Question 1

Differences in production efficiencies among nations in producing a particular good result from:

Accepted Answer

A) different amounts of skilled labour. 
B) different climatic conditions. 
C) different levels of technological knowledge. 
D) all of the above. 
A) different amounts of skilled labour. 
B) different climatic conditions. 
C) different levels of technological knowledge. 
D) all of the above. D

Question 2

Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

Accepted Answer

A) v and vz. 
B) w and wy. 
C) w and wz. 
D) vx and xz. 
A) v and vz. 
B) w and wy. 
C) w and wz. 
D) vx and xz. A

Question 3

The data embodied in the below diagrams suggest that:

Accepted Answer

A) Italy should export X and Greece should export Y. 
B) Greece should export X and Italy should export Y. 
C) production in both countries is subject to increasing costs. 
D) Italy should import both X and Y from Greece. 
A) Italy should export X and Greece should export Y. 
B) Greece should export X and Italy should export Y. 
C) production in both countries is subject to increasing costs. 
D) Italy should import both X and Y from Greece. A

Question 4

The law of increasing opportunity costs:

Accepted Answer

A) applies to land-intensive commodities, but not to labour-intensive or capital-intensive commodities. 
B) results in straight-line production possibilities curves rather than curves which are bowed outward as viewed from the origin. 
C) refutes the principle of comparative advantage. 
D) may limit the extent to which a nation specializes in producing a particular product. 
A) applies to land-intensive commodities, but not to labour-intensive or capital-intensive commodities. 
B) results in straight-line production possibilities curves rather than curves which are bowed outward as viewed from the origin. 
C) refutes the principle of comparative advantage. 
D) may limit the extent to which a nation specializes in producing a particular product.

Question 5

Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The export supply curves for the two nations are represented by lines:

Accepted Answer

A) 5 and 7. 
B) 5 and 6. 
C) 6 and 8. 
D) 7 and 8. 
A) 5 and 7. 
B) 5 and 6. 
C) 6 and 8. 
D) 7 and 8.

Question 6

Export supply curves are _____________ import demand curves are __________.

Accepted Answer

A) horizontal; vertical 
B) vertical; horizontal 
C) downsloping; upward sloping 
D) upward sloping; downsloping 
A) horizontal; vertical 
B) vertical; horizontal 
C) downsloping; upward sloping 
D) upward sloping; downsloping

Question 7

Which of the following was the most important good traded by Canada in 2016?largest, using Table 17.1 for principal exports/imports of good in 2016?

Accepted Answer

A) Automotive products 
B) Energy products 
C) Metals and non-metallic minerals 
D) Forestry products 
A) Automotive products 
B) Energy products 
C) Metals and non-metallic minerals 
D) Forestry products

Question 8

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded.   Refer to the above data.At the equilibrium world price:

Accepted Answer

A) both nations will export steel. 
B) both nations will import steel. 
C) Alpha will export steel and Beta will import steel. 
D) Beta will export steel and Alpha will import steel. 
A) both nations will export steel. 
B) both nations will import steel. 
C) Alpha will export steel and Beta will import steel. 
D) Beta will export steel and Alpha will import steel.

Question 9

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.If Alpha had produced 20X and 30Y and Beta had produced 30X and 20Y before specialization and trade, then we can say that the gains from specialization and trade are 10X and 10Y.

Accepted Answer

A) True 
 B)False

Question 10

In effect tariffs on imports are:

Accepted Answer

A) special taxes on domestic producers. 
B) subsidies to domestic consumers. 
C) subsidies to foreign producers. 
D) subsidies for domestic producers. 
A) special taxes on domestic producers. 
B) subsidies to domestic consumers. 
C) subsidies to foreign producers. 
D) subsidies for domestic producers.

Question 11

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded.   Refer to the above data.The equilibrium world price must be higher than $1 because at $1:

Accepted Answer

A) Beta wants to import more than Alpha. 
B) Alpha wants to export more than Beta. 
C) both nations want to export steel. 
D) both nations want to import steel. 
A) Beta wants to import more than Alpha. 
B) Alpha wants to export more than Beta. 
C) both nations want to export steel. 
D) both nations want to import steel.

Question 12

The terms of trade will favour a larger nation over a smaller nation.

Accepted Answer

A) True 
 B)False

Question 13

Free trade based on comparative advantage is economically beneficial because:

Accepted Answer

A) it promotes an efficient allocation of world resources. 
B) it increases competition. 
C) it provides consumers with a wider range of products. 
D) of all of the above reasons. 
A) it promotes an efficient allocation of world resources. 
B) it increases competition. 
C) it provides consumers with a wider range of products. 
D) of all of the above reasons.

Question 14

Import quotas produce the same amount of revenue for government as protective tariffs.

Accepted Answer

A) True 
 B)False

Question 15

Which is responsible for the major decrease in trade barriers since World War II?

