Question 1

A tariff is

Accepted Answer

A)  a licensing regulation that limits imports. 
B)  a tax on an exported good. 
C)  an agreement to restrict the volume of exports. 
D)  a tax on an imported good. 
A)  a licensing regulation that limits imports. 
B)  a tax on an exported good. 
C)  an agreement to restrict the volume of exports. 
D)  a tax on an imported good. D

Question 2

The infant industry argument is based on the idea of

Accepted Answer

A)  absolute productivity advantage. 
B)  dynamic comparative advantage. 
C)  Ggobal monopoly. 
D)  countervailing duties. 
A)  absolute productivity advantage. 
B)  dynamic comparative advantage. 
C)  Ggobal monopoly. 
D)  countervailing duties. B

Question 3

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In the figure above, with international trade_________ million shirts per year are produced in the United States.

Accepted Answer

A)  32 
B)  48 
C)  20 
D)  16 
A)  32 
B)  48 
C)  20 
D)  16 D

Question 4

The United States imposes a tariff on foreign limes. How does the tariff affect the U.S. price of a lime and the production of limes in the United States?

Accepted Answer

The tariff raises the price of

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

Question 6

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, the United States_________ helicopters per year.

Accepted Answer

A)  exports 480 
B)  imports 240 
C)  exports 720 
D)  imports 480 
A)  exports 480 
B)  imports 240 
C)  exports 720 
D)  imports 480

Question 7

When a rich nation buys a product made in a poor nation, in the poor nation the demand for labor_________ and the wage rate_________ .

Accepted Answer

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

Question 8

A tariff will benefit

Accepted Answer

A)  foreign producers by allowing them to sell at a higher price in markets with tariffs. 
B)  domestic producers by maintaining a higher than free-trade price. 
C)  consumers who are able to better afford domestically produced goods. 
D)  All of the above answers are correct. 
A)  foreign producers by allowing them to sell at a higher price in markets with tariffs. 
B)  domestic producers by maintaining a higher than free-trade price. 
C)  consumers who are able to better afford domestically produced goods. 
D)  All of the above answers are correct.

Question 9

The fundamental force that drives international trade is:

Accepted Answer

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

Question 10

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

Accepted Answer

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

Question 11

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In the figure above, with international trade Americans buy __________million shirts per year.

Accepted Answer

A)  48 
B)  16 
C)  24 
D)  32 
A)  48 
B)  16 
C)  24 
D)  32

Question 12

During 2007, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

Accepted Answer

It would be foolish for the United State

Question 13

The argument that protection _________.

Accepted Answer

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

Question 14

A tariff is

Accepted Answer

A)  a government imposed limit on the amount of a good that can be exported from a nation. 
B)  an agreement between governments to limit exports from a nation. 
C)  a tax on a good imported into a nation. 
D)  a government imposed barrier that sets a fixed limit on the amount of a good that can be imported into a nation. 
A)  a government imposed limit on the amount of a good that can be exported from a nation. 
B)  an agreement between governments to limit exports from a nation. 
C)  a tax on a good imported into a nation. 
D)  a government imposed barrier that sets a fixed limit on the amount of a good that can be imported into a nation.

Question 15

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

Question 16

A tariff is imposed on a good. The tariff will _________quantity supplied, _________quantity demanded, and _________price in the home country.

Accepted Answer

A)  increase; decrease; decrease 
B)  increase; remain unchanged; remain unchanged 
C)  increase; increase; increase 
D)  increase; decrease; increase 
A)  increase; decrease; decrease 
B)  increase; remain unchanged; remain unchanged 
C)  increase; increase; increase 
D)  increase; decrease; increase

Question 17

When does the domestic government gain the MOST revenue?

Accepted Answer

A)  when it negotiates a voluntary export restraint 
B)  when it imposes an import quota 
C)  when it imposes a tariff 
D)  The amount of revenue it gains is the same with a tariff and a voluntary export restraint. 
A)  when it negotiates a voluntary export restraint 
B)  when it imposes an import quota 
C)  when it imposes a tariff 
D)  The amount of revenue it gains is the same with a tariff and a voluntary export restraint.

Question 18

Consider a market that, with no international trade, 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

Accepted Answer

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

Question 19

If the United States imposes a tariff on imported steel, the tariff will

Accepted Answer

A)  decrease employment in the U.S. steel industry. 
B)  raise the U.S. price of imported steel. 
C)  decrease the U.S. production of steel. 
D)  increase the total U.S. consumption of steel. 
A)  decrease employment in the U.S. steel industry. 
B)  raise the U.S. price of imported steel. 
C)  decrease the U.S. production of steel. 
D)  increase the total U.S. consumption of steel.

Question 20

Which of the following statements concerning tariffs is NOT  true?

Accepted Answer

A)  A tariff creates revenue for the government. 
B)  A tariff leaves the price of imports unchanged. 
C)  A tariff decreases international trade. 
D)  A tariff results in a loss for for domestic consumers of the good. 
A)  A tariff creates revenue for the government. 
B)  A tariff leaves the price of imports unchanged. 
C)  A tariff decreases international trade. 
D)  A tariff results in a loss for for domestic consumers of the good.

A tariff is

The infant industry argument is based on the idea of

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade_________ million shirts per year are produced in the United States.

The United States imposes a tariff on foreign limes. How does the tariff affect the U.S. price of a lime and the production of limes in the United States?

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

When a rich nation buys a product made in a poor nation, in the poor nation the demand for labor_ and the wage rate_ .

A tariff will benefit

The fundamental force that drives international trade is:

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

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade Americans buy __________million shirts per year.

During 2007, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

The argument that protection _________.

A tariff is

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.

A tariff is imposed on a good. The tariff will _____quantity supplied, _quantity demanded, and _____price in the home country.

When does the domestic government gain the MOST revenue?

Consider a market that, with no international trade, 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

If the United States imposes a tariff on imported steel, the tariff will

Which of the following statements concerning tariffs is NOT true?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Review

Filters

Exam 15: International Trade Policy

A tariff is

The infant industry argument is based on the idea of

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade_________ million shirts per year are produced in the United States.

The United States imposes a tariff on foreign limes. How does the tariff affect the U.S. price of a lime and the production of limes in the United States?

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

When a rich nation buys a product made in a poor nation, in the poor nation the demand for labor_________ and the wage rate_________ .

A tariff will benefit

The fundamental force that drives international trade is:

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

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade Americans buy __________million shirts per year.

During 2007, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

The argument that protection _________.

A tariff is

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.

A tariff is imposed on a good. The tariff will _________quantity supplied, _________quantity demanded, and _________price in the home country.

When does the domestic government gain the MOST revenue?

Consider a market that, with no international trade, 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

If the United States imposes a tariff on imported steel, the tariff will

Which of the following statements concerning tariffs is NOT true?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Review

Filters

When a rich nation buys a product made in a poor nation, in the poor nation the demand for labor_ and the wage rate_ .

A tariff is imposed on a good. The tariff will _____quantity supplied, _quantity demanded, and _____price in the home country.