Question 1

In developing countries, there is more reliance on as opposed to for government revenue.

Accepted Answer

A)  quotas; tariffs 
B)  tariffs; quotas 
C)  tariffs; tax collection 
D)  tax collection; tariffs 
A)  quotas; tariffs 
B)  tariffs; quotas 
C)  tariffs; tax collection 
D)  tax collection; tariffs

Question 2

Consider a market that is initially in equilibrium with quantity demanded equal to quantity supplied at a price of $20. If the world price of the good is $10 and the country opens up to international trade then in this market we would expect

Accepted Answer

A)  imports will increase, price will decrease, and the supply curve will shift to the left 
B)  exports will increase, price will be unchanged, and quantity supplied will increase 
C)  imports will increase, price will fall, and quantity supplied will fall 
D)  quantity demanded will decrease, quantity supplied will decrease, and price will decrease 
A)  imports will increase, price will decrease, and the supply curve will shift to the left 
B)  exports will increase, price will be unchanged, and quantity supplied will increase 
C)  imports will increase, price will fall, and quantity supplied will fall 
D)  quantity demanded will decrease, quantity supplied will decrease, and price will decrease

Question 3

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

Accepted Answer

A)  Belize coffee consumers would gain from trade. 
B)  Belize coffee producers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade. 
A)  Belize coffee consumers would gain from trade. 
B)  Belize coffee producers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade.

Question 4

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know that:

Accepted Answer

A)  Brazilian coffee workers "gain" from this trade 
B)  Brazilian producers "lose" from this trade 
C)  Brazilian car manufacturers "lose" from this trade 
D)  Brazilian consumers "gain" from this trade 
A)  Brazilian coffee workers "gain" from this trade 
B)  Brazilian producers "lose" from this trade 
C)  Brazilian car manufacturers "lose" from this trade 
D)  Brazilian consumers "gain" from this trade

Question 5

Based on the table below, at what world price would the country export?

Accepted Answer

A)  a price below $8 
B)  it is impossible to say 
C)  a price above $8 
D)  at only $8 
A)  a price below $8 
B)  it is impossible to say 
C)  a price above $8 
D)  at only $8

Question 6

Which of the following is a TRUE statement?

Accepted Answer

A)  Free trade harms domestic producers of goods that face import competition. 
B)  Only exporters benefit from trade. 
C)  Everyone benefits from free trade. 
D)  All producers benefit from trade and but not all consumers benefit. 
A)  Free trade harms domestic producers of goods that face import competition. 
B)  Only exporters benefit from trade. 
C)  Everyone benefits from free trade. 
D)  All producers benefit from trade and but not all consumers benefit.

Question 7

When a group lobbies for the prevention of free trade, the most likely reason is

Accepted Answer

A)  preservation of the environment. 
B)  defense against expensive domestic labor. 
C)  rent seeking. 
D)  tariff revenue. 
A)  preservation of the environment. 
B)  defense against expensive domestic labor. 
C)  rent seeking. 
D)  tariff revenue.

Question 8

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

Accepted Answer

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

Question 9

Who benefits from an import quota on a good?

Accepted Answer

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

Question 10

"Because the United States is the largest economy in the world and can produce anything it needs domestically, there are no gains from trade for the United States." Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect. Th

Question 11

A difference between a quota and a tariff is that with a quota the

Accepted Answer

A)  exporting government collects an extra gain in the form of revenue. 
B)  importing government collects an extra gain in the form of revenue. 
C)  person who has the right to import the good captures an extra gain. 
D)  domestic consumers are not harmed. 
A)  exporting government collects an extra gain in the form of revenue. 
B)  importing government collects an extra gain in the form of revenue. 
C)  person who has the right to import the good captures an extra gain. 
D)  domestic consumers are not harmed.

Question 12

An import quota protects domestic producers by

Accepted Answer

A)  increasing the total supply of the product. 
B)  encouraging competition among domestic producers. 
C)  placing a prohibitive tax on imports. 
D)  setting a limit on the amount of imports. 
A)  increasing the total supply of the product. 
B)  encouraging competition among domestic producers. 
C)  placing a prohibitive tax on imports. 
D)  setting a limit on the amount of imports.

Question 13

Which of the following is an explanation for the existence of trade restrictions?

Accepted Answer

A)  Tariffs generate revenue for the government. 
B)  rent seeking 
C)  inefficient quotas 
D)  Both answers A and B are key explanations. 
A)  Tariffs generate revenue for the government. 
B)  rent seeking 
C)  inefficient quotas 
D)  Both answers A and B are key explanations.

Question 14

The winners from a tariff on imports are

Accepted Answer

A)  consumers 
B)  producers 
C)  producers and government 
D)  consumers, producers, and government 
A)  consumers 
B)  producers 
C)  producers and government 
D)  consumers, producers, and government

Question 15

The infant- industry argument is the only perfectly valid argument for protection.

Accepted Answer

A) True 
 B)False

Question 16

Import quotas

Accepted Answer

A)  are a tax on an imported good. 
B)  encourage freer trade. 
C)  set the minimum percentage of the value of a good that can consist of imported components. 
D)  set the number of units of a good that can be imported. 
A)  are a tax on an imported good. 
B)  encourage freer trade. 
C)  set the minimum percentage of the value of a good that can consist of imported components. 
D)  set the number of units of a good that can be imported.

Question 17

The goods and services that a country buys from other countries are called its

Accepted Answer

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

Question 18

A key difference between a quota and a tariff is that

Accepted Answer

A)  a tariff has a larger effect on quantity than on price. 
B)  a quota has a larger effect on quantity than on price. 
C)  the government of the importing country gains revenue from a tariff, but the price gap caused by a quota benefits domestic importers. 
D)  All of the above answers are correct. 
A)  a tariff has a larger effect on quantity than on price. 
B)  a quota has a larger effect on quantity than on price. 
C)  the government of the importing country gains revenue from a tariff, but the price gap caused by a quota benefits domestic importers. 
D)  All of the above answers are correct.

Question 19

Which of the following statements about U.S. international trade in 2008 is correct?

Accepted Answer

A)  The United States was the world's largest trader. 
B)  The United States imported only goods. 
C)  The value of U.S. exports was about 33 percent of the value of total U.S. production 
D)  The value of U.S. exports exceeded the value of U.S. imports 
A)  The United States was the world's largest trader. 
B)  The United States imported only goods. 
C)  The value of U.S. exports was about 33 percent of the value of total U.S. production 
D)  The value of U.S. exports exceeded the value of U.S. imports

Question 20

What are the effects of a tariff?

Accepted Answer

A tariff is a tax on goods that are impo

In developing countries, there is more reliance on as opposed to for government revenue.

Consider a market that is initially in equilibrium with quantity demanded equal to quantity supplied at a price of $20. If the world price of the good is $10 and the country opens up to international trade then in this market we would expect

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know that:

Based on the table below, at what world price would the country export?

Which of the following is a TRUE statement?

When a group lobbies for the prevention of free trade, the most likely reason is

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

Who benefits from an import quota on a good?

"Because the United States is the largest economy in the world and can produce anything it needs domestically, there are no gains from trade for the United States." Is the previous statement correct or incorrect?

A difference between a quota and a tariff is that with a quota the

An import quota protects domestic producers by

Which of the following is an explanation for the existence of trade restrictions?

The winners from a tariff on imports are

The infant- industry argument is the only perfectly valid argument for protection.

Import quotas

The goods and services that a country buys from other countries are called its

A key difference between a quota and a tariff is that

Which of the following statements about U.S. international trade in 2008 is correct?

What are the effects of a tariff?

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

In developing countries, there is more reliance on as opposed to for government revenue.

Consider a market that is initially in equilibrium with quantity demanded equal to quantity supplied at a price of $20. If the world price of the good is $10 and the country opens up to international trade then in this market we would expect

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know that:

Based on the table below, at what world price would the country export?

Which of the following is a TRUE statement?

When a group lobbies for the prevention of free trade, the most likely reason is

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

Who benefits from an import quota on a good?

"Because the United States is the largest economy in the world and can produce anything it needs domestically, there are no gains from trade for the United States." Is the previous statement correct or incorrect?

A difference between a quota and a tariff is that with a quota the

An import quota protects domestic producers by

Which of the following is an explanation for the existence of trade restrictions?

The winners from a tariff on imports are

The infant- industry argument is the only perfectly valid argument for protection.

Import quotas

The goods and services that a country buys from other countries are called its

A key difference between a quota and a tariff is that

Which of the following statements about U.S. international trade in 2008 is correct?

What are the effects of a tariff?

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