Accepted Answer

A) the North American Free Trade Agreement 
B) the General Agreement on Tariffs and Trade 
C) the granting of most-favoured nation status 
D) the World Trade Organization 
A) the North American Free Trade Agreement 
B) the General Agreement on Tariffs and Trade 
C) the granting of most-favoured nation status 
D) the World Trade Organization

Question 16

An excise tax that is applied to imported products which are not produced domestically is a(n):

Accepted Answer

A) protective tariff. 
B) revenue tariff. 
C) import quota. 
D) nontariff barrier. 
A) protective tariff. 
B) revenue tariff. 
C) import quota. 
D) nontariff barrier.

Question 17

The basic difference in the economic effects of a tariff compared with a quota is that a:

Accepted Answer

A) quota generates revenue for the government. 
B) tariff generates revenue for the government. 
C) tariff raises product prices, but a quota does not raise product prices. 
D) quota raises product prices, but a tariff does not raise product prices. 
A) quota generates revenue for the government. 
B) tariff generates revenue for the government. 
C) tariff raises product prices, but a quota does not raise product prices. 
D) quota raises product prices, but a tariff does not raise product prices.

Question 18

The bulk of Canadian export and import trade is with:

Accepted Answer

A) Japan 
B) China 
C) the United States 
D) England 
A) Japan 
B) China 
C) the United States 
D) England

Question 19

Which one of the following would best describe a protective tariff?

Accepted Answer

A) an excise tax that is usually applied to products which are not produced domestically in order to raise revenues for government 
B) an excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets 
C) a specification of the maximum amount of a product that may be imported in any period of time which is often used to protect domestic producers of a product 
D) such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protect domestic markets 
A) an excise tax that is usually applied to products which are not produced domestically in order to raise revenues for government 
B) an excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets 
C) a specification of the maximum amount of a product that may be imported in any period of time which is often used to protect domestic producers of a product 
D) such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protect domestic markets

Question 20

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that:

Accepted Answer

A) labour costs and product prices are not related. 
B) there is no discernible relationship between wage rates and labour productivity. 
C) wage rates and labour productivity are directly related. 
D) wage rates and labour productivity are inversely related. 
A) labour costs and product prices are not related. 
B) there is no discernible relationship between wage rates and labour productivity. 
C) wage rates and labour productivity are directly related. 
D) wage rates and labour productivity are inversely related.

Exam 17: B: International Trade

Differences in production efficiencies among nations in producing a particular good result from:

Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

The data embodied in the below diagrams suggest that:

The law of increasing opportunity costs:

Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The export supply curves for the two nations are represented by lines:

Export supply curves are _____________ import demand curves are __________.

Which of the following was the most important good traded by Canada in 2016?largest, using Table 17.1 for principal exports/imports of good in 2016?

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. Refer to the above data.At the equilibrium world price:

In effect tariffs on imports are:

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. Refer to the above data.The equilibrium world price must be higher than $1 because at $1:

The terms of trade will favour a larger nation over a smaller nation.

Free trade based on comparative advantage is economically beneficial because:

Import quotas produce the same amount of revenue for government as protective tariffs.

Which is responsible for the major decrease in trade barriers since World War II?

An excise tax that is applied to imported products which are not produced domestically is a(n):

The basic difference in the economic effects of a tariff compared with a quota is that a:

The bulk of Canadian export and import trade is with:

Which one of the following would best describe a protective tariff?

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that:

B: Limits, Alternatives, and Choices

A: - Limits, Alternatives, and Choices

B: The Market System and the Circular Flow

A: - The Market System and the Circular Flow

B: Demand, Supply, and Market Equilibrium

A: - Demand, Supply, and Market Equilibrium

B: Market Failures: Public Goods and Externalities

A: - Market Failures: Public Goods and Externalities

B: Governments Role and Government Failure

A: Governments Role and Government Failure

B: an Introduction to Macroeconomics

A: an Introduction to Macroeconomics

B: Measuring the Economys Output

A: Measuring the Economys Output

B: Economic Growth

A: Economic Growth

B: Business Cycles, Unemployment, and Inflation

A: Business Cycles, Unemployment, and Inflation

B: Basic Macroeconomic Relationships

A: Basic Macroeconomic Relationships

B: The Aggregate Expenditures Model

A: The Aggregate Expenditures Model

B: Aggregate Demand and Aggregate Supply

A: Aggregate Demand and Aggregate Supply

B: Fiscal Policy, Deficits, Surpluses, and Debt

A: Fiscal Policy, Deficits, Surpluses, and Debt

B: Money, Banking, and Money Creation

A: Money, Banking, and Money Creation

B: Interest Rates and Monetary Policy

A: Interest Rates and Monetary Policy

C: Financial Economics

A: Long-Run Macroeconomic Adjustments

B: Long-Run Macroeconomic Adjustments

A: International Trade

A: The Balance of Payments and Exchange Rates

B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

Filters

Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product.With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

Export supply curves are ___ import demand curves are .

The following data is for the hypothetical nations of Alpha and Beta.Q_s is domestic quantity supplied and Q_d is domestic quantity demanded. Refer to the above data.At the equilibrium world price:

The following data is for the hypothetical nations of Alpha and Beta.Q_s is domestic quantity supplied and Q_d is domestic quantity demanded. Refer to the above data.The equilibrium world price must be higher than $1 because at $1: