Question 1

Under GATT's "Most Favored Nation" provision countries can reduce tariffs only for their allies.

Accepted Answer

A) True 
 B)False

Question 2

Recall Application 2, "Protection for Candle Makers," to answer the following questions:
-According to the application, Frederic Bastiat's petition calling for the protection of candlemakers was fictitious.

Accepted Answer

A) True 
 B)False

Question 3

Figure 18.3
-Refer to Figure 18.3. With free trade, the equilibrium quantity is:

Accepted Answer

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

Question 4

-Refer to Table 18.2. Possible terms of trade between the U.S. and Japan are:

Accepted Answer

A)  1 tractor for 3 stereos. 
B)  1 tractor for 1/3 stereo. 
C)  1 stereo for 1/3 tractor. 
D)  1 stereo for 8 tractors. 
A)  1 tractor for 3 stereos. 
B)  1 tractor for 1/3 stereo. 
C)  1 stereo for 1/3 tractor. 
D)  1 stereo for 8 tractors.

Question 5

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions:
-According to the application, examples of non- durable goods include:

Accepted Answer

A)  massages. 
B)  televisions. 
C)  toys. 
D)  cars. 
A)  massages. 
B)  televisions. 
C)  toys. 
D)  cars.

Question 6

Protection shields domestic workers from foreign competition.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following explains why the world market may support only one or two firms worldwide?

Accepted Answer

A)  constant returns to scale 
B)  large economies of scale 
C)  comparative advantage 
D)  learning by doing 
A)  constant returns to scale 
B)  large economies of scale 
C)  comparative advantage 
D)  learning by doing

Question 8

In 2002, President Bush imposed a tariff on imported steel in order to protect domestic steel producers. What was the reason why the tariff ended?

Accepted Answer

A)  the threat of a possible recession in the U.S. 
B)  the decrease in demand for steel by US industries 
C)  the threat of retaliatory tariffs by Europe 
D)  the improved profitability of domestic steel firms 
A)  the threat of a possible recession in the U.S. 
B)  the decrease in demand for steel by US industries 
C)  the threat of retaliatory tariffs by Europe 
D)  the improved profitability of domestic steel firms

Question 9

Suppose that the U.S. has comparative advantage on cars while Japan has comparative advantage on TV's. Assume that both countries produce both goods in autarky. If both countries open their economies to trade, identify the workers in each country who will be hurt by free trade.

Accepted Answer

Once both countries open their borders t

Question 10

Figure 18.4
-Refer to Figure 18.4. With a tariff or quota, what is the equilibrium quantity of artichokes in Duckland?

Accepted Answer

A)  85 
B)  30 
C)  75 
D)  65 
A)  85 
B)  30 
C)  75 
D)  65

Question 11

An import quota:

Accepted Answer

A)  increases the amount of a good imported, thus increasing prices. 
B)  increases the amount of a good imported, thus decreasing prices. 
C)  limits the amount of a good that can be imported, thus decreasing prices. 
D)  limits the amount of a good that can be imported, thus increasing prices. 
A)  increases the amount of a good imported, thus increasing prices. 
B)  increases the amount of a good imported, thus decreasing prices. 
C)  limits the amount of a good that can be imported, thus decreasing prices. 
D)  limits the amount of a good that can be imported, thus increasing prices.

Question 12

-Refer to Table 18.1. The opportunity cost of an accordion in Poland is:

Accepted Answer

A)  1/2 bagpipe. 
B)  6 bagpipes. 
C)  1/3 bagpipe. 
D)  2 bagpipes. 
A)  1/2 bagpipe. 
B)  6 bagpipes. 
C)  1/3 bagpipe. 
D)  2 bagpipes.

Question 13

The equilibrium price under an import quota is above the price that occurs with free trade.

Accepted Answer

A) True 
 B)False

Question 14

-Refer to Table 18.1. The opportunity cost of an accordion in Scotland is:

Accepted Answer

A)  1/3 bagpipe. 
B)  6 bagpipes. 
C)  2 bagpipes. 
D)  1/2 bagpipe. 
A)  1/3 bagpipe. 
B)  6 bagpipes. 
C)  2 bagpipes. 
D)  1/2 bagpipe.

Question 15

Suppose Japanese auto manufacturers voluntarily reduce exports to the U.S. Who will benefit from a voluntary export restraint? Who will get hurt from a voluntary export restraint? Explain.

Accepted Answer

Aside from the U.S. auto manufacturers,

Question 16

The consumption possibilities curve shows the combinations of goods that can be:

Accepted Answer

A)  produced by a nation before trading begins. 
B)  produced by a nation after trade begins. 
C)  consumed by a nation after trading begins. 
D)  consumed by a nation before trade begins. 
A)  produced by a nation before trading begins. 
B)  produced by a nation after trade begins. 
C)  consumed by a nation after trading begins. 
D)  consumed by a nation before trade begins.

Question 17

Consider a nation that has a comparative advantage in the production of goods using unskilled labor. What types of workers will benefit from increased trade, and what type will lose?

Accepted Answer

As a result of trade

Question 18

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

Accepted Answer

A)  40. 
B)  50. 
C)  100. 
D)  150. 
A)  40. 
B)  50. 
C)  100. 
D)  150.

Question 19

What countries are members of the DR- CAFTA?

Accepted Answer

the United States, the Dominic

Question 20

The citizens of a country may prefer a tariff to a quota because:

Accepted Answer

A)  a quota, but not a tariff, generates additional revenue for the government, which can be used for public programs. 
B)  a tariff, but not a quota, generates additional profits for importers, not the government. 
C)  a tariff, but not a quota, generates additional revenue for the government, which can be used for public programs. 
D)  a quota, but not a tariff, generates additional profits for importers, not the government. 
A)  a quota, but not a tariff, generates additional revenue for the government, which can be used for public programs. 
B)  a tariff, but not a quota, generates additional profits for importers, not the government. 
C)  a tariff, but not a quota, generates additional revenue for the government, which can be used for public programs. 
D)  a quota, but not a tariff, generates additional profits for importers, not the government.

Under GATT's "Most Favored Nation" provision countries can reduce tariffs only for their allies.

Recall Application 2, "Protection for Candle Makers," to answer the following questions: -According to the application, Frederic Bastiat's petition calling for the protection of candlemakers was fictitious.

Figure 18.3 -Refer to Figure 18.3. With free trade, the equilibrium quantity is:

-Refer to Table 18.2. Possible terms of trade between the U.S. and Japan are:

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions: -According to the application, examples of non- durable goods include:

Protection shields domestic workers from foreign competition.

Which of the following explains why the world market may support only one or two firms worldwide?

In 2002, President Bush imposed a tariff on imported steel in order to protect domestic steel producers. What was the reason why the tariff ended?

Suppose that the U.S. has comparative advantage on cars while Japan has comparative advantage on TV's. Assume that both countries produce both goods in autarky. If both countries open their economies to trade, identify the workers in each country who will be hurt by free trade.

Figure 18.4 -Refer to Figure 18.4. With a tariff or quota, what is the equilibrium quantity of artichokes in Duckland?

An import quota:

-Refer to Table 18.1. The opportunity cost of an accordion in Poland is:

The equilibrium price under an import quota is above the price that occurs with free trade.

-Refer to Table 18.1. The opportunity cost of an accordion in Scotland is:

Suppose Japanese auto manufacturers voluntarily reduce exports to the U.S. Who will benefit from a voluntary export restraint? Who will get hurt from a voluntary export restraint? Explain.

The consumption possibilities curve shows the combinations of goods that can be:

Consider a nation that has a comparative advantage in the production of goods using unskilled labor. What types of workers will benefit from increased trade, and what type will lose?

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

What countries are members of the DR- CAFTA?

The citizens of a country may prefer a tariff to a quota because:

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

Under GATT's "Most Favored Nation" provision countries can reduce tariffs only for their allies.

Recall Application 2, "Protection for Candle Makers," to answer the following questions: -According to the application, Frederic Bastiat's petition calling for the protection of candlemakers was fictitious.

Figure 18.3 -Refer to Figure 18.3. With free trade, the equilibrium quantity is:

-Refer to Table 18.2. Possible terms of trade between the U.S. and Japan are:

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions: -According to the application, examples of non- durable goods include:

Protection shields domestic workers from foreign competition.

Which of the following explains why the world market may support only one or two firms worldwide?

In 2002, President Bush imposed a tariff on imported steel in order to protect domestic steel producers. What was the reason why the tariff ended?

Suppose that the U.S. has comparative advantage on cars while Japan has comparative advantage on TV's. Assume that both countries produce both goods in autarky. If both countries open their economies to trade, identify the workers in each country who will be hurt by free trade.

Figure 18.4 -Refer to Figure 18.4. With a tariff or quota, what is the equilibrium quantity of artichokes in Duckland?

An import quota:

-Refer to Table 18.1. The opportunity cost of an accordion in Poland is:

The equilibrium price under an import quota is above the price that occurs with free trade.

-Refer to Table 18.1. The opportunity cost of an accordion in Scotland is:

Suppose Japanese auto manufacturers voluntarily reduce exports to the U.S. Who will benefit from a voluntary export restraint? Who will get hurt from a voluntary export restraint? Explain.

The consumption possibilities curve shows the combinations of goods that can be:

Consider a nation that has a comparative advantage in the production of goods using unskilled labor. What types of workers will benefit from increased trade, and what type will lose?

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

What countries are members of the DR- CAFTA?

The citizens of a country may prefer a tariff to a quota because:

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