Question 1

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________.

Accepted Answer

A) a few;little 
B) a few;lot 
C) many;little 
D) many;lot 
E) We can't determine the relative benefits from the imposition of trade barriers. 
A) a few;little 
B) a few;lot 
C) many;little 
D) many;lot 
E) We can't determine the relative benefits from the imposition of trade barriers. B

Question 2

A key difference between tariffs and import quotas is that

Accepted Answer

A) consumers are hurt with import quotas but not with tariffs. 
B) consumers are hurt with tariffs but not with import quotas. 
C) the government receives revenue with a tariff, but the importer makes a profit with an import quota. 
D) the government receives revenue with an import quota, but the importer makes a profit with a tariff. 
E) producer surplus increases with a tariff and decreases with an import quota. 
A) consumers are hurt with import quotas but not with tariffs. 
B) consumers are hurt with tariffs but not with import quotas. 
C) the government receives revenue with a tariff, but the importer makes a profit with an import quota. 
D) the government receives revenue with an import quota, but the importer makes a profit with a tariff. 
E) producer surplus increases with a tariff and decreases with an import quota. C

Question 3

A tariff is a tax that is imposed by the ________ country when an ________ good crosses its international boundary.

Accepted Answer

A) exporting;imported 
B) importing;exported 
C) exporting;exported 
D) importing;imported 
E) importing or exporting;imported or exported 
A) exporting;imported 
B) importing;exported 
C) exporting;exported 
D) importing;imported 
E) importing or exporting;imported or exported D

Question 4

A country opens up to trade.In an import industry,surplus has been redistributed from

Accepted Answer

A) producers to consumers. 
B) consumers to producers. 
C) government to consumers. 
D) producers to government. 
E) none of the above. 
A) producers to consumers. 
B) consumers to producers. 
C) government to consumers. 
D) producers to government. 
E) none of the above.

Question 5

________ occurs when a foreign firm sells its exports at a lower price than its cost of production.

Accepted Answer

A) Comparative advantage 
B) Learning-by-doing 
C) A tariff 
D) An infant industry 
E) Dumping 
A) Comparative advantage 
B) Learning-by-doing 
C) A tariff 
D) An infant industry 
E) Dumping

Question 6

Reducing a tariff ________ the domestic production of the good and ________ the total domestic consumption of the good.

Accepted Answer

A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;increases 
A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;increases

Question 7

Offshore outsourcing occurs when a firm in Canada ________.

Accepted Answer

A) hires foreign labour and produces in other countries 
B) buys finished goods, components, or services from other firms in other countries 
C) buys finished goods, components, or services from other firms in Canada 
D) hires Canadian labour and produces in Canada 
E) hires foreign workers who work in Canada 
A) hires foreign labour and produces in other countries 
B) buys finished goods, components, or services from other firms in other countries 
C) buys finished goods, components, or services from other firms in Canada 
D) hires Canadian labour and produces in Canada 
E) hires foreign workers who work in Canada

Question 8

Refer to the figure below to answer the following questions.
   
The figure shows the market for helicopters in Canada, where D is the domestic demand curve and S is the domestic supply curve.Canada trades helicopters with the rest of the world at a price of $36 million per helicopter.
Figure 7.2.2
-In Figure 7.2.2,with international trade ________ helicopters per year are produced in Canada.

Accepted Answer

A) 360 
B) 480 
C) 720 
D) 240 
E) 600 
A) 360 
B) 480 
C) 720 
D) 240 
E) 600

Question 9

Which of the following statements about Canada's international trade in 2010 is correct?

Accepted Answer

A) The value of Canada's imports exceeded the value of Canada's exports. 
B) The value of Canada's exports was about 45 percent of the value of total expenditure in Canada. 
C) Canada imported only goods. 
D) Canada was the world's second largest trader. 
E) Canada exported only goods. 
A) The value of Canada's imports exceeded the value of Canada's exports. 
B) The value of Canada's exports was about 45 percent of the value of total expenditure in Canada. 
C) Canada imported only goods. 
D) Canada was the world's second largest trader. 
E) Canada exported only goods.

