Question 1

When a country imposes tariffs,it is likely to cause

Accepted Answer

A) Increased quantities of imports. 
B) Higher prices for the import-competing goods both domestically and abroad. 
C) Lower prices for domestic production. 
D) Less expensive exports. 
A) Increased quantities of imports. 
B) Higher prices for the import-competing goods both domestically and abroad. 
C) Lower prices for domestic production. 
D) Less expensive exports. B

Question 2

Goods and services purchased from international sources are

Accepted Answer

A) Exports. 
B) Imports. 
C) Net exports. 
D) Net imports. 
A) Exports. 
B) Imports. 
C) Net exports. 
D) Net imports. B

Question 3

According to the text,which of the following are both imports and exports for the United States?

Accepted Answer

A) Cars,computers,and auto parts. 
B) Baseballs,computers,and cars. 
C) Computers,oil,and auto parts. 
D) No single product can be both an import and an export for a given country. 
A) Cars,computers,and auto parts. 
B) Baseballs,computers,and cars. 
C) Computers,oil,and auto parts. 
D) No single product can be both an import and an export for a given country. A

Question 4

In Figure 35.1,what is the opportunity cost of motorcycles in the United States?

Accepted Answer

A) 1/2 of a DVD player per motorcycle. 
B) 1/3 of a DVD player per motorcycle. 
C) 2 DVD players per motorcycle. 
D) 1 DVD player per motorcycle. 
A) 1/2 of a DVD player per motorcycle. 
B) 1/3 of a DVD player per motorcycle. 
C) 2 DVD players per motorcycle. 
D) 1 DVD player per motorcycle.

Question 5

Reducing protectionism allows greater gains from free trade.

Accepted Answer

A) True 
 B)False

Question 6

When tariffs are imposed,the losers include

Accepted Answer

A) Domestic consumers and the domestic government. 
B) Foreign consumers and domestic producers of import-competing goods. 
C) Domestic consumers and domestic producers of import-competing goods. 
D) Domestic consumers and foreign producers. 
A) Domestic consumers and the domestic government. 
B) Foreign consumers and domestic producers of import-competing goods. 
C) Domestic consumers and domestic producers of import-competing goods. 
D) Domestic consumers and foreign producers.

Question 7

Which of the following countries has the lowest export ratio?

Accepted Answer

A) The United States. 
B) India. 
C) Haiti. 
D) Samoa. 
A) The United States. 
B) India. 
C) Haiti. 
D) Samoa.

Question 8

Which of the following terms of trade would enable the two countries illustrated in Figure 35.1 to trade with each other and increase consumption possibilities?

Accepted Answer

A) 1/3 of a DVD player per motorcycle. 
B) 4 DVD players per motorcycle. 
C) 3 DVD players per motorcycle. 
D) 3/4 of a DVD player per motorcycle. 
A) 1/3 of a DVD player per motorcycle. 
B) 4 DVD players per motorcycle. 
C) 3 DVD players per motorcycle. 
D) 3/4 of a DVD player per motorcycle.

Question 9

Comparative advantage in production is achieved by

Accepted Answer

A) Subsidizing,specializing,and lowering the price of an exported good. 
B) Being able to produce a good with fewer inputs than in other countries. 
C) Having terms of trade that are better than the terms of trade faced in other countries. 
D) Having a lower opportunity cost of producing a good relative to that of other countries. 
A) Subsidizing,specializing,and lowering the price of an exported good. 
B) Being able to produce a good with fewer inputs than in other countries. 
C) Having terms of trade that are better than the terms of trade faced in other countries. 
D) Having a lower opportunity cost of producing a good relative to that of other countries.

Question 10

International trade allows a country's consumption possibilities to exceed its production possibilities.

Accepted Answer

A) True 
 B)False

Question 11

An embargo is

Accepted Answer

A) A prohibition on exports or imports. 
B) A tax imposed on imported goods. 
C) A limit to the quantity of a good that may be imported in a given time period. 
D) An orderly marketing agreement. 
A) A prohibition on exports or imports. 
B) A tax imposed on imported goods. 
C) A limit to the quantity of a good that may be imported in a given time period. 
D) An orderly marketing agreement.

Question 12

A country's export ratio is

Accepted Answer

A) The ratio of imports to exports. 
B) The ratio of exports to GDP. 
C) The ratio of trade to GDP. 
D) The ratio of imports to GDP. 
A) The ratio of imports to exports. 
B) The ratio of exports to GDP. 
C) The ratio of trade to GDP. 
D) The ratio of imports to GDP.

