Question 1

An excise tax on imported goods is known as a(n):

Accepted Answer

A) quota. 
B) tariff. 
C) export restriction. 
D) price ceiling. 
A) quota. 
B) tariff. 
C) export restriction. 
D) price ceiling.

Question 2

Barriers to free trade impair efficiency in the international allocation of resources.

Accepted Answer

A) True 
 B)False

Question 3

The impact of increasing, as opposed to constant costs is to:

Accepted Answer

A) intensify and prolong the comparative advantages which any nation may have initially. 
B) expand the limits of the terms of trade. 
C) cause the basis for further specialization to disappear as nations specialize in accordance with comparative advantage. 
D) cause nations to realize economies of scale in those products in which they specialize. 
A) intensify and prolong the comparative advantages which any nation may have initially. 
B) expand the limits of the terms of trade. 
C) cause the basis for further specialization to disappear as nations specialize in accordance with comparative advantage. 
D) cause nations to realize economies of scale in those products in which they specialize.

Question 4

Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.

Accepted Answer

A) True 
 B)False

Question 5

A tariff can best be described as:

Accepted Answer

A) an excise tax on an imported good. 
B) a government payment to domestic producers to enable them to sell competitively in world markets. 
C) an excise tax on an exported good. 
D) a law which sets a limit on the amount of a good which can be imported. 
A) an excise tax on an imported good. 
B) a government payment to domestic producers to enable them to sell competitively in world markets. 
C) an excise tax on an exported good. 
D) a law which sets a limit on the amount of a good which can be imported.

Question 6

A high tariff on imported good X might reduce domestic employment in industry Y if:

Accepted Answer

A) X is an input used domestically in producing Y. 
B) X and Y are substitute goods. 
C) X is an inferior good. 
D) Y is an inferior good. 
A) X is an input used domestically in producing Y. 
B) X and Y are substitute goods. 
C) X is an inferior good. 
D) Y is an inferior good.

Question 7

In the real world, specialization is rarely complete because:

Accepted Answer

A) nations normally experience increasing opportunity costs in producing more of the product in which they are specializing. 
B) production possibilities curves are straight lines rather than curves bowed outward as viewed from the origin. 
C) one nation's imports are necessarily another nation's exports. 
D) international law prohibits monopolies. 
A) nations normally experience increasing opportunity costs in producing more of the product in which they are specializing. 
B) production possibilities curves are straight lines rather than curves bowed outward as viewed from the origin. 
C) one nation's imports are necessarily another nation's exports. 
D) international law prohibits monopolies.

Question 8

Consider two countries which trade with each other.The degree of specialization according to their respective comparative advantages will be greater if the countries face:

Accepted Answer

A) constant costs. 
B) high tariffs. 
C) low unemployment rates. 
D) increasing costs. 
A) constant costs. 
B) high tariffs. 
C) low unemployment rates. 
D) increasing costs.

Question 9

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 a per unit tariff in the amount PcPt, price and total quantity sold will be:

Accepted Answer

A) Pt and x. 
B) Pc and z. 
C) Pt and y. 
D) Pa and x. 
A) Pt and x. 
B) Pc and z. 
C) Pt and y. 
D) Pa and x.

Question 10

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Accepted Answer

A) Germany, Great Britain, and Denmark. 
B) Germany, Denmark, and Sweden. 
C) Great Britain, Denmark, and Sweden. 
D) France, Germany, and Sweden. 
A) Germany, Great Britain, and Denmark. 
B) Germany, Denmark, and Sweden. 
C) Great Britain, Denmark, and Sweden. 
D) France, Germany, and Sweden.

Question 11

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.The terms of trade will be at or within the 1X = 1 1/2 Y to 1X = 2/3 Y range.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is the best description of a quota?

Accepted Answer

A) an excise tax that is designed to place foreign producers at a competitive disadvantage in selling in domestic markets 
B) a specification of the maximum amount of a product that may be imported in any period of time 
C) regulations and licensing related to the quality or safety of imported products 
D) agreements adopted by exporting nations to limit exports to another country 
A) an excise tax that is designed to place foreign producers at a competitive disadvantage in selling in domestic markets 
B) a specification of the maximum amount of a product that may be imported in any period of time 
C) regulations and licensing related to the quality or safety of imported products 
D) agreements adopted by exporting nations to limit exports to another country

Question 13

Dumping is the sale of a product in a foreign market:

Accepted Answer

A) at a price below its domestic price or cost of production. 
B) that does not meet the quality standards in the domestic market. 
C) and is the principal means used to enforce nontariff barriers. 
D) and is encouraged by voluntary export restraints. 
A) at a price below its domestic price or cost of production. 
B) that does not meet the quality standards in the domestic market. 
C) and is the principal means used to enforce nontariff barriers. 
D) and is encouraged by voluntary export restraints.

