country 
B) A limit on the amount of products that can be exported out of a country 
C) A tax on goods and services imported into a country 
D) A tax on goods and services exported out of a country 
E) The rate at which goods and services are traded internationally 
A) A limit on the amount of products that can be imported into a country 
B) A limit on the amount of products that can be exported out of a country 
C) A tax on goods and services imported into a country 
D) A tax on goods and services exported out of a country 
E) The rate at which goods and services are traded internationally

Question 7

A country cannot have a comparative advantage in the production of all goods.

Accepted Answer

A) True 
 B)False

Question 8

What was the purpose of the Smoot-Hawley tariff of 1930? Did it work? Explain.

Accepted Answer

The president and Congress at the time h

Question 9

The British corn laws

Accepted Answer

A) pertained to restricting imports of grains into Great Britain. 
B) were, in part, responsible for the devastation caused by the Irish potato famine. 
C) stymied the growth of British manufacturing. 
D) benefited British farmers. 
E) All of these 
A) pertained to restricting imports of grains into Great Britain. 
B) were, in part, responsible for the devastation caused by the Irish potato famine. 
C) stymied the growth of British manufacturing. 
D) benefited British farmers. 
E) All of these

Question 10

The principle by which all countries involved in GATT negotiations receive the same tariff rates as the country with the lowest negotiated tariff rates is called

Accepted Answer

A) regional trading areas. 
B) Uruguay Round. 
C) customs unions. 
D) most-favored nation. 
E) economic unionization. 
A) regional trading areas. 
B) Uruguay Round. 
C) customs unions. 
D) most-favored nation. 
E) economic unionization.

Question 11

Suppose the United States decides to grant most-favored-nation status to Ukraine. What does this status mean? How will it affect the price and quantity of U.S. imports from Ukraine? Is this an increase or decrease in deadweight loss? Is this an increase or decrease in tariff revenue?

Accepted Answer

Most-favored-nation status means that Uk

Question 12

Consider an industry in which, for each individual firm in the industry, cost per unit of output declines as the individual firm's output increases. As the size of the market increases, the average total cost at each firm

Accepted Answer

A) decreases because each firm produces more. 
B) decreases because each firm produces less. 
C) increases because each firm produces less. 
D) increases because each firm produces more. 
E) remains the same because the number of firms remains constant. 
A) decreases because each firm produces more. 
B) decreases because each firm produces less. 
C) increases because each firm produces less. 
D) increases because each firm produces more. 
E) remains the same because the number of firms remains constant.

Question 13

Rose has an absolute advantage over Sam in computer programming and sales. Her efficiency at programming compared to Sam's is greater than her efficiency at sales compared to Sam's.

Accepted Answer

A) Rose has a comparative advantage in sales. 
B) Sam has an absolute advantage in sales. 
C) Sam has a comparative advantage in programming. 
D) Sam has a comparative advantage in sales. 
E) Sam has an absolute advantage in programming. 
A) Rose has a comparative advantage in sales. 
B) Sam has an absolute advantage in sales. 
C) Sam has a comparative advantage in programming. 
D) Sam has a comparative advantage in sales. 
E) Sam has an absolute advantage in programming.

Question 14

If one country has a lower level of capital per worker than another country, it is relatively

Accepted Answer

A) labor abundant. 
B) capital intensive. 
C) capital abundant. 
D) labor intensive. 
E) labor deepened. 
A) labor abundant. 
B) capital intensive. 
C) capital abundant. 
D) labor intensive. 
E) labor deepened.

Question 15

Suppose Rose has a comparative advantage over Sam in programming rather than in sales. If Rose sold programs rather than write them, then she would

Accepted Answer

A) sacrifice her programming time and her profits would rise. 
B) not sacrifice her programming time and her profits would rise. 
C) sacrifice her programming time and her profits would fall. 
D) not sacrifice her programming time and her profits would fall. 
E) not sacrifice her programming time because she could make just as much profits by selling as she could by programming. 
A) sacrifice her programming time and her profits would rise. 
B) not sacrifice her programming time and her profits would rise. 
C) sacrifice her programming time and her profits would fall. 
D) not sacrifice her programming time and her profits would fall. 
E) not sacrifice her programming time because she could make just as much profits by selling as she could by programming.

Question 16

A long-run equilibrium in an industry exists when

Accepted Answer

A) cost per unit is at its lowest possible level. 
B) there is only one firm in the industry. 
C) the size of the market remains constant. 
D) price equals cost per unit. 
E) price equals marginal cost. 
A) cost per unit is at its lowest possible level. 
B) there is only one firm in the industry. 
C) the size of the market remains constant. 
D) price equals cost per unit. 
E) price equals marginal cost.

Question 17

If there are increasing opportunity costs of production, the production possibilities curve will bow inward.

Accepted Answer

A) True 
 B)False

Question 18

Suppose Canada has 400 units of labor and the United States has 800 units of labor. In Canada, 1 unit of labor can produce 10 bushels of wheat or 5 pounds of fish. In the United States, 1 unit of labor can produce 12 bushels of wheat or 6 pounds of fish. Draw the production possibilities curve for each country. Who has a comparative advantage in the production of wheat? Explain.

Accepted Answer

Neither country has a comparat

Question 19

The corn laws were laws that pertained to restricting imports of the vegetable corn into England.

Accepted Answer

A) True 
 B)False

Question 20

If the price U.S. consumers pay with a quota on an imported good exceeds the price they pay without a quota, then the quota was set

Accepted Answer

A) above the equilibrium quantity without a quota. 
B) below the equilibrium quantity without a quota. 
C) sometimes above and sometimes below the equilibrium quantity without a quota. 
D) equal to the equilibrium quantity without a quota. 
E) to allow a different quantity of imports than a tariff. 
A) above the equilibrium quantity without a quota. 
B) below the equilibrium quantity without a quota. 
C) sometimes above and sometimes below the equilibrium quantity without a quota. 
D) equal to the equilibrium quantity without a quota. 
E) to allow a different quantity of imports than a tariff.

Exam 29: International Trade

In the United States, those who are the most vocal about retaliation against other countries are those who want to protect an industry.

Unlike in developed countries, revenue tariffs are not common in developing countries.

Exhibit 29-1 -According to the data in Exhibit 29-1, the opportunity cost of producing one more unit of good A in China is

In the last 50 years, international trade has grown

Exhibit 29-4 -Referring to Exhibit 29-4, suppose you are given the following information about the production of two goods in two countries.

What is a tariff?

A country cannot have a comparative advantage in the production of all goods.

What was the purpose of the Smoot-Hawley tariff of 1930? Did it work? Explain.

The British corn laws

The principle by which all countries involved in GATT negotiations receive the same tariff rates as the country with the lowest negotiated tariff rates is called

Suppose the United States decides to grant most-favored-nation status to Ukraine. What does this status mean? How will it affect the price and quantity of U.S. imports from Ukraine? Is this an increase or decrease in deadweight loss? Is this an increase or decrease in tariff revenue?

Consider an industry in which, for each individual firm in the industry, cost per unit of output declines as the individual firm's output increases. As the size of the market increases, the average total cost at each firm

Rose has an absolute advantage over Sam in computer programming and sales. Her efficiency at programming compared to Sam's is greater than her efficiency at sales compared to Sam's.

If one country has a lower level of capital per worker than another country, it is relatively

Suppose Rose has a comparative advantage over Sam in programming rather than in sales. If Rose sold programs rather than write them, then she would

A long-run equilibrium in an industry exists when

If there are increasing opportunity costs of production, the production possibilities curve will bow inward.

The corn laws were laws that pertained to restricting imports of the vegetable corn into England.

If the price U.S. consumers pay with a quota on an imported good exceeds the price they pay without a quota, then the quota was set

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Finance

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