Question 1

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

Accepted Answer

A)  comparative advantage. 
B)  that the government of Pacifica needs to increase its revenue. 
C)  lobbying from banana farmers in Pacifica. 
D)  Both answers A and B are correct. 
A)  comparative advantage. 
B)  that the government of Pacifica needs to increase its revenue. 
C)  lobbying from banana farmers in Pacifica. 
D)  Both answers A and B are correct.

Question 2

Discuss reasons why we see trade restrictions. Are any of these reasons valid?

Accepted Answer

There are several reasons advanced to re

Question 3

Most economists would agree that ʺsaving jobsʺ is a valid reason for restricting trade.

Accepted Answer

A) True 
 B)False

Question 4

Prior to international trade, if country A has a lower price of good X than does country B, then we know definitely that

Accepted Answer

A)  country B has a comparative advantage in the production of good X. 
B)  country A has a comparative advantage in the production of good X. 
C)  country A has an absolute advantage in the production of good X. 
D)  country B has an absolute advantage in the production of good X. 
A)  country B has a comparative advantage in the production of good X. 
B)  country A has a comparative advantage in the production of good X. 
C)  country A has an absolute advantage in the production of good X. 
D)  country B has an absolute advantage in the production of good X.

Question 5

Based on the table below, at what world price would the country export?
$$\begin{array} { | l | l | l | } 
\hline \text { Price } & \text { QD emanded } & \text { QSupplied } \
\hline 2 & 100 & 70 \
\hline 4 & 95 & 75 \
\hline 6 & 90 & 80 \
\hline 8 & 85 & 85 \
\hline 10 & 80 & 90 \
\hline 12 & 75 & 95 \
\hline
\end{array}$$

Accepted Answer

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

Question 6

Increasing a tariff will_________ the domestic quantity consumed of the good, while _________the domestic production of the good.

Accepted Answer

A)  decrease; decreasing 
B)  decrease; increasing 
C)  increase; increasing 
D)  increase; decreasing 
A)  decrease; decreasing 
B)  decrease; increasing 
C)  increase; increasing 
D)  increase; decreasing

Question 7

Since 1930, tariff levels in the United States have

Accepted Answer

A)  increased during expansions. 
B)  decreased during recessions. 
C)  generally declined. 
D)  steadily risen. 
A)  increased during expansions. 
B)  decreased during recessions. 
C)  generally declined. 
D)  steadily risen.

Question 8

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 the United States _________million shirts per year.

Accepted Answer

A)  imports 48 
B)  exports 16 
C)  exports 32 
D)  imports 32 
A)  imports 48 
B)  exports 16 
C)  exports 32 
D)  imports 32

Question 9

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is _________the world price

Accepted Answer

A)  greater than 
B)  less than 
C)  not comparable to 
D)  equal to 
A)  greater than 
B)  less than 
C)  not comparable to 
D)  equal to

Question 10

The winners from a tariff on imports are

Accepted Answer

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

Question 11

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

Accepted Answer

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

Question 12

The United States imports cars from Japan. If the United States imposes a tariff on cars imported from Japan, American

Accepted Answer

A)  consumers will lose and American producers will gain. 
B)  tariff revenue will equal the loss inflicted on American consumers. 
C)  car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers. 
D)  consumers will lose and Japanese producers will gain. 
A)  consumers will lose and American producers will gain. 
B)  tariff revenue will equal the loss inflicted on American consumers. 
C)  car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers. 
D)  consumers will lose and Japanese producers will gain.

Question 13

What are the effects of a tariff?

Accepted Answer

A tariff is a tax on goods that are impo

Question 14

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

Question 15

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers from cheap foreign labor?
I. Low-wage foreigners are just as productive as U.S. workers.
II. U.S. workers have a comparative advantage in low -wage jobs.

Accepted Answer

A)  I and II 
B)  I only 
C)  II only 
D)  Neither I nor II is correct. 
A)  I and II 
B)  I only 
C)  II only 
D)  Neither I nor II is correct.

