Question 1

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed by number of people.

Accepted Answer

A)  large; small 
B)  small; large 
C)  small; small 
D)  large; large 
A)  large; small 
B)  small; large 
C)  small; small 
D)  large; large

Question 2

Tariffs and import quotas both result in

Accepted Answer

A)  lower levels of imports. 
B)  the domestic government gaining revenue. 
C)  higher levels of domestic consumption. 
D)  lower levels of domestic production. 
A)  lower levels of imports. 
B)  the domestic government gaining revenue. 
C)  higher levels of domestic consumption. 
D)  lower levels of domestic production.

Question 3

A difference between a quota and a tariff is that

Accepted Answer

A)  a tariff generates a higher price than does a quota. 
B)  a quota increases profits of domestic producers more than does a tariff. 
C)  a tariff generates a greater reduction in exports than does a quota. 
D)  the government collects revenues from a tariff but does not collect revenues from a quota. 
A)  a tariff generates a higher price than does a quota. 
B)  a quota increases profits of domestic producers more than does a tariff. 
C)  a tariff generates a greater reduction in exports than does a quota. 
D)  the government collects revenues from a tariff but does not collect revenues from a quota.

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 producers ʺloseʺ from this trade 
B)  Brazilian coffee workers ʺgainʺ from this trade 
C)  Brazilian consumers ʺgainʺ from this trade 
D)  Brazilian car manufacturers ʺloseʺ from this trade 
A)  Brazilian producers ʺloseʺ from this trade 
B)  Brazilian coffee workers ʺgainʺ from this trade 
C)  Brazilian consumers ʺgainʺ from this trade 
D)  Brazilian car manufacturers ʺloseʺ from this trade

Question 5

Currently, the United States has a quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S. consumption and U.S. production of sugar?

Accepted Answer

If the quota is removed, the p

Question 6

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. Based on this, we know definitively that:

Accepted Answer

A)  The US has comparative advantage in coffee production 
B)  The US has absolute advantage in coffee production 
C)  The Africa, Asia, and Latin America has comparative advantage in coffee production 
D)  The Africa, Asia, and Latin America has absolute advantage in coffee production 
A)  The US has comparative advantage in coffee production 
B)  The US has absolute advantage in coffee production 
C)  The Africa, Asia, and Latin America has comparative advantage in coffee production 
D)  The Africa, Asia, and Latin America has absolute advantage in coffee production

Question 7

The U.S.-Colombia Trade Promotion Agreement was signed on November 22, 2006, in Washington, D.C. This comprehensive trade agreement eliminated tariffs and other barriers to goods and services. Colombia will immediately eliminate tariffs on wheat, barley, peanuts, and many other products in which Columbia does not have a comparative advantage. This policy means that the price of peanuts in Columbia will become

Accepted Answer

A)  higher than the price when a tariff was in place 
B)  equal to the free trade price 
C)  lower than the free trade price 
D)  higher than the free trade price 
A)  higher than the price when a tariff was in place 
B)  equal to the free trade price 
C)  lower than the free trade price 
D)  higher than the free trade price

Question 8

Usually the removal of trade barriers affecting a particular good benefits _________people domestically, each of whom gains a _________.

Accepted Answer

A)  many; lot 
B)  many; little 
C)  a few; little 
D)  a few; lot 
A)  many; lot 
B)  many; little 
C)  a few; little 
D)  a few; lot

Question 9

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

Accepted Answer

A)  export 50 units. 
B)  export 200 units. 
C)  import 50 units. 
D)  import 150 units. 
A)  export 50 units. 
B)  export 200 units. 
C)  import 50 units. 
D)  import 150 units.

Question 10

How does the United States attempt to compensate losers from lower trade restrictions?

Accepted Answer

The U.S. government attempts to compensa

Question 11

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

Question 12

A tariff hurts

Accepted Answer

A)  domestic producers who canʹt compete with cheaper imports. 
B)  consumers who will pay more for the imported good. 
C)  the government by decreasing its revenue. 
D)  All of the above answers are correct. 
A)  domestic producers who canʹt compete with cheaper imports. 
B)  consumers who will pay more for the imported good. 
C)  the government by decreasing its revenue. 
D)  All of the above answers are correct.

Question 13

A country specializes in the production of goods for which it has a comparative advantage. We find that

Accepted Answer

A)  producers win, consumers lose, but overall the gains exceed the losses 
B)  all producers win 
C)  all consumers win 
D)  some producers and consumers win, some lose, but overall the gains exceed the losses 
A)  producers win, consumers lose, but overall the gains exceed the losses 
B)  all producers win 
C)  all consumers win 
D)  some producers and consumers win, some lose, but overall the gains exceed the losses

Question 14

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Accepted Answer

A)  6 percent. 
B)  100 percent. 
C)  zero. 
D)  20 percent. 
A)  6 percent. 
B)  100 percent. 
C)  zero. 
D)  20 percent.

Question 15

Which of the following are valid reasons advanced by almost all economists? Protection

Accepted Answer

A)  prevents rich countries from exploiting poorer countries. 
B)  saves jobs. 
C)  is a good way for governments in developed nations to raise revenue. 
D)  Economists would not support any of the above reasons. 
A)  prevents rich countries from exploiting poorer countries. 
B)  saves jobs. 
C)  is a good way for governments in developed nations to raise revenue. 
D)  Economists would not support any of the above reasons.

Question 16

Voluntary export restraints VERs)

Accepted Answer

A)  raise the prices paid by domestic consumers. 
B)  do not protect domestic producers. 
C)  raise revenue for the governments involved. 
D)  Both answers B and C are correct. 
A)  raise the prices paid by domestic consumers. 
B)  do not protect domestic producers. 
C)  raise revenue for the governments involved. 
D)  Both answers B and C are correct.

Question 17

How does a tariff affect the governmentʹs revenue? How does a quota affect the governmentʹs revenue?

Accepted Answer

A tariff is a tax on an imported good. L

Question 18

Comparative advantage implies that a country will

Accepted Answer

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

Question 19

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

Question 20

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

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed by number of people.

Tariffs and import quotas both result in

A difference between a quota and a tariff is that

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:

Currently, the United States has a quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S. consumption and U.S. production of sugar?

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. Based on this, we know definitively that:

Usually the removal of trade barriers affecting a particular good benefits _people domestically, each of whom gains a _.

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

How does the United States attempt to compensate losers from lower trade restrictions?

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

A tariff hurts

A country specializes in the production of goods for which it has a comparative advantage. We find that

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Which of the following are valid reasons advanced by almost all economists? Protection

Voluntary export restraints VERs)

How does a tariff affect the governmentʹs revenue? How does a quota affect the governmentʹs revenue?

Comparative advantage implies that a country will

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_ .

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

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 gains from free trade are enjoyed by a number of people and the costs of free trade are imposed by number of people.

Tariffs and import quotas both result in

A difference between a quota and a tariff is that

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:

Currently, the United States has a quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S. consumption and U.S. production of sugar?

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. Based on this, we know definitively that:

Usually the removal of trade barriers affecting a particular good benefits _________people domestically, each of whom gains a _________.

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

How does the United States attempt to compensate losers from lower trade restrictions?

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

A tariff hurts

A country specializes in the production of goods for which it has a comparative advantage. We find that

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Which of the following are valid reasons advanced by almost all economists? Protection

Voluntary export restraints VERs)

How does a tariff affect the governmentʹs revenue? How does a quota affect the governmentʹs revenue?

Comparative advantage implies that a country will

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_________ .

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

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

Usually the removal of trade barriers affecting a particular good benefits _people domestically, each of whom gains a _.

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_ .