Question 1

When Sally can paint a house and plant a tree more efficiently than Tom, we can conclude that:

Accepted Answer

A) Tom has absolute advantage over Sally in both painting and gardening. 
B) Sally has absolute advantage over Tom in both painting and gardening. 
C) Sally has absolute advantage over Tom in gardening and not painting. 
D) Tom has absolute advantage over Sally in painting and not gardening. 
A) Tom has absolute advantage over Sally in both painting and gardening. 
B) Sally has absolute advantage over Tom in both painting and gardening. 
C) Sally has absolute advantage over Tom in gardening and not painting. 
D) Tom has absolute advantage over Sally in painting and not gardening.

Question 2

A nation will import a particular product if the world price is less than the domestic price.

Accepted Answer

A) True 
 B)False

Question 3

Refer to the data below.Assume that before specialization and trade Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage, the gains from specialization and trade will be: Production possibilities data for Gamma and Sigma.All data are in tons.Gamma production possibilities:   Sigma production possibilities:

Accepted Answer

A) 40 tons of pots. 
B) 20 tons of tea and 20 tons of pots. 
C) 20 tons of tea. 
D) 40 tons of tea. 
A) 40 tons of pots. 
B) 20 tons of tea and 20 tons of pots. 
C) 20 tons of tea. 
D) 40 tons of tea.

Question 4

Which of the following held the lowest percentage of Canadian imports industry is the smallest, using Table 17.1 for principal exp in 2016?

Accepted Answer

A) Machinery and equipment 
B) Energy products 
C) Electronic and electrical equipment 
D) Forestry products 
A) Machinery and equipment 
B) Energy products 
C) Electronic and electrical equipment 
D) Forestry products

Question 5

The following is the Production possibilities data for two countries, Alpha and Beta, which have populations of equal size.   The above data show that:

Accepted Answer

A) Beta has a comparative advantage in producing chips. 
B) Alpha has a comparative advantage in catching fish. 
C) Alpha is subject to constant costs and Beta is subject to increasing costs. 
D) Beta is more efficient than Alpha. 
A) Beta has a comparative advantage in producing chips. 
B) Alpha has a comparative advantage in catching fish. 
C) Alpha is subject to constant costs and Beta is subject to increasing costs. 
D) Beta is more efficient than Alpha.

Question 6

The "gain" from international trade is:

Accepted Answer

A) increased employment in the domestic export sector. 
B) more goods than would be attainable through domestic production alone. 
C) tariff revenue. 
D) increased employment in the domestic import sector. 
A) increased employment in the domestic export sector. 
B) more goods than would be attainable through domestic production alone. 
C) tariff revenue. 
D) increased employment in the domestic import sector.

Question 7

In 2016, the eight largest export nations accounted for approximately: what percentage of world exports, as of 2016.Use Image 17.1 Global Perspective.

Accepted Answer

A) 47.4 percent of world exports. 
B) 32.2 percent of world exports. 
C) 75 percent of world exports. 
D) 80 percent of world exports. 
A) 47.4 percent of world exports. 
B) 32.2 percent of world exports. 
C) 75 percent of world exports. 
D) 80 percent of world exports.

Question 8

Canadian exports of goods and services are about:

Accepted Answer

A) 20 percent of Canadian GDP. 
B) 5 percent of Canadian GDP. 
C) 10 percent of Canadian GDP. 
D) 30 percent of Canadian GDP. 
A) 20 percent of Canadian GDP. 
B) 5 percent of Canadian GDP. 
C) 10 percent of Canadian GDP. 
D) 30 percent of Canadian GDP.

Question 9

Which 1993 economic agreement established a major free-trade zone in the western hemisphere?

Accepted Answer

A) the formation of the European Union 
B) the North American Free Trade Agreement 
C) the Reciprocal Trade Agreements Act 
D) the Doha Development Agenda 
A) the formation of the European Union 
B) the North American Free Trade Agreement 
C) the Reciprocal Trade Agreements Act 
D) the Doha Development Agenda

Question 10

The following information is about the cost ratios for two products-fish (F) and chicken (C)-in Singsong and Harmony.Assume that production occurs under conditions of constant costs and these are the only two nations in the world.If in Singsong: 1F = 2C and, in Harmony: 1F = 4C:

Accepted Answer

A) Singsong will both produce chicken and catch fish. 
B) Harmony will both produce chicken and catch fish. 
C) Harmony will produce chicken and Singsong will catch fish. 
D) Singsong will produce chicken and Harmony will catch fish. 
A) Singsong will both produce chicken and catch fish. 
B) Harmony will both produce chicken and catch fish. 
C) Harmony will produce chicken and Singsong will catch fish. 
D) Singsong will produce chicken and Harmony will catch fish.

Question 11

Production possibilities data for Gamma and Sigma.All data are in tons.Gamma production possibilities:   Sigma production possibilities:
  On the basis of the above information:

Accepted Answer

A) Gamma should export both tea and pots to Sigma. 
B) Sigma should export tea to Gamma and Gamma should export pots to Sigma. 
C) Gamma should export tea to Sigma and Sigma should export pots to Gamma. 
D) Gamma should export tea to Sigma, but it will not be profitable for the two nations to exchange pots. 
A) Gamma should export both tea and pots to Sigma. 
B) Sigma should export tea to Gamma and Gamma should export pots to Sigma. 
C) Gamma should export tea to Sigma and Sigma should export pots to Gamma. 
D) Gamma should export tea to Sigma, but it will not be profitable for the two nations to exchange pots.

