Question 1

Why might trade cause income inequality?

Accepted Answer

The people of some countries have a comp

Question 2

Voluntary export restraints are illegal under WTO rules.

Accepted Answer

A) True 
 B)False

Question 3

-Refer to Table 18.2. The opportunity cost of stereos in the U.S. is:

Accepted Answer

A)  4 tractors. 
B)  2 tractors. 
C)  1/4 tractor. 
D)  1/2 tractor. 
A)  4 tractors. 
B)  2 tractors. 
C)  1/4 tractor. 
D)  1/2 tractor.

Question 4

-Refer to Table 18.2. The opportunity cost of stereos in Japan is:

Accepted Answer

A)  1/2 tractor. 
B)  1/4 tractor. 
C)  4 tractors. 
D)  2 tractors. 
A)  1/2 tractor. 
B)  1/4 tractor. 
C)  4 tractors. 
D)  2 tractors.

Question 5

What are some of the reasons why people protest against free trade?

Accepted Answer

A)  Trading with other countries, as opposed to self- sufficiency, diminishes our independence and sovereignty. 
B)  Trading with other countries causes us to lose our cultural identity. 
C)  People believe that trade can cause income inequality. 
D)  All of the above are correct. 
A)  Trading with other countries, as opposed to self- sufficiency, diminishes our independence and sovereignty. 
B)  Trading with other countries causes us to lose our cultural identity. 
C)  People believe that trade can cause income inequality. 
D)  All of the above are correct.

Question 6

Figure 18.3
-Refer to Figure 18.3. With a tariff or quota, the equilibrium price is:

Accepted Answer

A)  $12. 
B)  $8. 
C)  $2. 
D)  $10. 
A)  $12. 
B)  $8. 
C)  $2. 
D)  $10.

Question 7

Which of the following situations will arise in the domestic market following the imposition of an import ban?

Accepted Answer

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

Question 8

Figure 18.3
-Refer to Figure 18.3. With an import ban, the equilibrium quantity is:

Accepted Answer

A)  80. 
B)  100. 
C)  40. 
D)  60. 
A)  80. 
B)  100. 
C)  40. 
D)  60.

Question 9

Figure 18.2
-Refer to Figure 18.2. After trade and specialization begin, the maximum amount of tomatoes that Pizzaland can consume is:

Accepted Answer

A)  60. 
B)  80. 
C)  120. 
D)  90. 
A)  60. 
B)  80. 
C)  120. 
D)  90.

Question 10

Recall Application 1, "The Impact of Tariffs on the Poor," to answer the following questions:
-After reading the application, we can conclude that U.S. tariffs hurt poor consumer's the disproportionately because:

Accepted Answer

A)  U.S. tariffs fall heaviest on labor intensive goods. 
B)  U.S. tariffs are on goods like apparel items that poor consumers spend a larger fraction of income on. 
C)  U.S. tariffs fall heaviest on the lowest price goods in a category. 
D)  all of the above 
A)  U.S. tariffs fall heaviest on labor intensive goods. 
B)  U.S. tariffs are on goods like apparel items that poor consumers spend a larger fraction of income on. 
C)  U.S. tariffs fall heaviest on the lowest price goods in a category. 
D)  all of the above

Question 11

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

Accepted Answer

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

Question 12

The production possibilities curve represents the set of all:

Accepted Answer

A)  nonlinear forms of production in the economy. 
B)  combinations of goods and services that can be used in the production of other goods and services. 
C)  factors of production that can be used to manufacture goods and services. 
D)  feasible combinations of goods given that a nation's resources are fully employed. 
A)  nonlinear forms of production in the economy. 
B)  combinations of goods and services that can be used in the production of other goods and services. 
C)  factors of production that can be used to manufacture goods and services. 
D)  feasible combinations of goods given that a nation's resources are fully employed.

Question 13

A U.S. boycott against Mexican tuna caught in nets was:

Accepted Answer

A)  not upheld by the WTO on the grounds that killing dolphins in tuna nets does not harm the U.S. directly. 
B)  upheld by the WTO on the grounds that nations can impose any environmental standards on other nations. 
C)  upheld by the WTO on the grounds that the use of nets to catch tuna also kills dolphins. 
D)  not upheld by the WTO on the grounds that U.S. ships could still use nets to catch tuna. 
A)  not upheld by the WTO on the grounds that killing dolphins in tuna nets does not harm the U.S. directly. 
B)  upheld by the WTO on the grounds that nations can impose any environmental standards on other nations. 
C)  upheld by the WTO on the grounds that the use of nets to catch tuna also kills dolphins. 
D)  not upheld by the WTO on the grounds that U.S. ships could still use nets to catch tuna.

Question 14

A possible reason a nation might impose a protectionist policy such as a tariff is to:

Accepted Answer

A)  encourage specialization in the good in which the nation has a comparative advantage. 
B)  slow domestic production. 
C)  protect an infant industry from foreign competitors. 
D)  increase the level of imports. 
A)  encourage specialization in the good in which the nation has a comparative advantage. 
B)  slow domestic production. 
C)  protect an infant industry from foreign competitors. 
D)  increase the level of imports.

Question 15

A possible reason a nation might impose a protectionist policy such as a tariff is to:

Accepted Answer

A)  increase the level of imports. 
B)  help firms establish a world monopoly in a particular market. 
C)  encourage specialization in the good in which the nation has a comparative advantage. 
D)  increase the welfare of domestic consumers. 
A)  increase the level of imports. 
B)  help firms establish a world monopoly in a particular market. 
C)  encourage specialization in the good in which the nation has a comparative advantage. 
D)  increase the welfare of domestic consumers.

Question 16

Figure 18.1
-Refer to Figure 18.1. Duckland has a comparative advantage in the production of:

Accepted Answer

A)  sunglasses. 
B)  umbrellas. 
C)  both umbrellas and sunglasses. 
D)  neither umbrellas nor sunglasses. 
A)  sunglasses. 
B)  umbrellas. 
C)  both umbrellas and sunglasses. 
D)  neither umbrellas nor sunglasses.

Question 17

A tariff is a:

Accepted Answer

A)  limit on the amount a good that can be imported. 
B)  voluntary reduction of exports. 
C)  tax on a domestically produced goods. 
D)  tax on an imported good. 
A)  limit on the amount a good that can be imported. 
B)  voluntary reduction of exports. 
C)  tax on a domestically produced goods. 
D)  tax on an imported good.

Question 18

The World Trade Organization was formed to enforce GATT and other international trade agreements.

Accepted Answer

A) True 
 B)False

Question 19

If the opportunity cost of a table is 5 chairs in nation A and 1 chair in nation B, it makes sense for nation B to produce chairs.

Accepted Answer

A) True 
 B)False

Question 20

Autarky refers to:

Accepted Answer

A)  the equilibrium a nation reaches after trade begins. 
B)  a nation in the Middle East. 
C)  a situation in which there is no trade. 
D)  a situation in which nations trade goods and services. 
A)  the equilibrium a nation reaches after trade begins. 
B)  a nation in the Middle East. 
C)  a situation in which there is no trade. 
D)  a situation in which nations trade goods and services.

Why might trade cause income inequality?

Voluntary export restraints are illegal under WTO rules.

-Refer to Table 18.2. The opportunity cost of stereos in the U.S. is:

-Refer to Table 18.2. The opportunity cost of stereos in Japan is:

What are some of the reasons why people protest against free trade?

Figure 18.3 -Refer to Figure 18.3. With a tariff or quota, the equilibrium price is:

Which of the following situations will arise in the domestic market following the imposition of an import ban?

Figure 18.3 -Refer to Figure 18.3. With an import ban, the equilibrium quantity is:

Figure 18.2 -Refer to Figure 18.2. After trade and specialization begin, the maximum amount of tomatoes that Pizzaland can consume is:

Recall Application 1, "The Impact of Tariffs on the Poor," to answer the following questions: -After reading the application, we can conclude that U.S. tariffs hurt poor consumer's the disproportionately because:

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

The production possibilities curve represents the set of all:

A U.S. boycott against Mexican tuna caught in nets was:

A possible reason a nation might impose a protectionist policy such as a tariff is to:

A possible reason a nation might impose a protectionist policy such as a tariff is to:

Figure 18.1 -Refer to Figure 18.1. Duckland has a comparative advantage in the production of:

A tariff is a:

The World Trade Organization was formed to enforce GATT and other international trade agreements.

If the opportunity cost of a table is 5 chairs in nation A and 1 chair in nation B, it makes sense for nation B to produce chairs.

Autarky refers to:

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

Why might trade cause income inequality?

Voluntary export restraints are illegal under WTO rules.

-Refer to Table 18.2. The opportunity cost of stereos in the U.S. is:

-Refer to Table 18.2. The opportunity cost of stereos in Japan is:

What are some of the reasons why people protest against free trade?

Figure 18.3 -Refer to Figure 18.3. With a tariff or quota, the equilibrium price is:

Which of the following situations will arise in the domestic market following the imposition of an import ban?

Figure 18.3 -Refer to Figure 18.3. With an import ban, the equilibrium quantity is:

Figure 18.2 -Refer to Figure 18.2. After trade and specialization begin, the maximum amount of tomatoes that Pizzaland can consume is:

Recall Application 1, "The Impact of Tariffs on the Poor," to answer the following questions: -After reading the application, we can conclude that U.S. tariffs hurt poor consumer's the disproportionately because:

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

The production possibilities curve represents the set of all:

A U.S. boycott against Mexican tuna caught in nets was:

A possible reason a nation might impose a protectionist policy such as a tariff is to:

A possible reason a nation might impose a protectionist policy such as a tariff is to:

Figure 18.1 -Refer to Figure 18.1. Duckland has a comparative advantage in the production of:

A tariff is a:

The World Trade Organization was formed to enforce GATT and other international trade agreements.

If the opportunity cost of a table is 5 chairs in nation A and 1 chair in nation B, it makes sense for nation B to produce chairs.

Autarky refers to:

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