Question 1

A tariff on watches which are imported by Atlantis _______the price of watches in Atlantis and _______.

Accepted Answer

A) lowers; watch production in Atlantis decreases 
B) raises; watch production in Atlantis decreases 
C) lowers; imports of watches increase 
D) lowers; watch production in Atlantis increases 
E) raises; watch production in Atlantis increases 
A) lowers; watch production in Atlantis decreases 
B) raises; watch production in Atlantis decreases 
C) lowers; imports of watches increase 
D) lowers; watch production in Atlantis increases 
E) raises; watch production in Atlantis increases

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) an increase in demand. 
E) lower levels of domestic production. 
A) lower levels of imports. 
B) the domestic government gaining revenue. 
C) higher levels of domestic consumption. 
D) an increase in demand. 
E) lower levels of domestic production.

Question 3

A tariff _______ the domestic price of the good and an import quota _______ the domestic price of the good.

Accepted Answer

A) raises; lowers 
B) lowers; raises 
C) lowers; lowers 
D) does not change; does not change 
E) raises; raises 
A) raises; lowers 
B) lowers; raises 
C) lowers; lowers 
D) does not change; does not change 
E) raises; raises

Question 4

Tariffs

Accepted Answer

A) generate revenue for consumers. 
B) generate revenue for the government. 
C) lower prices for consumers. 
D) encourage domestic producers to produce less. 
E) encourage domestic consumers to buy more imports. 
A) generate revenue for consumers. 
B) generate revenue for the government. 
C) lower prices for consumers. 
D) encourage domestic producers to produce less. 
E) encourage domestic consumers to buy more imports.

Question 5

The fundamental force that drives international trade is

Accepted Answer

A) unemployment of factors of production. 
B) comparative advantage. 
C) a country's desire to increase its trade surplus. 
D) absolute advantage. 
E) cheap labour in countries like China and India. 
A) unemployment of factors of production. 
B) comparative advantage. 
C) a country's desire to increase its trade surplus. 
D) absolute advantage. 
E) cheap labour in countries like China and India.

Question 6

International trade benefits the

Accepted Answer

A) government of the exporting country. 
B) government of the importing country. 
C) exporting country but not the importing country. 
D) importing country but not the exporting country. 
E) exporting country and the importing country. 
A) government of the exporting country. 
B) government of the importing country. 
C) exporting country but not the importing country. 
D) importing country but not the exporting country. 
E) exporting country and the importing country.

Question 7

_______ occurs when a foreign firm sells its exports at a lower price than its cost of production.

Accepted Answer

A) A tariff 
B) Learning- by- doing 
C) Comparative advantage 
D) An infant industry 
E) Dumping 
A) A tariff 
B) Learning- by- doing 
C) Comparative advantage 
D) An infant industry 
E) Dumping

Question 8

A difference between a quota and a tariff is that

Accepted Answer

A) a tariff generates a greater reduction in exports than does an import quota. 
B) the government collects revenue from a tariff but does not collect revenue from an import quota. 
C) an import quota increases profits of domestic producers more than a tariff. 
D) a tariff generates a higher price than does an import quota. 
E) an import quota creates a social loss and a tariff does not. 
A) a tariff generates a greater reduction in exports than does an import quota. 
B) the government collects revenue from a tariff but does not collect revenue from an import quota. 
C) an import quota increases profits of domestic producers more than a tariff. 
D) a tariff generates a higher price than does an import quota. 
E) an import quota creates a social loss and a tariff does not.

Question 9

If Canada imposes a tariff of $1 per imported shirt, the tariff

Accepted Answer

A) creates a social loss. 
B) benefits Canadian shirt producers. 
C) decreases imports of shirts into Canada. 
D) raises the price of a shirt to Canadian consumers. 
E) all of the above 
A) creates a social loss. 
B) benefits Canadian shirt producers. 
C) decreases imports of shirts into Canada. 
D) raises the price of a shirt to Canadian consumers. 
E) all of the above

Question 10

If Canada imposes a tariff on imported cars,

Accepted Answer

A) Canada's supply curve of cars shifts rightward. 
B) Canada's demand curve for cars shifts leftward. 
C) Canada's supply curve of cars shifts leftward. 
D) Canada's demand curve for cars shifts rightward. 
E) the price in Canada rises but neither Canada's demand curve nor Canada's supply curve shifts. 
A) Canada's supply curve of cars shifts rightward. 
B) Canada's demand curve for cars shifts leftward. 
C) Canada's supply curve of cars shifts leftward. 
D) Canada's demand curve for cars shifts rightward. 
E) the price in Canada rises but neither Canada's demand curve nor Canada's supply curve shifts.

Question 11

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

Accepted Answer

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

Question 12

An import quota is

Accepted Answer

A) a restriction that specifies the maximum amount of a good that may be imported. 
B) a tariff that is a fixed percentage of the price of a good. 
C) an agreed upon price for a good to be imported at a specified future date. 
D) the same as an export subsidy. 
E) a tariff that is a fixed dollar amount per unit of a good. 
A) a restriction that specifies the maximum amount of a good that may be imported. 
B) a tariff that is a fixed percentage of the price of a good. 
C) an agreed upon price for a good to be imported at a specified future date. 
D) the same as an export subsidy. 
E) a tariff that is a fixed dollar amount per unit of a good.

Question 13

Import quotas

Accepted Answer

A) are not used by Canada. 
B) set the minimum percentage of the value of a product that must consist of imported components. 
C) benefit society. 
D) are the same as tariffs. 
E) set the maximum number of units of a good that can be imported in a given time period. 
A) are not used by Canada. 
B) set the minimum percentage of the value of a product that must consist of imported components. 
C) benefit society. 
D) are the same as tariffs. 
E) set the maximum number of units of a good that can be imported in a given time period.

