Question 1

One reason that international trade is restricted is that

Accepted Answer

A) the individual gain to parties who benefit from the protection will be much larger than the individual loss to parties who lose. 
B) tariff revenue raises more income than income taxes in industrial countries. 
C) the government cannot measure the cost of protectionism. 
D) the government completely pays the losers from international trade for their losses. 
E) protectionism benefits consumers. 
A) the individual gain to parties who benefit from the protection will be much larger than the individual loss to parties who lose. 
B) tariff revenue raises more income than income taxes in industrial countries. 
C) the government cannot measure the cost of protectionism. 
D) the government completely pays the losers from international trade for their losses. 
E) protectionism benefits consumers.

Question 2

Lowering the tariff on good X

Accepted Answer

A) increases domestic employment in industry X. 
B) increases government revenue. 
C) increases domestic imports of good X. 
D) increases the domestic price of good X. 
E) has no effect unless the nation's trading partners also lower their tariffs on good X. 
A) increases domestic employment in industry X. 
B) increases government revenue. 
C) increases domestic imports of good X. 
D) increases the domestic price of good X. 
E) has no effect unless the nation's trading partners also lower their tariffs on good X.

Question 3

In poorer countries, free trade _______ the demand for labour in these countries and _______ the wages paid in these countries.

Accepted Answer

A) decreases; raises 
B) increases; raises 
C) decreases; lowers 
D) increases; lowers 
E) increases the supply and decreases; lowers 
A) decreases; raises 
B) increases; raises 
C) decreases; lowers 
D) increases; lowers 
E) increases the supply and decreases; lowers

Question 4

When considering rent seeking, which of the following is true?

Accepted Answer

A) Usually only the anti- free trade group is concerned about what is best for society at large. 
B) The pro- free trade group generally will lobby more than the anti- free trade group. 
C) The anti- free trade group generally will lobby more than the pro- free trade group. 
D) Only the pro- free trade group is concerned about the government's revenue from tariffs. 
E) None of the above 
A) Usually only the anti- free trade group is concerned about what is best for society at large. 
B) The pro- free trade group generally will lobby more than the anti- free trade group. 
C) The anti- free trade group generally will lobby more than the pro- free trade group. 
D) Only the pro- free trade group is concerned about the government's revenue from tariffs. 
E) None of the above

Question 5

Tariffs and import quotas differ in that

Accepted Answer

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

Question 6

A tariff is imposed on a good.This _______ the quantity supplied, _______ the quantity demanded, and _______ the price in the home country.

Accepted Answer

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

Question 7

Refer to the table below to answer the following questions.
Table 15.1.1  
-Table 15.1.1 shows Glazeland's doughnut market before international trade.Glazeland opens up to international trade.If the world price is $0.40 a doughnut, then Glazeland will produce _______ doughnuts and will _______ doughnuts.

Accepted Answer

A) 3 million; export 3 million 
B) 4 million; export 1 million 
C) 4 million; import 1 million 
D) 6 million; export 3 million 
E) 3 million; import 3 million 
A) 3 million; export 3 million 
B) 4 million; export 1 million 
C) 4 million; import 1 million 
D) 6 million; export 3 million 
E) 3 million; import 3 million

Question 8

In a market that moves from a situation of no trade to a situation where a good is exported, the price of the good _______ and the quantity produced by the domestic industry _______ .

Accepted Answer

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

Question 9

Refer to the table below to answer the following questions.
  
-Table 15.3.1 shows the Canadian supply of and demand for widgets.Widgets are available on the world market for $7.If the Canadian government imposes a tariff of $1, the domestic selling price will be _______ and quantity bought will be _______.

Accepted Answer

A) $8; 40 million 
B) $6; 48 million 
C) $7; 44 million 
D) $8; 24 million 
E) $8; 16 million 
A) $8; 40 million 
B) $6; 48 million 
C) $7; 44 million 
D) $8; 24 million 
E) $8; 16 million

Question 10

Refer to the figure below to answer the following questions.
   The figure shows the market for helicopters in Canada, where D is the domestic demand curve and S is the domestic supply curve.Canada trades helicopters with the rest of the world at a price of $36 million per helicopter.
Figure 15.1.2
-In Figure 15.1.2, Canada _______ helicopters per year.

Accepted Answer

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

Question 11

Use the information below to answer the following questions.
Fact 15.3.1
Before 1995, trade between Canada and Mexico was subject to tariffs.In 1995, Mexico joined NAFTA and all Canadian and M tariffs have gradually been removed.
-Refer to Fact 15.3.1.The quantity of Canadian exports to Mexico has _______ and the Canadian government's tariff revenue from trade with Mexico has _______ .

Accepted Answer

A) decreased; increased 
B) increased; not changed 
C) not changed; not changed 
D) increased; increased 
E) increased; decreased 
A) decreased; increased 
B) increased; not changed 
C) not changed; not changed 
D) increased; increased 
E) increased; decreased

Question 12

Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.If Canada did not trade with the rest of the world, then the equilibrium price of lumber would be _______ in Canada than the rest of the world, and the equilibrium price of wine would be _______ in Canada than the rest of the world.