Question 12

Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price for this product is $1.60, this nation will experience a domestic:

Accepted Answer

A) shortage of 160 units, which it will meet with 160 units of imports. 
B) shortage of 160 units, which will increase the domestic price to $1.60. 
C) surplus of 160 units, which it will export. 
D) surplus of 160 units, which will reduce the world price to $1.00. 
A) shortage of 160 units, which it will meet with 160 units of imports. 
B) shortage of 160 units, which will increase the domestic price to $1.60. 
C) surplus of 160 units, which it will export. 
D) surplus of 160 units, which will reduce the world price to $1.00.

Question 13

The nation which has a comparative advantage in a particular product will be the only world exporter of that product.

Accepted Answer

A) True 
 B)False

Question 14

A licensing requirement, or unreasonable standard pertaining to the product quality and safety for a product that is imported into a country, is an example of:

Accepted Answer

A) protective tariffs. 
B) nontariff barriers. 
C) voluntary export restrictions. 
D) quotas on imported products. 
A) protective tariffs. 
B) nontariff barriers. 
C) voluntary export restrictions. 
D) quotas on imported products.

Question 15

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

Accepted Answer

A) both countries are experiencing an excess of exports over imports which results in economic growth. 
B) the domestic production possibilities curves entail unemployment and/or the domestic misallocation of resources. 
C) world resources will be allocated more efficiently if the two nations specialize and trade in accordance with comparative advantage. 
D) both nations will be worse off as a result of international specialization and trade. 
A) both countries are experiencing an excess of exports over imports which results in economic growth. 
B) the domestic production possibilities curves entail unemployment and/or the domestic misallocation of resources. 
C) world resources will be allocated more efficiently if the two nations specialize and trade in accordance with comparative advantage. 
D) both nations will be worse off as a result of international specialization and trade.

Question 16

Which is a valid counterargument to the infant industry argument for protective tariffs?

Accepted Answer

A) It results in too many benefits for domestic firms that export goods and services. 
B) It is difficult to determine which infant industries will become mature industries with a comparative advantage. 
C) The objective would be better achieved through strategic trade policy. 
D) The objective would be better achieved by import quotas and nontariff barriers. 
A) It results in too many benefits for domestic firms that export goods and services. 
B) It is difficult to determine which infant industries will become mature industries with a comparative advantage. 
C) The objective would be better achieved through strategic trade policy. 
D) The objective would be better achieved by import quotas and nontariff barriers.

Question 17

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1.   Refer to the above data.With a $1 per unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be:

Accepted Answer

A) $2 and $1. 
B) $1 and $2. 
C) $2 and $2. 
D) $3 and $2. 
A) $2 and $1. 
B) $1 and $2. 
C) $2 and $2. 
D) $3 and $2.

Question 18

Which is an example of a nontariff barrier (NTB)?

Accepted Answer

A) an excise tax on exported goods 
B) an excise tax on imported goods 
C) box-by-box inspection requirements for imported fruit 
D) an excise tax placed on a product that is not produced domestically. 
A) an excise tax on exported goods 
B) an excise tax on imported goods 
C) box-by-box inspection requirements for imported fruit 
D) an excise tax placed on a product that is not produced domestically.

Question 19

An example of a nontariff barrier would be:

Accepted Answer

A) a minimum limit on the quantity of imports. 
B) excessive licensing requirements. 
C) a tax on an imported product. 
D) voluntary export restraints. 
A) a minimum limit on the quantity of imports. 
B) excessive licensing requirements. 
C) a tax on an imported product. 
D) voluntary export restraints.

Question 20

Other things equal, a tariff is:

Accepted Answer

A) superior to an import quota for Canadians because a tariff increases the profits of foreign producers. 
B) inferior to an import quota for Canadians because a tariff increases the profits of domestic producers. 
C) superior to an import quota for Canadians because a tariff generates revenue for the federal government. 
D) inferior to an import quota for Canadians because a tariff generates revenue for the federal government. 
A) superior to an import quota for Canadians because a tariff increases the profits of foreign producers. 
B) inferior to an import quota for Canadians because a tariff increases the profits of domestic producers. 
C) superior to an import quota for Canadians because a tariff generates revenue for the federal government. 
D) inferior to an import quota for Canadians because a tariff generates revenue for the federal government.

Exam 17: B: International Trade

When Sally can paint a house and plant a tree more efficiently than Tom, we can conclude that:

A nation will import a particular product if the world price is less than the domestic price.

Which of the following held the lowest percentage of Canadian imports industry is the smallest, using Table 17.1 for principal exp in 2016?

The following is the Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. The above data show that:

The "gain" from international trade is:

In 2016, the eight largest export nations accounted for approximately: what percentage of world exports, as of 2016.Use Image 17.1 Global Perspective.

Canadian exports of goods and services are about:

Which 1993 economic agreement established a major free-trade zone in the western hemisphere?

The following information is about the cost ratios for two products-fish (F) and chicken (C)-in Singsong and Harmony.Assume that production occurs under conditions of constant costs and these are the only two nations in the world.If in Singsong: 1F = 2C and, in Harmony: 1F = 4C:

Production possibilities data for Gamma and Sigma.All data are in tons.Gamma production possibilities: Sigma production possibilities: On the basis of the above information:

Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price for this product is $1.60, this nation will experience a domestic:

The nation which has a comparative advantage in a particular product will be the only world exporter of that product.

A licensing requirement, or unreasonable standard pertaining to the product quality and safety for a product that is imported into a country, is an example of:

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

Which is a valid counterargument to the infant industry argument for protective tariffs?

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. Refer to the above data.With a $1 per unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be:

Which is an example of a nontariff barrier (NTB)?

An example of a nontariff barrier would be:

Other things equal, a tariff is:

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

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