Question 1

The reason that average labor costs are higher in the United States than in Haiti is that

Accepted Answer

A)  Haitian workers do not have union representation. 
B)  Haitian workers have a comparative advantage. 
C)  U.S. workers have a comparative advantage. 
D)  workers are more productive in the United States. 
A)  Haitian workers do not have union representation. 
B)  Haitian workers have a comparative advantage. 
C)  U.S. workers have a comparative advantage. 
D)  workers are more productive in the United States.

Question 2

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

Accepted Answer

A)  about equal to 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)  above the average since 1930. 
A)  about equal to 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)  above the average since 1930.

Question 3

The Smoot-Hawley Act

Accepted Answer

A)  made most tariffs illegal. 
B)  recognized Congressʹs right to deny trade authorization powers to the President. 
C)  gave the President the right to broker trade deals with other nations. 
D)  greatly raised tariffs. 
A)  made most tariffs illegal. 
B)  recognized Congressʹs right to deny trade authorization powers to the President. 
C)  gave the President the right to broker trade deals with other nations. 
D)  greatly raised tariffs.

Question 4

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

Accepted Answer

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

Question 5

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

Question 6

An import quota directly restricts_________ and are designed to protect domestic _________.

Accepted Answer

A)  imports; producers 
B)  exports; consumers 
C)  imports; consumers 
D)  exports; producers 
A)  imports; producers 
B)  exports; consumers 
C)  imports; consumers 
D)  exports; producers

Question 7

The European Union imports bananas from Latin America as well as imports from Europeʹs former colonies in the African, Caribbean and Pacific ACP) group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

Accepted Answer

A)  The gain from free trade is decreased because of banana tariffs 
B)  European consumers are better off with tariff than with free trade 
C)  For European consumers, the price of ACP bananas is lower than Latin American bananas 
D)  The price European consumers pay for bananas is higher with the tariff than the free trade price 
A)  The gain from free trade is decreased because of banana tariffs 
B)  European consumers are better off with tariff than with free trade 
C)  For European consumers, the price of ACP bananas is lower than Latin American bananas 
D)  The price European consumers pay for bananas is higher with the tariff than the free trade price

Question 8

Which of the following statements about U.S. international trade in 2009 is correct?

Accepted Answer

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

Question 9

ʺBecause 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.ʺ Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect. Th

Question 10

The Smoot-Hawley Act introduced

Accepted Answer

A)  opportunities for expanding U.S. foreign trade. 
B)  a framework promoting international free trade. 
C)  revenue tariffs as a major source of U.S. government revenues. 
D)  the highest tariffs set by the United States in the last 80 years. 
A)  opportunities for expanding U.S. foreign trade. 
B)  a framework promoting international free trade. 
C)  revenue tariffs as a major source of U.S. government revenues. 
D)  the highest tariffs set by the United States in the last 80 years.

Question 11

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

Question 12

Import quotas

Accepted Answer

A)  are the same as tariffs. 
B)  are not used by the United States. 
C)  set the maximum number of units of a good that can be imported. 
D)  set the minimum percentage of the value of a product that must consist of imported components. 
A)  are the same as tariffs. 
B)  are not used by the United States. 
C)  set the maximum number of units of a good that can be imported. 
D)  set the minimum percentage of the value of a product that must consist of imported components.

Question 13

During 2005-2006 Europe imported more than $70 million worth of US long -grain rice. In 2006, the European Union threatened to restrict imports of long -grain rice because traces of genetically modified rice were found mixed in to commercial supplies. What would NOT be an effect in the European rice market if U.S. imports were banned?

Accepted Answer

A)  The price of long-grain rice would increase 
B)  The quantity of long-grain rice imports would decrease 
C)  There would be a increase in long-grain rice consumption 
D)  There would be an increase European in rice production 
A)  The price of long-grain rice would increase 
B)  The quantity of long-grain rice imports would decrease 
C)  There would be a increase in long-grain rice consumption 
D)  There would be an increase European in rice production

Question 14

If a country imposes a tariff _________on an imported good, the tariff the price in the importing country and  _________the quantity of imports.

Accepted Answer

A)  raises; decreases 
B)  raises; does not change 
C)  raises; increases 
D)  lowers; does not change 
A)  raises; decreases 
B)  raises; does not change 
C)  raises; increases 
D)  lowers; does not change

Question 15

Who benefits from imports?

Accepted Answer

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

Question 16

Which of the following reasons explains why rich countries persistently restrict textile imports from poor countries?

Accepted Answer

A)  The trade restrictions make workers in poor countries better off. 
B)  The trade restrictions benefit an organized visible special interest in rich countries. 
C)  The trade restrictions make textile consumers better off. 
D)  Rich countries have a strong need for the revenue from these trade restrictions. 
A)  The trade restrictions make workers in poor countries better off. 
B)  The trade restrictions benefit an organized visible special interest in rich countries. 
C)  The trade restrictions make textile consumers better off. 
D)  Rich countries have a strong need for the revenue from these trade restrictions.

Question 17

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

Question 18

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Accepted Answer

A)  The cost of saving domestic jobs through protectionism may be high. 
B)  Imports create jobs in this country for people selling and servicing imported items. 
C)  Protectionism eliminates domestic jobs in export industries. 
D)  all of the above 
A)  The cost of saving domestic jobs through protectionism may be high. 
B)  Imports create jobs in this country for people selling and servicing imported items. 
C)  Protectionism eliminates domestic jobs in export industries. 
D)  all of the above

Question 19

Who benefits from an import quota on a good?

Accepted Answer

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

Question 20

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

Accepted Answer

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

The reason that average labor costs are higher in the United States than in Haiti is that

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

The Smoot-Hawley Act

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

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

An import quota directly restricts_ and are designed to protect domestic _.

The European Union imports bananas from Latin America as well as imports from Europeʹs former colonies in the African, Caribbean and Pacific ACP) group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

Which of the following statements about U.S. international trade in 2009 is correct?

ʺBecause 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.ʺ Is the previous statement correct or incorrect?

The Smoot-Hawley Act introduced

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 _.

Import quotas

If a country imposes a tariff _on an imported good, the tariff the price in the importing country and _the quantity of imports.

Who benefits from imports?

Which of the following reasons explains why rich countries persistently restrict textile imports from poor countries?

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Who benefits from an import quota on a good?

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

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

The reason that average labor costs are higher in the United States than in Haiti is that

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

The Smoot-Hawley Act

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

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

An import quota directly restricts_________ and are designed to protect domestic _________.

The European Union imports bananas from Latin America as well as imports from Europeʹs former colonies in the African, Caribbean and Pacific ACP) group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

Which of the following statements about U.S. international trade in 2009 is correct?

ʺBecause 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.ʺ Is the previous statement correct or incorrect?

The Smoot-Hawley Act introduced

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 _________.

Import quotas

If a country imposes a tariff _________on an imported good, the tariff the price in the importing country and _________the quantity of imports.

Who benefits from imports?

Which of the following reasons explains why rich countries persistently restrict textile imports from poor countries?

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Who benefits from an import quota on a good?

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

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

An import quota directly restricts_ and are designed to protect domestic _.

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 _.

If a country imposes a tariff _on an imported good, the tariff the price in the importing country and _the quantity of imports.