Question 16

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

Accepted Answer

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

Question 17

Which of the following statements is true?

Accepted Answer

A)  International trade leads to job losses in both import competing industries and exporting industries. 
B)  International trade with reach industrial countries forces people in the developing countries to work for lower wages. 
C)  International trade raises wages in developing countries. 
D)  Unlike other types of international trade, offshoring does not bring any gains from trade. 
A)  International trade leads to job losses in both import competing industries and exporting industries. 
B)  International trade with reach industrial countries forces people in the developing countries to work for lower wages. 
C)  International trade raises wages in developing countries. 
D)  Unlike other types of international trade, offshoring does not bring any gains from trade.

Question 18

Tariffs and import quotas differ in that

Accepted Answer

A)  one is imposed by the government, while the other is imposed by the private sector. 
B)  one is a form of trade restriction, while the other is not. 
C)  one is legal, while the other is not. 
D)  one is a tax, while the other is a limit. 
A)  one is imposed by the government, while the other is imposed by the private sector. 
B)  one is a form of trade restriction, while the other is not. 
C)  one is legal, while the other is not. 
D)  one is a tax, while the other is a limit.

Question 19

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 20

The idea of dynamic comparative advantage is the basis for which of the following arguments for protection from foreign competition?

Accepted Answer

A)  the cheap foreign labor argument 
B)  the saves jobs argument 
C)  the infant-industry argument 
D)  the dumping argument 
A)  the cheap foreign labor argument 
B)  the saves jobs argument 
C)  the infant-industry argument 
D)  the dumping argument

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

Discuss reasons why we see trade restrictions. Are any of these reasons valid?

Most economists would agree that ʺsaving jobsʺ is a valid reason for restricting trade.

Prior to international trade, if country A has a lower price of good X than does country B, then we know definitely that

Based on the table below, at what world price would the country export? Price QD emanded QSupplied 2 100 70 4 95 75 6 90 80 8 85 85 10 80 90 12 75 95

Increasing a tariff will_ the domestic quantity consumed of the good, while _the domestic production of the good.

Since 1930, tariff levels in the United States have

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 the United States _________million shirts per year.

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is _________the world price

The winners from a tariff on imports are

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

The United States imports cars from Japan. If the United States imposes a tariff on cars imported from Japan, American

What are the effects of a tariff?

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers from cheap foreign labor? I. Low-wage foreigners are just as productive as U.S. workers. II. U.S. workers have a comparative advantage in low -wage jobs.

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

Which of the following statements is true?

Tariffs and import quotas differ in that

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

The idea of dynamic comparative advantage is the basis for which of the following arguments for protection from foreign competition?

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

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

Discuss reasons why we see trade restrictions. Are any of these reasons valid?

Most economists would agree that ʺsaving jobsʺ is a valid reason for restricting trade.

Prior to international trade, if country A has a lower price of good X than does country B, then we know definitely that

Based on the table below, at what world price would the country export? Price QD emanded QSupplied 2 100 70 4 95 75 6 90 80 8 85 85 10 80 90 12 75 95

Increasing a tariff will_________ the domestic quantity consumed of the good, while _________the domestic production of the good.

Since 1930, tariff levels in the United States have

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 the United States _________million shirts per year.

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is _________the world price

The winners from a tariff on imports are

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

The United States imports cars from Japan. If the United States imposes a tariff on cars imported from Japan, American

What are the effects of a tariff?

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers from cheap foreign labor? I. Low-wage foreigners are just as productive as U.S. workers. II. U.S. workers have a comparative advantage in low -wage jobs.

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

Which of the following statements is true?

Tariffs and import quotas differ in that

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

The idea of dynamic comparative advantage is the basis for which of the following arguments for protection from foreign competition?

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

Increasing a tariff will_ the domestic quantity consumed of the good, while _the domestic production of the good.