Question 13

Table 35.1 $$\begin{array} { | l | c | c | } 
\hline { \text { Country } } & \text { Tons of Soybeans } & \text { Computer } \
\hline \text { China } & 100 & 300 \
\hline \text { United States } & 150 & 750 \
\hline
\end{array}$$ Based on the information in Table 35.1,assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods.For trade to be mutually beneficial for both countries,the terms of trade will be such that 1 computer will exchange for

Accepted Answer

A) More than 3 tons of soybeans but less than 5. 
B) More than 1/5 of a ton of soybeans but less than 1/3. 
C) Less than 1/5 of a ton of soybeans. 
D) Zero soybeans. 
A) More than 3 tons of soybeans but less than 5. 
B) More than 1/5 of a ton of soybeans but less than 1/3. 
C) Less than 1/5 of a ton of soybeans. 
D) Zero soybeans.

Question 14

Suppose that Brazil has a comparative advantage in coffee and Mexico has a comparative advantage in tomatoes.Which of the following groups would be worse off if these countries specialize and trade?

Accepted Answer

A) Mexican coffee producers. 
B) Brazilian coffee producers. 
C) Mexican tomato producers. 
D) All groups are better off when specialization and trade take place. 
A) Mexican coffee producers. 
B) Brazilian coffee producers. 
C) Mexican tomato producers. 
D) All groups are better off when specialization and trade take place.

Question 15

Increased trade restrictions

Accepted Answer

A) Increase a trade deficit in the short run. 
B) Reduce total consumption possibilities. 
C) Alter a nation's production possibilities. 
D) Have a neutral impact since the losses cancel out the benefits. 
A) Increase a trade deficit in the short run. 
B) Reduce total consumption possibilities. 
C) Alter a nation's production possibilities. 
D) Have a neutral impact since the losses cancel out the benefits.

Question 16

Dumping is said to occur when

Accepted Answer

A) Foreign producers sell their goods abroad at prices lower than their marginal cost of production. 
B) Foreign producers sell their goods abroad at prices lower than our average cost of production. 
C) Foreign producers sell their goods in export markets at prices below domestic prices. 
D) Some foreign countries have trade surpluses and others have a trade deficit. 
A) Foreign producers sell their goods abroad at prices lower than their marginal cost of production. 
B) Foreign producers sell their goods abroad at prices lower than our average cost of production. 
C) Foreign producers sell their goods in export markets at prices below domestic prices. 
D) Some foreign countries have trade surpluses and others have a trade deficit.

Question 17

The amount of good A given up for good B in trade is the

Accepted Answer

A) Comparative advantage. 
B) Absolute advantage. 
C) Terms of trade. 
D) Exploitation of consumers. 
A) Comparative advantage. 
B) Absolute advantage. 
C) Terms of trade. 
D) Exploitation of consumers.

Question 18

Two countries with differing comparative advantages may engage in trade because

Accepted Answer

A) They will be able to consume more goods in total due to specialization and trade. 
B) They will achieve an absolute advantage with one another. 
C) They will be able to produce and consume goods on their production possibilities curves. 
D) They are required to because they are part of the World Trade Organization. 
A) They will be able to consume more goods in total due to specialization and trade. 
B) They will achieve an absolute advantage with one another. 
C) They will be able to produce and consume goods on their production possibilities curves. 
D) They are required to because they are part of the World Trade Organization.

Question 19

Over a given period of time,if imports are greater than exports,the result is

Accepted Answer

A) A trade war. 
B) A trade deficit. 
C) An embargo. 
D) A trade surplus. 
A) A trade war. 
B) A trade deficit. 
C) An embargo. 
D) A trade surplus.

Question 20

A quota is

Accepted Answer

A) A limit on the quantity of a good that may be imported in a given time period. 
B) A tax imposed on imported goods. 
C) A prohibition against trading a good. 
D) An elimination of trade to nurture an infant industry. 
A) A limit on the quantity of a good that may be imported in a given time period. 
B) A tax imposed on imported goods. 
C) A prohibition against trading a good. 
D) An elimination of trade to nurture an infant industry.

Exam 35: International Trade

When a country imposes tariffs,it is likely to cause

Goods and services purchased from international sources are

According to the text,which of the following are both imports and exports for the United States?

In Figure 35.1,what is the opportunity cost of motorcycles in the United States?

Reducing protectionism allows greater gains from free trade.

When tariffs are imposed,the losers include

Which of the following countries has the lowest export ratio?

Which of the following terms of trade would enable the two countries illustrated in Figure 35.1 to trade with each other and increase consumption possibilities?

Comparative advantage in production is achieved by

International trade allows a country's consumption possibilities to exceed its production possibilities.

An embargo is

A country's export ratio is

Suppose that Brazil has a comparative advantage in coffee and Mexico has a comparative advantage in tomatoes.Which of the following groups would be worse off if these countries specialize and trade?

Increased trade restrictions

Dumping is said to occur when

The amount of good A given up for good B in trade is the

Two countries with differing comparative advantages may engage in trade because

Over a given period of time,if imports are greater than exports,the result is

A quota is

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