Question 14

Which of the following is an example of a capital-intensive commodity?

Accepted Answer

A) clothing 
B) wool 
C) sunflower seeds 
D) chemicals 
A) clothing 
B) wool 
C) sunflower seeds 
D) chemicals

Question 15

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 a PcPt per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

Accepted Answer

A) Pc and Pa. 
B) Pa and Pc. 
C) Pa and Pt. 
D) Pt and Pc. 
A) Pc and Pa. 
B) Pa and Pc. 
C) Pa and Pt. 
D) Pt and Pc.

Question 16

Refer to the above diagrams.The solid lines are production possibilities curves; the dashed lines are trading possibilities curves.The data suggest that:

Accepted Answer

A) West Lothian should specialize in, and export, beer. 
B) both countries will be better off if they do not engage in specialization and trade involving these two products. 
C) West Lothian should specialize in, and export, pizza. 
D) East Lothian should specialize in, and export, beer. 
A) West Lothian should specialize in, and export, beer. 
B) both countries will be better off if they do not engage in specialization and trade involving these two products. 
C) West Lothian should specialize in, and export, pizza. 
D) East Lothian should specialize in, and export, beer.

Question 17

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 a world price of $2:

Accepted Answer

A) Alpha will want to import 20 units of steel. 
B) Beta will want to export 20 units of steel. 
C) Alpha will want to export 20 units of steel. 
D) neither country will want to import steel. 
A) Alpha will want to import 20 units of steel. 
B) Beta will want to export 20 units of steel. 
C) Alpha will want to export 20 units of steel. 
D) neither country will want to import steel.

Question 18

When the distribution of resources and technology changes among nations:

Accepted Answer

A) it costs more to produce all products. 
B) the relative efficiency of producing products changes. 
C) it costs less to produce all products. 
D) each nation will specialize in producing one product. 
A) it costs more to produce all products. 
B) the relative efficiency of producing products changes. 
C) it costs less to produce all products. 
D) each nation will specialize in producing one product.

Question 19

The 1993 General Agreement on Tariffs and Trade (GATT):

Accepted Answer

A) reduced tariffs and liberalized government rules restricting international trade in services. 
B) established the World Bank. 
C) expanded the European Union by four nations. 
D) established a free trade zone between Canada, the United States, and Mexico. 
A) reduced tariffs and liberalized government rules restricting international trade in services. 
B) established the World Bank. 
C) expanded the European Union by four nations. 
D) established a free trade zone between Canada, the United States, and Mexico.

Question 20

Since World War II, several factors have contributed to the rapid growth of international trade.These factors are:

Accepted Answer

A) transportation technology, general increase in tariffs, and differences among nations in terms of production cost. 
B) transportation and communications technologies, and the general decline in the level of tariffs. 
C) transportation technology, reductions in the number of participants, and the general increase in the level of tariffs. 
D) communication technology, general increase in the level of tariffs, and the transportation technology. 
A) transportation technology, general increase in tariffs, and differences among nations in terms of production cost. 
B) transportation and communications technologies, and the general decline in the level of tariffs. 
C) transportation technology, reductions in the number of participants, and the general increase in the level of tariffs. 
D) communication technology, general increase in the level of tariffs, and the transportation technology.

Exam 17: B: International Trade

An excise tax on imported goods is known as a(n):

Barriers to free trade impair efficiency in the international allocation of resources.

The impact of increasing, as opposed to constant costs is to:

Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.

A tariff can best be described as:

A high tariff on imported good X might reduce domestic employment in industry Y if:

In the real world, specialization is rarely complete because:

Consider two countries which trade with each other.The degree of specialization according to their respective comparative advantages will be greater if the countries face:

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 a per unit tariff in the amount PcPt, price and total quantity sold will be:

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Which of the following is the best description of a quota?

Dumping is the sale of a product in a foreign market:

Which of the following is an example of a capital-intensive commodity?

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 a PcPt per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

Refer to the above diagrams.The solid lines are production possibilities curves; the dashed lines are trading possibilities curves.The data suggest that:

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 a world price of $2:

When the distribution of resources and technology changes among nations:

The 1993 General Agreement on Tariffs and Trade (GATT):

Since World War II, several factors have contributed to the rapid growth of international trade.These factors are:

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 a per unit tariff in the amount P_cP_t, price and total quantity sold will be:

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 a P_cP_t per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

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 a world price of $2: