Question 1

Which products were the leading exports of Canada in 2014

Accepted Answer

A) steel 
B) clothes 
C) industrial goods and materials 
D) petroleum 
A) steel 
B) clothes 
C) industrial goods and materials 
D) petroleum

Question 2

The "infant industry" argument for tariffs is criticized:

Accepted Answer

A) because it is difficult to determine which industries merit protection. 
B) because direct subsidies are probably a better means of stimulating such industries. 
C) because the tariffs may remain after the industry reaches maturity. 
D) for all of the above reasons. 
A) because it is difficult to determine which industries merit protection. 
B) because direct subsidies are probably a better means of stimulating such industries. 
C) because the tariffs may remain after the industry reaches maturity. 
D) for all of the above reasons.

Question 3

In a two-nation world, comparative advantage means that one nation can produce:

Accepted Answer

A) a product with fewer inputs than the other nation. 
B) a product at lower average cost than the other nation. 
C) a product at a lower domestic opportunity cost than the other nation. 
D) more of a product than the other nation. 
A) a product with fewer inputs than the other nation. 
B) a product at lower average cost than the other nation. 
C) a product at a lower domestic opportunity cost than the other nation. 
D) more of a product than the other nation.

Question 4

The cheap foreign labour argument suggests that:

Accepted Answer

A) to maintain its standard of living, Canada should not trade with low-wage countries. 
B) Canadian industries should develop policies to reduce their wage rates to compete with other countries. 
C) Canada should trade more with low-wage countries. 
D) Canada should use dumping policies to compete with low-wage countries. 
A) to maintain its standard of living, Canada should not trade with low-wage countries. 
B) Canadian industries should develop policies to reduce their wage rates to compete with other countries. 
C) Canada should trade more with low-wage countries. 
D) Canada should use dumping policies to compete with low-wage countries.

Question 5

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size.   Refer to the above data.Assume the production possibilities in Beta double at alternatives A through E while remaining as shown in the table for Alpha.As a result Beta should:

Accepted Answer

A) continue to specialize in producing chips. 
B) continue to specialize in fishing. 
C) no longer specialize and trade. 
D) specialize both in fishing and in producing chips and sell the surplus to Alpha. 
A) continue to specialize in producing chips. 
B) continue to specialize in fishing. 
C) no longer specialize and trade. 
D) specialize both in fishing and in producing chips and sell the surplus to Alpha.

Question 6

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 prices of steel in Alpha and Beta are:

Accepted Answer

A) $3 and $2, respectively. 
B) $2 and $4, respectively. 
C) $4 and $5, respectively. 
D) $1 and $2, respectively. 
A) $3 and $2, respectively. 
B) $2 and $4, respectively. 
C) $4 and $5, respectively. 
D) $1 and $2, respectively.

Question 7

The World Trade Organization:

Accepted Answer

A) is also known as the International Monetary Fund (IMF). 
B) was established by the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) to resolve disputes arising under the GATT rules. 
C) is also known as the European Union-NAFTA Alliance. 
D) enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit. 
A) is also known as the International Monetary Fund (IMF). 
B) was established by the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) to resolve disputes arising under the GATT rules. 
C) is also known as the European Union-NAFTA Alliance. 
D) enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.

Question 8

In the theory of comparative advantage, a good should be produced in that nation where:

Accepted Answer

A) the production possibilities line lies further to the right than the trading possibilities line. 
B) its cost is least in terms of alternative goods which might otherwise be produced. 
C) its absolute cost in terms of real resources used is least. 
D) its absolute money cost of production is least. 
A) the production possibilities line lies further to the right than the trading possibilities line. 
B) its cost is least in terms of alternative goods which might otherwise be produced. 
C) its absolute cost in terms of real resources used is least. 
D) its absolute money cost of production is least.

Question 9

The interaction of world supply and world demand determines:

Accepted Answer

A) world price. 
B) domestic price. 
C) both world price and domestic price. 
D) It has no effect. 
A) world price. 
B) domestic price. 
C) both world price and domestic price. 
D) It has no effect.

Question 10

Under GATT, tariffs on thousands of products were eliminated or reduced, with overall tariffs dropping by:

Accepted Answer

A) 33 percent. 
B) 40 percent. 
C) 25 percent. 
D) 51 percent. 
A) 33 percent. 
B) 40 percent. 
C) 25 percent. 
D) 51 percent.

Question 11

Dumping is:

Accepted Answer

A) selling of a good in a foreign market at a price above its domestic price. 
B) selling of a good in a foreign market at a price equal to its domestic price. 
C) a form of price discrimination. 
D) a form of protective tariff. 
A) selling of a good in a foreign market at a price above its domestic price. 
B) selling of a good in a foreign market at a price equal to its domestic price. 
C) a form of price discrimination. 
D) a form of protective tariff.

