Question 1

If Nation A can produce shirts at a lower opportunity cost than any other nation, Nation A is said to have a(n) _______ in the production of shirts.

Accepted Answer

A)  comparative advantage 
B)  comparative disadvantage 
C)  absolute advantage 
D)  autarky 
A)  comparative advantage 
B)  comparative disadvantage 
C)  absolute advantage 
D)  autarky

Question 2

Figure 18.4
-Refer to Figure 18.4. With an import ban, what is the equilibrium price of artichokes in Duckland?

Accepted Answer

A)  $4 
B)  $2 
C)  $3 
D)  $5 
A)  $4 
B)  $2 
C)  $3 
D)  $5

Question 3

What is dumping and why would firms engage in it?

Accepted Answer

Dumping is when the price charged in a f

Question 4

Which of the following trade agreements provides for the development of a single market among its members?

Accepted Answer

A)  European Union 
B)  World Trade Organization 
C)  Asian Pacific Economic Cooperation 
D)  North American Free Trade Agreement 
A)  European Union 
B)  World Trade Organization 
C)  Asian Pacific Economic Cooperation 
D)  North American Free Trade Agreement

Question 5

Which of the following situations will arise in the domestic market following the removal of an import quota?

Accepted Answer

A)  imports increase, domestic production increases, prices increase 
B)  imports decrease, domestic production increases, prices decrease 
C)  imports decrease, domestic production decreases, prices increase 
D)  imports increase, domestic production decreases, prices decrease 
A)  imports increase, domestic production increases, prices increase 
B)  imports decrease, domestic production increases, prices decrease 
C)  imports decrease, domestic production decreases, prices increase 
D)  imports increase, domestic production decreases, prices decrease

Question 6

The main rationale for anti- dumping policies is to prevent:

Accepted Answer

A)  comparative disadvantage. 
B)  economies of scale. 
C)  free- trade. 
D)  predatory pricing. 
A)  comparative disadvantage. 
B)  economies of scale. 
C)  free- trade. 
D)  predatory pricing.

Question 7

Figure 18.1
-Refer to Figure 18.1. The opportunity cost of producing sunglasses in Duckland is:

Accepted Answer

A)  2/3 umbrellas. 
B)  3/2 umbrellas. 
C)  6/5 umbrellas. 
D)  5/6 umbrellas. 
A)  2/3 umbrellas. 
B)  3/2 umbrellas. 
C)  6/5 umbrellas. 
D)  5/6 umbrellas.

Question 8

Figure 18.2
-Refer to Figure 18.2. The terms of trade for Pizzaland is:

Accepted Answer

A)  1 tomato for .4 cheese. 
B)  1 tomato for 2.5 cheeses. 
C)  1 tomato for .167 cheeses. 
D)  1 tomato for .6 cheese. 
A)  1 tomato for .4 cheese. 
B)  1 tomato for 2.5 cheeses. 
C)  1 tomato for .167 cheeses. 
D)  1 tomato for .6 cheese.

Question 9

What are the similarities and differences between an import tariff and a voluntary export restraint? What are the differences?

Accepted Answer

Both import tariffs and voluntary export

Question 10

-Refer to Table 18.1. The opportunity cost of a bagpipe in Scotland is:

Accepted Answer

A)  6 accordions. 
B)  2 accordions. 
C)  1/2 accordion. 
D)  1/3 accordion. 
A)  6 accordions. 
B)  2 accordions. 
C)  1/2 accordion. 
D)  1/3 accordion.

Question 11

Figure 18.1
-Refer to Figure 18.1. After trade and specialization begin, the maximum amount of umbrellas that Duckland can consume is:

Accepted Answer

A)  100. 
B)  150. 
C)  120. 
D)  90. 
A)  100. 
B)  150. 
C)  120. 
D)  90.

Question 12

Import bans, import quotas, voluntary export restraints, and tariffs on goods all:

Accepted Answer

A)  decrease equilibrium quantity and prices. 
B)  increase equilibrium quantities, but decrease prices. 
C)  decrease equilibrium quantities, but increase prices. 
D)  increase equilibrium quantity and prices. 
A)  decrease equilibrium quantity and prices. 
B)  increase equilibrium quantities, but decrease prices. 
C)  decrease equilibrium quantities, but increase prices. 
D)  increase equilibrium quantity and prices.

Question 13

Figure 18.1
-Refer to Figure 18.1. In autarky, the maximum amount of sunglasses that Duckland can produce is:

Accepted Answer

A)  150. 
B)  100. 
C)  120. 
D)  90. 
A)  150. 
B)  100. 
C)  120. 
D)  90.

Question 14

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions:
-Why did the application claim that Sam Walton "effectively ran an anti- poverty program"?

Accepted Answer

A)  because the tax generated from sales at Walmart is used to fund anti- poverty programs 
B)  because Walmart donated expired grocery items to the poor 
C)  because Walmart stocked its shelves with lower priced goods and services imported from countries like China 
D)  because Walmart contributed heavily to the "Make a Wish Foundation" 
A)  because the tax generated from sales at Walmart is used to fund anti- poverty programs 
B)  because Walmart donated expired grocery items to the poor 
C)  because Walmart stocked its shelves with lower priced goods and services imported from countries like China 
D)  because Walmart contributed heavily to the "Make a Wish Foundation"

Question 15

Figure 18.5
-In Figure 18.5, compared to free trade, the tariff causes domestic production of the good to:

Accepted Answer

A)  increase by Q5- Q4. 
B)  decrease by Q5- Q4. 
C)  increase by Q2- Q1. 
D)  decrease by Q2- Q1. 
A)  increase by Q5- Q4. 
B)  decrease by Q5- Q4. 
C)  increase by Q2- Q1. 
D)  decrease by Q2- Q1.

Question 16

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions:
-According to the application, living standards have not become more unequal because:

Accepted Answer

A)  the prices of goods and services that low income groups have paid have risen slower than the prices of goods and services that high income groups have paid. 
B)  the prices of goods and services that low income groups have paid have been dropping while the prices of goods and services that high income groups have not. 
C)  the prices of goods and services that low income groups have paid have risen faster than the prices of goods and services that high income groups have paid. 
D)  the prices of goods and services that low income groups have paid have risen while the prices of goods and services that high income groups have not. 
A)  the prices of goods and services that low income groups have paid have risen slower than the prices of goods and services that high income groups have paid. 
B)  the prices of goods and services that low income groups have paid have been dropping while the prices of goods and services that high income groups have not. 
C)  the prices of goods and services that low income groups have paid have risen faster than the prices of goods and services that high income groups have paid. 
D)  the prices of goods and services that low income groups have paid have risen while the prices of goods and services that high income groups have not.

Question 17

Figure 18.1
-Refer to Figure 18.1. The terms of trade for Duckland is:

Accepted Answer

A)  1 pair of sunglasses for 3/2 umbrellas. 
B)  1 pair of sunglasses for 2/3 umbrellas. 
C)  1 pair of sunglasses for 5/6 umbrellas. 
D)  1 pair of sunglasses for 6/5 umbrellas. 
A)  1 pair of sunglasses for 3/2 umbrellas. 
B)  1 pair of sunglasses for 2/3 umbrellas. 
C)  1 pair of sunglasses for 5/6 umbrellas. 
D)  1 pair of sunglasses for 6/5 umbrellas.

Question 18

Protection can give new industries a chance to get a foothold so that they can later compete in the international market after they become more productive through learning by doing.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following was a case in which the WTO concluded that dumping had occurred?

Accepted Answer

A)  steel from Brazil, India, and Japan sold in the United States 
B)  American beef sold in Mexico 
C)  Hong Kong VCRs sold in Europe 
D)  all of the above 
A)  steel from Brazil, India, and Japan sold in the United States 
B)  American beef sold in Mexico 
C)  Hong Kong VCRs sold in Europe 
D)  all of the above

Question 20

Which of the following benefits from a quota or VER?

Accepted Answer

A)  the government 
B)  domestic producers 
C)  consumers 
D)  all of the above 
A)  the government 
B)  domestic producers 
C)  consumers 
D)  all of the above

If Nation A can produce shirts at a lower opportunity cost than any other nation, Nation A is said to have a(n) _______ in the production of shirts.

Figure 18.4 -Refer to Figure 18.4. With an import ban, what is the equilibrium price of artichokes in Duckland?

What is dumping and why would firms engage in it?

Which of the following trade agreements provides for the development of a single market among its members?

Which of the following situations will arise in the domestic market following the removal of an import quota?

The main rationale for anti- dumping policies is to prevent:

Figure 18.1 -Refer to Figure 18.1. The opportunity cost of producing sunglasses in Duckland is:

Figure 18.2 -Refer to Figure 18.2. The terms of trade for Pizzaland is:

What are the similarities and differences between an import tariff and a voluntary export restraint? What are the differences?

-Refer to Table 18.1. The opportunity cost of a bagpipe in Scotland is:

Figure 18.1 -Refer to Figure 18.1. After trade and specialization begin, the maximum amount of umbrellas that Duckland can consume is:

Import bans, import quotas, voluntary export restraints, and tariffs on goods all:

Figure 18.1 -Refer to Figure 18.1. In autarky, the maximum amount of sunglasses that Duckland can produce is:

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions: -Why did the application claim that Sam Walton "effectively ran an anti- poverty program"?

Figure 18.5 -In Figure 18.5, compared to free trade, the tariff causes domestic production of the good to:

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions: -According to the application, living standards have not become more unequal because:

Figure 18.1 -Refer to Figure 18.1. The terms of trade for Duckland is:

Protection can give new industries a chance to get a foothold so that they can later compete in the international market after they become more productive through learning by doing.

Which of the following was a case in which the WTO concluded that dumping had occurred?

Which of the following benefits from a quota or VER?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nations Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

The World of International Finance

Filters

Exam 18: International Trade and Public Policy

If Nation A can produce shirts at a lower opportunity cost than any other nation, Nation A is said to have a(n) _______ in the production of shirts.

Figure 18.4 -Refer to Figure 18.4. With an import ban, what is the equilibrium price of artichokes in Duckland?

What is dumping and why would firms engage in it?

Which of the following trade agreements provides for the development of a single market among its members?

Which of the following situations will arise in the domestic market following the removal of an import quota?

The main rationale for anti- dumping policies is to prevent:

Figure 18.1 -Refer to Figure 18.1. The opportunity cost of producing sunglasses in Duckland is:

Figure 18.2 -Refer to Figure 18.2. The terms of trade for Pizzaland is:

What are the similarities and differences between an import tariff and a voluntary export restraint? What are the differences?

-Refer to Table 18.1. The opportunity cost of a bagpipe in Scotland is:

Figure 18.1 -Refer to Figure 18.1. After trade and specialization begin, the maximum amount of umbrellas that Duckland can consume is:

Import bans, import quotas, voluntary export restraints, and tariffs on goods all:

Figure 18.1 -Refer to Figure 18.1. In autarky, the maximum amount of sunglasses that Duckland can produce is:

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions: -Why did the application claim that Sam Walton "effectively ran an anti- poverty program"?

Figure 18.5 -In Figure 18.5, compared to free trade, the tariff causes domestic production of the good to:

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions: -According to the application, living standards have not become more unequal because:

Figure 18.1 -Refer to Figure 18.1. The terms of trade for Duckland is:

Protection can give new industries a chance to get a foothold so that they can later compete in the international market after they become more productive through learning by doing.

Which of the following was a case in which the WTO concluded that dumping had occurred?

Which of the following benefits from a quota or VER?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nations Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

The World of International Finance

Filters