Question 1

A key difference between tariffs and quotas is that

Accepted Answer

A)  the government receives revenue with tariffs, but the importer receives the added revenue with quotas. 
B)  the government receives revenue with quotas, but the importer receives the added revenue with tariffs. 
C)  consumers are hurt with quotas but not with tariffs. 
D)  consumers are hurt with tariffs but not with quotas. 
A)  the government receives revenue with tariffs, but the importer receives the added revenue with quotas. 
B)  the government receives revenue with quotas, but the importer receives the added revenue with tariffs. 
C)  consumers are hurt with quotas but not with tariffs. 
D)  consumers are hurt with tariffs but not with quotas.

Question 2

Comparative advantage implies that a country will

Accepted Answer

A)  export those goods in which the country has a comparative advantage. 
B)  find it difficult to conclude free trade agreements with other nations. 
C)  import those goods in which the country has a comparative advantage. 
D)  export goods produced by domestic industries with low wages relative to its trading partners. 
A)  export those goods in which the country has a comparative advantage. 
B)  find it difficult to conclude free trade agreements with other nations. 
C)  import those goods in which the country has a comparative advantage. 
D)  export goods produced by domestic industries with low wages relative to its trading partners.

Question 3

The goods and services that a country sells to people in other countries are called its

Accepted Answer

A)  quotas. 
B)  exports. 
C)  imports. 
D)  tariffs. 
A)  quotas. 
B)  exports. 
C)  imports. 
D)  tariffs.

Question 4

Of the groups listed below, which is most likely to lobby for protection?

Accepted Answer

A)  consumers in the import industry 
B)  workers in the export industry 
C)  workers in the import industry 
D)  producers in the export industry 
A)  consumers in the import industry 
B)  workers in the export industry 
C)  workers in the import industry 
D)  producers in the export industry

Question 5

Over the past 70 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

Accepted Answer

A) True 
 B)False

Question 6

A tariff is a tax that is imposed by the _ country when an _ good crosses its international boundary.

Accepted Answer

A)  importing; exported 
B)  exporting; imported 
C)  importing; imported 
D)  exporting; exported 
A)  importing; exported 
B)  exporting; imported 
C)  importing; imported 
D)  exporting; exported

Question 7

Which of the following is a valid reason for protecting an industry?

Accepted Answer

A)  Protection penalizes lax environmental standards. 
B)  The industry is unable to compete with low- wage foreign competitors. 
C)  Protection keeps richer nations from exploiting the workers of poorer countries. 
D)  None of the above reasons is a valid reason for protection. 
A)  Protection penalizes lax environmental standards. 
B)  The industry is unable to compete with low- wage foreign competitors. 
C)  Protection keeps richer nations from exploiting the workers of poorer countries. 
D)  None of the above reasons is a valid reason for protection.

Question 8

Which of the following best describes the history of tariffs in the United States over the past 70 years?

Accepted Answer

A)  Tariffs reached a maximum in the early 1930s and now average less than 5 percent 
B)  Tariffs have declined overall since the early 1930s and now average just over 10 percent. 
C)  Average tariff rates have not changed much since the early 1930s and are less than 5 percent. 
D)  Tariffs were at their highest level in the 1970s and now average just over 10 percent. 
A)  Tariffs reached a maximum in the early 1930s and now average less than 5 percent 
B)  Tariffs have declined overall since the early 1930s and now average just over 10 percent. 
C)  Average tariff rates have not changed much since the early 1930s and are less than 5 percent. 
D)  Tariffs were at their highest level in the 1970s and now average just over 10 percent.

Question 9

Currently Belize, a country in Central America, has a small coffee industry but does not export any coffee. Suppose the government of Belize, in order to protect the new coffee industry to enable it to grow into a mature industry that can compete in world markets, places a tariff on the importation of coffee. What is the argument for placing the tariff on coffee?

Accepted Answer

A)  The dumping argument 
B)  To prevent rich countries from exploiting developing countries 
C)  To protect Belize coffee workers 
D)  The infant- industry argument 
A)  The dumping argument 
B)  To prevent rich countries from exploiting developing countries 
C)  To protect Belize coffee workers 
D)  The infant- industry argument

Question 10

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt.
-In the figure above, the tariff the domestic production of shirts in the United States by
Per year.

Accepted Answer

A)  increases; 4 million 
B)  decreases; 16 million 
C)  increases; 8 million 
D)  decreases; 8 million 
A)  increases; 4 million 
B)  decreases; 16 million 
C)  increases; 8 million 
D)  decreases; 8 million

Question 11

The argument that protection _.

Accepted Answer

A)  is necessary for infant industries is true 
B)  saves jobs is flawed 
C)  allows us to compete with cheap foreign wages is true 
D)  penalizes poor environmental standards is true 
A)  is necessary for infant industries is true 
B)  saves jobs is flawed 
C)  allows us to compete with cheap foreign wages is true 
D)  penalizes poor environmental standards is true

Question 12

Compared to the situation before international trade, after the United States exports a good production in the United States and consumption in the United States .

Accepted Answer

A)  increases; increases 
B)  decreases; increases 
C)  increases; decreases 
D)  decreases; decreases 
A)  increases; increases 
B)  decreases; increases 
C)  increases; decreases 
D)  decreases; decreases

Question 13

How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

Accepted Answer

A quota raises the price of the good bec

Question 14

Average tariff levels in the United States in the last decade are

Accepted Answer

A)  above the average since 1930. 
B)  zero, as there are no longer any tariffs in the United States. 
C)  positive, but below the average since 1930. 
D)  about equal to the average since 1930. 
A)  above the average since 1930. 
B)  zero, as there are no longer any tariffs in the United States. 
C)  positive, but below the average since 1930. 
D)  about equal to the average since 1930.

Question 15

An assumption behind the infant- industry argument for tariff protection is that

Accepted Answer

A)  foreign competitors are selling output below average cost. 
B)  the market needs additional competition to satisfy consumer demand. 
C)  the domestic industry will eventually gain a comparative advantage in producing the good. 
D)  the domestic industry will be facing an upward adjustment in its average cost. 
A)  foreign competitors are selling output below average cost. 
B)  the market needs additional competition to satisfy consumer demand. 
C)  the domestic industry will eventually gain a comparative advantage in producing the good. 
D)  the domestic industry will be facing an upward adjustment in its average cost.

Question 16

Which of the following statements is true?

Accepted Answer

A)  A subsidy to an infant industry is a more efficient way to protect it from foreign competition than a tariff on the competing foreign goods. 
B)  The infant- industry argument is valid only if the benefits of learning- by- doing in the infant industry spill over to other parts of the economy. 
C)  Both statements are true. 
D)  Neither of the statements is true. 
A)  A subsidy to an infant industry is a more efficient way to protect it from foreign competition than a tariff on the competing foreign goods. 
B)  The infant- industry argument is valid only if the benefits of learning- by- doing in the infant industry spill over to other parts of the economy. 
C)  Both statements are true. 
D)  Neither of the statements is true.

Question 17

Which of the following is correct?

Accepted Answer

A)  Both exports and imports include goods and neither includes services. 
B)  Both imports and exports include goods and services. 
C)  Imports includes only goods but exports includes both goods and services. 
D)  Imports includes both goods and services but exports includes only goods. 
A)  Both exports and imports include goods and neither includes services. 
B)  Both imports and exports include goods and services. 
C)  Imports includes only goods but exports includes both goods and services. 
D)  Imports includes both goods and services but exports includes only goods.

Question 18

Tariffs and quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good.

Accepted Answer

A) True 
 B)False

Question 19

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt.
-In the figure above, the tariff U.S. imports of shirts by million shirts per year.

Accepted Answer

A)  increases; 4 
B)  decreases; 16 
C)  increases; 8 
D)  decreases; 8 
A)  increases; 4 
B)  decreases; 16 
C)  increases; 8 
D)  decreases; 8

Question 20

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

Accepted Answer

A) True 
 B)False

A key difference between tariffs and quotas is that

Comparative advantage implies that a country will

The goods and services that a country sells to people in other countries are called its

Of the groups listed below, which is most likely to lobby for protection?

Over the past 70 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

A tariff is a tax that is imposed by the _ country when an _ good crosses its international boundary.

Which of the following is a valid reason for protecting an industry?

Which of the following best describes the history of tariffs in the United States over the past 70 years?

The argument that protection _.

Compared to the situation before international trade, after the United States exports a good production in the United States and consumption in the United States .

How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

Average tariff levels in the United States in the last decade are

An assumption behind the infant- industry argument for tariff protection is that

Which of the following statements is true?

Which of the following is correct?

Tariffs and quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good.

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

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

A key difference between tariffs and quotas is that

Comparative advantage implies that a country will

The goods and services that a country sells to people in other countries are called its

Of the groups listed below, which is most likely to lobby for protection?

Over the past 70 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

A tariff is a tax that is imposed by the _ country when an _ good crosses its international boundary.

Which of the following is a valid reason for protecting an industry?

Which of the following best describes the history of tariffs in the United States over the past 70 years?

The argument that protection _.

Compared to the situation before international trade, after the United States exports a good production in the United States and consumption in the United States .

How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

Average tariff levels in the United States in the last decade are

An assumption behind the infant- industry argument for tariff protection is that

Which of the following statements is true?

Which of the following is correct?

Tariffs and quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good.

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

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