Question 12

Dumping of goods abroad:

Accepted Answer

A) constitutes a general case for permanent tariffs. 
B) may be part of a firm's price discrimination strategy. 
C) may be part of a nation's strategy to rectify its trade deficit. 
D) drives up prices of the dumped goods. 
A) constitutes a general case for permanent tariffs. 
B) may be part of a firm's price discrimination strategy. 
C) may be part of a nation's strategy to rectify its trade deficit. 
D) drives up prices of the dumped goods.

Question 13

The best example of a land-intensive commodity is:

Accepted Answer

A) cameras. 
B) radios. 
C) meat. 
D) chemicals. 
A) cameras. 
B) radios. 
C) meat. 
D) chemicals.

Question 14

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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

Accepted Answer

A) 1 unit and 15 units. 
B) 4 units and 7 units. 
C) 7 units and 0 units. 
D) 4 units and 6 units. 
A) 1 unit and 15 units. 
B) 4 units and 7 units. 
C) 7 units and 0 units. 
D) 4 units and 6 units.

Question 15

Assuming labour forces of equal size, the production possibilities curves below suggest that West Mudsville has:

Accepted Answer

A) lower wages than workers in East Mudsville before trade but equal wages after trade. 
B) absolute advantage over East Mudsville for both baseballs and, baseball hats. 
C) no advantage over East Mudsville. 
D) advantage of East Mudsville for baseballs and not baseball hats. 
A) lower wages than workers in East Mudsville before trade but equal wages after trade. 
B) absolute advantage over East Mudsville for both baseballs and, baseball hats. 
C) no advantage over East Mudsville. 
D) advantage of East Mudsville for baseballs and not baseball hats.

Question 16

The data in the tables below, show that production in:

Accepted Answer

A) Germany is subject to increasing domestic opportunity costs and the U.S.to constant domestic opportunity costs. 
B) the U.S.is subject to increasing domestic opportunity costs and Germany to constant domestic opportunity costs. 
C) both Germany and the U.S.are subject to constant domestic opportunity costs. 
D) both Germany and the U.S.are subject to increasing domestic opportunity costs. 
A) Germany is subject to increasing domestic opportunity costs and the U.S.to constant domestic opportunity costs. 
B) the U.S.is subject to increasing domestic opportunity costs and Germany to constant domestic opportunity costs. 
C) both Germany and the U.S.are subject to constant domestic opportunity costs. 
D) both Germany and the U.S.are subject to increasing domestic opportunity costs.

Question 17

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 $.50, 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 18

Which country did Canada sign a free-trade agreement with in 2008?

Accepted Answer

A) South Korea 
B) Columbia 
C) Brazil 
D) Argentina 
A) South Korea 
B) Columbia 
C) Brazil 
D) Argentina

Question 19

Studies show that:

Accepted Answer

A) it is impossible to estimate the benefits of trade barriers. 
B) costs and benefits of trade barriers are about equal. 
C) benefits of trade barriers exceed their costs in less developed nations. 
D) costs of trade barriers exceed their benefits, creating an efficiency loss for society. 
A) it is impossible to estimate the benefits of trade barriers. 
B) costs and benefits of trade barriers are about equal. 
C) benefits of trade barriers exceed their costs in less developed nations. 
D) costs of trade barriers exceed their benefits, creating an efficiency loss for society.

Question 20

Refer to the diagrams below.Which of the following is a feasible rate at which X and Y might be exchanged?

Accepted Answer

A) 1X for 3Y 
B) 1X for 1.5Y 
C) 1X for 2.5Y 
D) 1X for.5Y 
A) 1X for 3Y 
B) 1X for 1.5Y 
C) 1X for 2.5Y 
D) 1X for.5Y

Exam 17: B: International Trade

Which products were the leading exports of Canada in 2014

The "infant industry" argument for tariffs is criticized:

In a two-nation world, comparative advantage means that one nation can produce:

The cheap foreign labour argument suggests that:

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Refer to the above data.Assume the production possibilities in Beta double at alternatives A through E while remaining as shown in the table for Alpha.As a result Beta should:

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 prices of steel in Alpha and Beta are:

The World Trade Organization:

In the theory of comparative advantage, a good should be produced in that nation where:

The interaction of world supply and world demand determines:

Under GATT, tariffs on thousands of products were eliminated or reduced, with overall tariffs dropping by:

Dumping is:

Dumping of goods abroad:

The best example of a land-intensive commodity is:

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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

Assuming labour forces of equal size, the production possibilities curves below suggest that West Mudsville has:

The data in the tables below, show that production in:

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 $.50, this nation will experience a domestic:

Which country did Canada sign a free-trade agreement with in 2008?

Studies show that:

Refer to the diagrams below.Which of the following is a feasible rate at which X and Y might be exchanged?

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

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 prices of steel in Alpha and Beta are: