Question 1

Dumping occurs when a foreign firm .

Accepted Answer

A)  sells inferior output to foreigners 
B)  pollutes international waters 
C)  disposes of waste material internationally 
D)  sells its exports at a lower price than its cost of production 
A)  sells inferior output to foreigners 
B)  pollutes international waters 
C)  disposes of waste material internationally 
D)  sells its exports at a lower price than its cost of production

Question 2

Who benefits from a tariff on a good?

Accepted Answer

A)  Foreign producers of the good 
B)  Domestic producers of the good 
C)  Domestic consumers of the good 
D)  Foreign governments 
A)  Foreign producers of the good 
B)  Domestic producers of the good 
C)  Domestic consumers of the good 
D)  Foreign governments

Question 3

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

Accepted Answer

A)  more airplanes will be produced in the United States 
B)  there will be no change in the price of airplanes in the United States 
C)  the quantity of airplanes demanded in the United States will increase 
D)  the world price of airplanes will increase 
A)  more airplanes will be produced in the United States 
B)  there will be no change in the price of airplanes in the United States 
C)  the quantity of airplanes demanded in the United States will increase 
D)  the world price of airplanes will increase

Question 4

The fundamental force that drives international trade is:

Accepted Answer

A)  Countries' desire to increase their trade surplus 
B)  Cheap labor in countries like China or India 
C)  Absolute advantage 
D)  Comparative advantage 
A)  Countries' desire to increase their trade surplus 
B)  Cheap labor in countries like China or India 
C)  Absolute advantage 
D)  Comparative advantage

Question 5

When the principle of comparative advantage is used to guide trade, then a country will specialize by producing only

Accepted Answer

A)  goods for which production takes fewer worker- hour than another country. 
B)  goods for which production costs are more than average total costs. 
C)  goods with the highest opportunity cost. 
D)  goods with the lowest opportunity costs. 
A)  goods for which production takes fewer worker- hour than another country. 
B)  goods for which production costs are more than average total costs. 
C)  goods with the highest opportunity cost. 
D)  goods with the lowest opportunity costs.

Question 6

The (false) idea that an industry should be protected because of learning- by- doing until it is large enough to compete successfully in world markets is the argument for protection.

Accepted Answer

A)  comparative advantage 
B)  infant industry 
C)  cheap foreign labor 
D)  dumping 
A)  comparative advantage 
B)  infant industry 
C)  cheap foreign labor 
D)  dumping

Question 7

Which of the following are valid reasons advanced by almost all economists? Protection

Accepted Answer

A)  is a good way for governments in developed nations to raise revenue. 
B)  saves jobs. 
C)  prevents rich countries from exploiting poorer countries. 
D)  Economists would not support any of the above reasons. 
A)  is a good way for governments in developed nations to raise revenue. 
B)  saves jobs. 
C)  prevents rich countries from exploiting poorer countries. 
D)  Economists would not support any of the above reasons.

Question 8

Consider a market that sells some of its goods as exports. Who does NOT benefit?

Accepted Answer

A)  foreign consumers 
B)  workers in the industry 
C)  domestic producers 
D)  domestic consumers 
A)  foreign consumers 
B)  workers in the industry 
C)  domestic producers 
D)  domestic consumers

Question 9

When a foreign firm sells its exports at a lower price than its cost of production, the firm is

Accepted Answer

A)  avoiding a tariff. 
B)  imposing an economies of scale cost. 
C)  competing in an infant industry. 
D)  dumping. 
A)  avoiding a tariff. 
B)  imposing an economies of scale cost. 
C)  competing in an infant industry. 
D)  dumping.

Question 10

Which of the following is a reason why only limited attempts are made to compensate those who lose from free international trade?

Accepted Answer

A)  No one loses in the from free trade in the long run. 
B)  Free trade advocates consistently lobby to eliminate compensation. 
C)  It would be difficult to determine the extent to which someone's sufferings were because of free trade and not due to reasons under their own control. 
D)  None of the above answers are correct. 
A)  No one loses in the from free trade in the long run. 
B)  Free trade advocates consistently lobby to eliminate compensation. 
C)  It would be difficult to determine the extent to which someone's sufferings were because of free trade and not due to reasons under their own control. 
D)  None of the above answers are correct.

Question 11

Suppose the country of Mooland imposes tariffs on imported beef from the country of Aqualand. As a result of the tariffs, the

Accepted Answer

A)  quantity of beef imported by Mooland increases. 
B)  price of beef in Mooland falls. 
C)  quantity of beef exported by Mooland increases. 
D)  quantity of beef imported by Mooland decreases. 
A)  quantity of beef imported by Mooland increases. 
B)  price of beef in Mooland falls. 
C)  quantity of beef exported by Mooland increases. 
D)  quantity of beef imported by Mooland decreases.