Question 14

Reducing a tariff _______ the domestic production of the good and _______ the total domestic consumption of the good.

Accepted Answer

A) decreases; decreases 
B) decreases; increases 
C) increases; decreases 
D) increases; increases 
E) does not change; increases 
A) decreases; decreases 
B) decreases; increases 
C) increases; decreases 
D) increases; increases 
E) does not change; increases

Question 15

Refer to the figure below to answer the following questions.
   The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve.world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 15.3.1
-Refer to Figure 15.3.1.The Canadian government's revenue from the tariff is

Accepted Answer

A) $32 million. 
B) $128 million. 
C) $480 million. 
D) $48 million. 
E) $64 million. 
A) $32 million. 
B) $128 million. 
C) $480 million. 
D) $48 million. 
E) $64 million.

Question 16

Use the information below to answer the following questions.
Fact 15.3.2
With free trade between Australia and Canada, Australia would export beef to Canada.But Canada imposes an import quota Australian beef.
-Refer to Fact 15.3.2.Canadian gains from trade will _______and Australian gains from trade will _______.

Accepted Answer

A) increase; increase 
B) decrease; increase 
C) increase; decrease 
D) not change; not change 
E) decrease; decrease 
A) increase; increase 
B) decrease; increase 
C) increase; decrease 
D) not change; not change 
E) decrease; decrease

Question 17

In one year, Brazil exported more than 1.8 billion kilograms of coffee to the rest of the world.We can conclude that

Accepted Answer

A) Brazil's government loses from this trade. 
B) coffee producers in the rest of the world gain from this trade. 
C) Brazil's coffee producers lose from this trade. 
D) Brazil's coffee consumers lose from this trade. 
E) coffee consumers in the rest of the world lose from this trade. 
A) Brazil's government loses from this trade. 
B) coffee producers in the rest of the world gain from this trade. 
C) Brazil's coffee producers lose from this trade. 
D) Brazil's coffee consumers lose from this trade. 
E) coffee consumers in the rest of the world lose from this trade.

Question 18

Use the information below to answer the following questions.
Fact 15.3.2
With free trade between Australia and Canada, Australia would export beef to Canada.But Canada imposes an import quota Australian beef.
-Refer to Fact 15.3.2.If Canada imposes an import quota on Australian beef, the price that Canadian consumers pay for beef will _______ and the quantity of beef produced in Canada will _______.

Accepted Answer

A) not change; increase 
B) fall; decrease 
C) rise; not change 
D) not change; decrease 
E) rise; increase 
A) not change; increase 
B) fall; decrease 
C) rise; not change 
D) not change; decrease 
E) rise; increase

Question 19

An import quota is a

Accepted Answer

A) tax in an international market. 
B) market- imposed balancing factor that keeps prices of imports and exports in equilibrium. 
C) law that prevents ecologically damaging goods from being imported into a country. 
D) government- imposed restriction on the quantity of a specific good that can be imported. 
E) tariff imposed on goods that are dumped in the country. 
A) tax in an international market. 
B) market- imposed balancing factor that keeps prices of imports and exports in equilibrium. 
C) law that prevents ecologically damaging goods from being imported into a country. 
D) government- imposed restriction on the quantity of a specific good that can be imported. 
E) tariff imposed on goods that are dumped in the country.

Question 20

Offshoring occurs when a firm in Canada

Accepted Answer

A) hires foreign labour and produces in other countries. 
B) buys finished goods, components, or services from other firms in other countries. 
C) hires Canadian labour and produces in Canada. 
D) buys finished goods, components, or services from other firms in Canada. 
E) both A and B 
A) hires foreign labour and produces in other countries. 
B) buys finished goods, components, or services from other firms in other countries. 
C) hires Canadian labour and produces in Canada. 
D) buys finished goods, components, or services from other firms in Canada. 
E) both A and B

A tariff on watches which are imported by Atlantis _the price of watches in Atlantis and _.

Tariffs and import quotas both result in

A tariff _ the domestic price of the good and an import quota _ the domestic price of the good.

Tariffs

The fundamental force that drives international trade is

International trade benefits the

_______ occurs when a foreign firm sells its exports at a lower price than its cost of production.

A difference between a quota and a tariff is that

If Canada imposes a tariff of $1 per imported shirt, the tariff

If Canada imposes a tariff on imported cars,

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

An import quota is

Import quotas

Reducing a tariff _ the domestic production of the good and _ the total domestic consumption of the good.

In one year, Brazil exported more than 1.8 billion kilograms of coffee to the rest of the world.We can conclude that

An import quota is a

Offshoring occurs when a firm in Canada

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Filters

Exam 15: International Trade Policy

A tariff on watches which are imported by Atlantis _______the price of watches in Atlantis and _______.

Tariffs and import quotas both result in

A tariff _______ the domestic price of the good and an import quota _______ the domestic price of the good.

Tariffs

The fundamental force that drives international trade is

International trade benefits the

_______ occurs when a foreign firm sells its exports at a lower price than its cost of production.

A difference between a quota and a tariff is that

If Canada imposes a tariff of $1 per imported shirt, the tariff

If Canada imposes a tariff on imported cars,

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

An import quota is

Import quotas

Reducing a tariff _______ the domestic production of the good and _______ the total domestic consumption of the good.

In one year, Brazil exported more than 1.8 billion kilograms of coffee to the rest of the world.We can conclude that

An import quota is a

Offshoring occurs when a firm in Canada

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Filters

A tariff on watches which are imported by Atlantis _the price of watches in Atlantis and _.

A tariff _ the domestic price of the good and an import quota _ the domestic price of the good.

Reducing a tariff _ the domestic production of the good and _ the total domestic consumption of the good.