Accepted Answer

A) lower; lower 
B) higher; higher 
C) higher; lower 
D) lower; higher 
E) the same or lower; the same or higher 
A) lower; lower 
B) higher; higher 
C) higher; lower 
D) lower; higher 
E) the same or lower; the same or higher

Question 13

Offshore outsourcing occurs when a firm in Canada

Accepted Answer

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

Question 14

The fundamental force that drives international trade is

Accepted Answer

A) importation duties. 
B) comparative advantage. 
C) export advantage. 
D) absolute advantage. 
E) the advantage of execution. 
A) importation duties. 
B) comparative advantage. 
C) export advantage. 
D) absolute advantage. 
E) the advantage of execution.

Question 15

If a government imposes a quota on imports of a popular doll, the price of the doll in the country _______ and the quantity purchased in the country _______.

Accepted Answer

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

Question 16

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Accepted Answer

A) a voluntary export restraint. 
B) a sales tax. 
C) dumping. 
D) a tariff. 
E) an import quota. 
A) a voluntary export restraint. 
B) a sales tax. 
C) dumping. 
D) a tariff. 
E) an import quota.

Question 17

Prior to international trade, if the price of good X is lower in country A than in country B,

Accepted Answer

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

Question 18

A country opens up to trade.In an export industry,

Accepted Answer

A) domestic producers lose and the government wins. 
B) the government loses and domestic consumers win. 
C) domestic producers lose and domestic consumers win. 
D) domestic consumers lose and domestic producers win. 
E) none of the above 
A) domestic producers lose and the government wins. 
B) the government loses and domestic consumers win. 
C) domestic producers lose and domestic consumers win. 
D) domestic consumers lose and domestic producers win. 
E) none of the above

Question 19

Import quotas _______ the price of imported goods and _______ the quantity consumed in the country imposing the quota.

Accepted Answer

A) raise; do not change 
B) lower; increase 
C) raise; increase 
D) raise; decrease 
E) lower; decrease 
A) raise; do not change 
B) lower; increase 
C) raise; increase 
D) raise; decrease 
E) lower; decrease

Question 20

A market is open to international trade.At the world price, the quantity demanded is 150 units and the quantity supplied is 200 units.This country will

Accepted Answer

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

One reason that international trade is restricted is that

Lowering the tariff on good X

In poorer countries, free trade _ the demand for labour in these countries and _ the wages paid in these countries.

When considering rent seeking, which of the following is true?

Tariffs and import quotas differ in that

A tariff is imposed on a good.This ___ the quantity supplied, _ the quantity demanded, and _____ the price in the home country.

Refer to the table below to answer the following questions. Table 15.1.1 -Table 15.1.1 shows Glazeland's doughnut market before international trade.Glazeland opens up to international trade.If the world price is $0.40 a doughnut, then Glazeland will produce _ doughnuts and will _ doughnuts.

In a market that moves from a situation of no trade to a situation where a good is exported, the price of the good _ and the quantity produced by the domestic industry _ .

Refer to the table below to answer the following questions. -Table 15.3.1 shows the Canadian supply of and demand for widgets.Widgets are available on the world market for $7.If the Canadian government imposes a tariff of $1, the domestic selling price will be _ and quantity bought will be _.

Offshore outsourcing occurs when a firm in Canada

The fundamental force that drives international trade is

If a government imposes a quota on imports of a popular doll, the price of the doll in the country _ and the quantity purchased in the country _.

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Prior to international trade, if the price of good X is lower in country A than in country B,

A country opens up to trade.In an export industry,

Import quotas _ the price of imported goods and _ the quantity consumed in the country imposing the quota.

A market is open to international trade.At the world price, the quantity demanded is 150 units and the quantity supplied is 200 units.This country will

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

One reason that international trade is restricted is that

Lowering the tariff on good X

In poorer countries, free trade _______ the demand for labour in these countries and _______ the wages paid in these countries.

When considering rent seeking, which of the following is true?

Tariffs and import quotas differ in that

A tariff is imposed on a good.This _______ the quantity supplied, _______ the quantity demanded, and _______ the price in the home country.

In a market that moves from a situation of no trade to a situation where a good is exported, the price of the good _______ and the quantity produced by the domestic industry _______ .

Offshore outsourcing occurs when a firm in Canada

The fundamental force that drives international trade is

If a government imposes a quota on imports of a popular doll, the price of the doll in the country _______ and the quantity purchased in the country _______.

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Prior to international trade, if the price of good X is lower in country A than in country B,

A country opens up to trade.In an export industry,

Import quotas _______ the price of imported goods and _______ the quantity consumed in the country imposing the quota.

A market is open to international trade.At the world price, the quantity demanded is 150 units and the quantity supplied is 200 units.This country will

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

In poorer countries, free trade _ the demand for labour in these countries and _ the wages paid in these countries.

A tariff is imposed on a good.This ___ the quantity supplied, _ the quantity demanded, and _____ the price in the home country.

In a market that moves from a situation of no trade to a situation where a good is exported, the price of the good _ and the quantity produced by the domestic industry _ .

If a government imposes a quota on imports of a popular doll, the price of the doll in the country _ and the quantity purchased in the country _.

Import quotas _ the price of imported goods and _ the quantity consumed in the country imposing the quota.