Question 12

If the United States imposes a tariff on $1 per imported shirt, the higher tariff will

Accepted Answer

A)  decrease imports of shirts into the United States. 
B)  raise the price of a shirt to U.S. consumers. 
C)  benefit U.S. shirt producers. 
D)  all of the above 
A)  decrease imports of shirts into the United States. 
B)  raise the price of a shirt to U.S. consumers. 
C)  benefit U.S. shirt producers. 
D)  all of the above

Question 13

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

Accepted Answer

A) True 
 B)False

Question 14

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations. However, are there any losers from such a policy change?

Accepted Answer

Yes, there are losers from opening up to

Question 15

"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other, only the country with the absolute advantage gains." Is the previous statement correct or incorrect? Briefly explain your answer.

Accepted Answer

The statement is incorrect. Absolute adv

Question 16

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter.
-In the figure above, with international trade helicopters per year are produced in the United States.

Accepted Answer

A)  480 
B)  720 
C)  360 
D)  240 
A)  480 
B)  720 
C)  360 
D)  240

Question 17

Import quotas _ the price of imported goods and _ the quantity consumed in the nation imposing the quota.

Accepted Answer

A)  lower; decrease 
B)  raise; increase 
C)  raise; decrease 
D)  lower; increase 
A)  lower; decrease 
B)  raise; increase 
C)  raise; decrease 
D)  lower; increase

Question 18

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers?

Accepted Answer

A)  U.S. producers are helped and U.S. consumers are harmed. 
B)  U.S. producers are harmed and U.S. consumers are harmed. 
C)  U.S. producers are harmed and U.S. consumers are helped. 
D)  U.S. producers are harmed and U.S. consumers are helped . 
A)  U.S. producers are helped and U.S. consumers are harmed. 
B)  U.S. producers are harmed and U.S. consumers are harmed. 
C)  U.S. producers are harmed and U.S. consumers are helped. 
D)  U.S. producers are harmed and U.S. consumers are helped .

Question 19

Selling a product in a foreign nation at a price less than its cost of production is called

Accepted Answer

A)  net exporting. 
B)  dumping. 
C)  infant- industry exploitation. 
D)  absolute advantage. 
A)  net exporting. 
B)  dumping. 
C)  infant- industry exploitation. 
D)  absolute advantage.

Question 20

Goods and services that we buy from people in other countries are called our

Accepted Answer

A)  imports. 
B)  terms of trade. 
C)  exports. 
D)  balance of payments. 
A)  imports. 
B)  terms of trade. 
C)  exports. 
D)  balance of payments.

Dumping occurs when a foreign firm .

Who benefits from a tariff on a good?

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

The fundamental force that drives international trade is:

When the principle of comparative advantage is used to guide trade, then a country will specialize by producing only

The (false) idea that an industry should be protected because of learning- by- doing until it is large enough to compete successfully in world markets is the argument for protection.

Which of the following are valid reasons advanced by almost all economists? Protection

Consider a market that sells some of its goods as exports. Who does NOT benefit?

When a foreign firm sells its exports at a lower price than its cost of production, the firm is

Which of the following is a reason why only limited attempts are made to compensate those who lose from free international trade?

Suppose the country of Mooland imposes tariffs on imported beef from the country of Aqualand. As a result of the tariffs, the

If the United States imposes a tariff on $1 per imported shirt, the higher tariff will

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations. However, are there any losers from such a policy change?

"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other, only the country with the absolute advantage gains." Is the previous statement correct or incorrect? Briefly explain your answer.

Import quotas _ the price of imported goods and _ the quantity consumed in the nation imposing the quota.

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers?

Selling a product in a foreign nation at a price less than its cost of production is called

Goods and services that we buy from people in other countries are called our

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Filters

Exam 15: International Trade Policy

Dumping occurs when a foreign firm .

Who benefits from a tariff on a good?

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

The fundamental force that drives international trade is:

When the principle of comparative advantage is used to guide trade, then a country will specialize by producing only

The (false) idea that an industry should be protected because of learning- by- doing until it is large enough to compete successfully in world markets is the argument for protection.

Which of the following are valid reasons advanced by almost all economists? Protection

Consider a market that sells some of its goods as exports. Who does NOT benefit?

When a foreign firm sells its exports at a lower price than its cost of production, the firm is

Which of the following is a reason why only limited attempts are made to compensate those who lose from free international trade?

Suppose the country of Mooland imposes tariffs on imported beef from the country of Aqualand. As a result of the tariffs, the

If the United States imposes a tariff on $1 per imported shirt, the higher tariff will

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations. However, are there any losers from such a policy change?

"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other, only the country with the absolute advantage gains." Is the previous statement correct or incorrect? Briefly explain your answer.

Import quotas _ the price of imported goods and _ the quantity consumed in the nation imposing the quota.

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers?

Selling a product in a foreign nation at a price less than its cost of production is called

Goods and services that we buy from people in other countries are called our

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Filters