Question 10

Refer to the figure below to answer the following questions.
   
The figure shows the market for helicopters in Canada, where D is the domestic demand curve and S is the domestic supply curve.Canada trades helicopters with the rest of the world at a price of $36 million per helicopter.
Figure 7.2.2
-In Figure 7.2.2,international trade ________ total surplus in Canada by ________.

Accepted Answer

A) decreases;$2.56 billion 
B) increases;$4.8 billion 
C) decreases;$3.6 billion 
D) decreases;$1.92 billion 
E) increases;$1.92 billion 
A) decreases;$2.56 billion 
B) increases;$4.8 billion 
C) decreases;$3.6 billion 
D) decreases;$1.92 billion 
E) increases;$1.92 billion

Question 11

In poorer countries,free trade ________ the demand for labour in these countries and ________ the wages paid in these countries.

Accepted Answer

A) decreases;lowers 
B) decreases;raises 
C) increases;lowers 
D) increases;raises 
E) increases the supply and decreases;lowers 
A) decreases;lowers 
B) decreases;raises 
C) increases;lowers 
D) increases;raises 
E) increases the supply and decreases;lowers

Question 12

If a government imposes a quota on imports of a popular doll,the price of the doll in the importing country ________ and the quantity purchased in the importing country ________.

Accepted Answer

A) rises;increases 
B) rises;decreases 
C) falls;increases 
D) falls;decreases 
E) rises;does not change 
A) rises;increases 
B) rises;decreases 
C) falls;increases 
D) falls;decreases 
E) rises;does not change

Question 13

Refer to the figure below to answer the following questions.
   
The figure shows the market for helicopters in Canada, where D is the domestic demand curve and S is the domestic supply curve.Canada trades helicopters with the rest of the world at a price of $36 million per helicopter.
Figure 7.2.2
-In Figure 7.2.2,international trade ________ producer surplus in Canada by ________.

Accepted Answer

A) decreases;$2.88 billion 
B) decreases;$1.92 billion 
C) increases;$4.8 billion 
D) increases;$3.6 billion 
E) decreases;$4.8 billion 
A) decreases;$2.88 billion 
B) decreases;$1.92 billion 
C) increases;$4.8 billion 
D) increases;$3.6 billion 
E) decreases;$4.8 billion

Question 14

A tariff imposed by Canada on Japanese cars ________ the price of cars in Canada and ________ the quantity of Japanese cars imported into Canada.

Accepted Answer

A) raises;increases 
B) raises;decreases 
C) lowers;increases 
D) lowers;decreases 
E) raises;does not change 
A) raises;increases 
B) raises;decreases 
C) lowers;increases 
D) lowers;decreases 
E) raises;does not change

Question 15

Refer to the figure below to answer the following questions.
   
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 7.3.1
-Refer to Figure 7.3.1,the tariff ________ Canada's imports of shirts by ________ million shirts per year.

Accepted Answer

A) decreases;16 
B) decreases;8 
C) increases;8 
D) increases;4 
E) increases;16 
A) decreases;16 
B) decreases;8 
C) increases;8 
D) increases;4 
E) increases;16

Question 16

When Canada exports a good,the amount of the ________ in Canada's consumer surplus is ________ the amount of the ________ in Canada's producer surplus.

Accepted Answer

A) increase;smaller than;increase 
B) increase;larger than;decrease 
C) decrease;smaller than;increase 
D) decrease;equal to;decrease 
E) decrease;equal to;increase 
A) increase;smaller than;increase 
B) increase;larger than;decrease 
C) decrease;smaller than;increase 
D) decrease;equal to;decrease 
E) decrease;equal to;increase

Question 17

________ specifies the maximum quantity of a good that may be imported in a given period of time.

Accepted Answer

A) An import restriction 
B) A legislative restriction 
C) A trade restriction 
D) An import quota 
E) An import subsidy 
A) An import restriction 
B) A legislative restriction 
C) A trade restriction 
D) An import quota 
E) An import subsidy

Question 18

A country opens up to trade and becomes an importer of some good.Consumer surplus ________,producer surplus ________,and total surplus ________.

Accepted Answer

A) increases;decreases;decreases 
B) decreases;decreases;decreases 
C) decreases;increases;increases 
D) increases;increases;increases 
E) increases;decreases;increases 
A) increases;decreases;decreases 
B) decreases;decreases;decreases 
C) decreases;increases;increases 
D) increases;increases;increases 
E) increases;decreases;increases

Question 19

Import quotas ________ the price of imported goods and ________ the quantity consumed in the country imposing the quota.

Accepted Answer

A) raise;increase 
B) raise;decrease 
C) lower;increase 
D) lower;decrease 
E) raise;do not change 
A) raise;increase 
B) raise;decrease 
C) lower;increase 
D) lower;decrease 
E) raise;do not change

Question 20

Table 7.3.1
Canada's Market for Widgets
   
Refer to the table below to answer the following questions.
-Table 7.3.1 shows the Canadian supply of and demand for widgets.Widgets are available on the world market for $7.If the Canadian government imposes a tariff of $1,the domestic selling price will be ________ and quantity bought will be ________.

Accepted Answer

A) $6;48 million 
B) $7;44 million 
C) $8;16 million 
D) $8;24 million 
E) $8;40 million 
A) $6;48 million 
B) $7;44 million 
C) $8;16 million 
D) $8;24 million 
E) $8;40 million

Exam 7: Global Markets in Action

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________.

A key difference between tariffs and import quotas is that

A tariff is a tax that is imposed by the ________ country when an ________ good crosses its international boundary.

A country opens up to trade.In an import industry,surplus has been redistributed from

________ occurs when a foreign firm sells its exports at a lower price than its cost of production.

Reducing a tariff ________ the domestic production of the good and ________ the total domestic consumption of the good.

Offshore outsourcing occurs when a firm in Canada ________.

Which of the following statements about Canada's international trade in 2010 is correct?

In poorer countries,free trade ________ the demand for labour in these countries and ________ the wages paid in these countries.

If a government imposes a quota on imports of a popular doll,the price of the doll in the importing country ________ and the quantity purchased in the importing country ________.

A tariff imposed by Canada on Japanese cars ________ the price of cars in Canada and ________ the quantity of Japanese cars imported into Canada.

When Canada exports a good,the amount of the ________ in Canada's consumer surplus is ________ the amount of the ________ in Canada's producer surplus.

________ specifies the maximum quantity of a good that may be imported in a given period of time.

A country opens up to trade and becomes an importer of some good.Consumer surplus ________,producer surplus ________,and total surplus ________.

Import quotas ________ the price of imported goods and ________ the quantity consumed in the country imposing the quota.

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Usually the imposition of trade barriers affecting a particular good benefits people domestically,each of whom gains a .

A tariff is a tax that is imposed by the country when an good crosses its international boundary.

Reducing a tariff the domestic production of the good and the total domestic consumption of the good.

In poorer countries,free trade the demand for labour in these countries and the wages paid in these countries.

If a government imposes a quota on imports of a popular doll,the price of the doll in the importing country and the quantity purchased in the importing country .

A tariff imposed by Canada on Japanese cars the price of cars in Canada and the quantity of Japanese cars imported into Canada.

When Canada exports a good,the amount of the in Canada's consumer surplus is the amount of the in Canada's producer surplus.

A country opens up to trade and becomes an importer of some good.Consumer surplus ,producer surplus ,and total surplus .

Import quotas the price of imported goods and the quantity consumed in the country imposing the quota.