Question 1

The goods and services we sell to people in other countries are our

Accepted Answer

A) tariffs. 
B) quotas. 
C) exports. 
D) imports. 
E) investment goods and services. 
A) tariffs. 
B) quotas. 
C) exports. 
D) imports. 
E) investment goods and services.

Question 2

Which of the following statements is true?

Accepted Answer

A) International trade raises wages in developing countries. 
B) International trade with rich industrial countries forces people in the developing countries to work for lower wages. 
C) International trade leads to job losses in both import competing industries and exporting industries. 
D) Unlike other types of international trade, offshoring does not bring any gains from trade. 
E) All of the above. 
A) International trade raises wages in developing countries. 
B) International trade with rich industrial countries forces people in the developing countries to work for lower wages. 
C) International trade leads to job losses in both import competing industries and exporting industries. 
D) Unlike other types of international trade, offshoring does not bring any gains from trade. 
E) All of the above.

Question 3

When a firm implements offshore outsourcing,consumers in Canada ________,workers in Canada in the industry that is being outsourced ________ and workers in the foreign country in the industry that is being outsourced ________.

Accepted Answer

A) gain;lose;lose 
B) lose;lose;gain 
C) lose;gain;lose 
D) gain;lose;gain 
E) gain;gain;gain 
A) gain;lose;lose 
B) lose;lose;gain 
C) lose;gain;lose 
D) gain;lose;gain 
E) gain;gain;gain

Question 4

A country

Accepted Answer

A) imports those goods in which it has a comparative advantage. 
B) exports those goods in which it has a comparative advantage. 
C) imports goods produced in countries with lower wage rates. 
D) exports goods produced by domestic industries with low wages relative to its trading partners. 
E) B and D are correct. 
A) imports those goods in which it has a comparative advantage. 
B) exports those goods in which it has a comparative advantage. 
C) imports goods produced in countries with lower wage rates. 
D) exports goods produced by domestic industries with low wages relative to its trading partners. 
E) B and D are correct.

Question 5

A Canadian tariff imposed on items that can be produced more cheaply abroad

Accepted Answer

A) benefits Canadians by making these goods cheaper. 
B) makes the goods more expensive in foreign markets. 
C) creates a deadweight loss. 
D) equalizes the cost of production between Canada and foreign producers. 
E) All of the above. 
A) benefits Canadians by making these goods cheaper. 
B) makes the goods more expensive in foreign markets. 
C) creates a deadweight loss. 
D) equalizes the cost of production between Canada and foreign producers. 
E) All of the above.

Question 6

In developing countries,there is more reliance on ________ as opposed to ________ for government revenue.

Accepted Answer

A) tariffs;tax collection 
B) import quotas;tariffs 
C) tax collection;tariffs 
D) tariffs;import quotas 
E) import quotas;tax collection 
A) tariffs;tax collection 
B) import quotas;tariffs 
C) tax collection;tariffs 
D) tariffs;import quotas 
E) import quotas;tax collection

Question 7

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,with the tariff Canadians buy ________ million shirts per year.

Accepted Answer

A) 48 
B) 32 
C) 16 
D) 24 
E) 40 
A) 48 
B) 32 
C) 16 
D) 24 
E) 40

Question 8

When considering rent seeking,which of the following is TRUE?

Accepted Answer

A) The anti-free trade group generally will lobby more than the pro-free trade group. 
B) The pro-free trade group generally will lobby more than the anti-free trade group. 
C) Usually only the anti-free trade group is concerned about what is best for society at large. 
D) Only the pro-free trade group is concerned about the government's revenue from tariffs. 
E) None of the above. 
A) The anti-free trade group generally will lobby more than the pro-free trade group. 
B) The pro-free trade group generally will lobby more than the anti-free trade group. 
C) Usually only the anti-free trade group is concerned about what is best for society at large. 
D) Only the pro-free trade group is concerned about the government's revenue from tariffs. 
E) None of the above.

Question 9

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.
Figure 7.2.1
-In Figure 7.2.1,with international trade Canada ________ million shirts per year.

Accepted Answer

A) imports 32 
B) imports 48 
C) exports 16 
D) exports 32 
E) imports 16 
A) imports 32 
B) imports 48 
C) exports 16 
D) exports 32 
E) imports 16

Question 10

A tariff is imposed on a good.This ________ producer surplus,________ consumer surplus,and ________ total surplus in the home country.

Accepted Answer

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

Question 11

Refer to the figure below to answer the following question.
   
Figure 7.2.4
-Refer to Figure 7.2.4.The graph shows the demand for shoes in Brazil,DB,the supply of shoes produced in Brazil,SB,and the market equilibrium in Brazil when it does not trade internationally.If the world price of a pair of shoes is $20 and Brazil opens up and trades internationally,producer surplus in Brazil ________ and consumer surplus in Brazil ________.

Accepted Answer

A) increases by area C + D;decreases by area C 
B) increases by area C;decreases by area C and a deadweight loss equal to area D arises 
C) increases by area D;decreases by area D 
D) decreases by area C;increases by area C + D 
E) decreases by area C + D;increases by area C 
A) increases by area C + D;decreases by area C 
B) increases by area C;decreases by area C and a deadweight loss equal to area D arises 
C) increases by area D;decreases by area D 
D) decreases by area C;increases by area C + D 
E) decreases by area C + D;increases by area C

Question 12

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

Accepted Answer

A) avoiding import quotas. 
B) increasing its gains from trade. 
C) dumping. 
D) engaging in learning-by-doing. 
E) exploiting a comparative advantage. 
A) avoiding import quotas. 
B) increasing its gains from trade. 
C) dumping. 
D) engaging in learning-by-doing. 
E) exploiting a comparative advantage.

Question 13

In industrial countries,there is more reliance on ________,as opposed to ________ for government revenue.

Accepted Answer

A) tariffs;tax collection 
B) import quotas;tariffs 
C) tariffs;import quotas 
D) import quotas;tax collection 
E) tax collection;tariffs 
A) tariffs;tax collection 
B) import quotas;tariffs 
C) tariffs;import quotas 
D) import quotas;tax collection 
E) tax collection;tariffs

Question 14

The argument that protection ________.

Accepted Answer

A) penalizes poor environmental standards is true 
B) allows us to compete with cheap foreign wages is true 
C) is necessary for infant industries is true 
D) saves jobs is flawed 
E) prevents rich countries from exploiting poor countries is true. 
A) penalizes poor environmental standards is true 
B) allows us to compete with cheap foreign wages is true 
C) is necessary for infant industries is true 
D) saves jobs is flawed 
E) prevents rich countries from exploiting poor countries is true.

Question 15

A tariff ________ a deadweight loss and an import quota ________ a deadweight loss.

Accepted Answer

A) creates;creates 
B) does not create;creates 
C) creates;does not create 
D) does not create;does not create 
E) sometimes creates;always creates 
A) creates;creates 
B) does not create;creates 
C) creates;does not create 
D) does not create;does not create 
E) sometimes creates;always creates

Question 16

Choose the correct statement.

Accepted Answer

A) Exports include goods and services. 
B) Imports include goods but not services. 
C) Imports include services but not goods. 
D) Exports include goods but not services. 
E) Exports include services but not goods. 
A) Exports include goods and services. 
B) Imports include goods but not services. 
C) Imports include services but not goods. 
D) Exports include goods but not services. 
E) Exports include services but not goods.

Question 17

Canada has a comparative advantage in producing airplanes if

Accepted Answer

A) it can produce them at a lower dollar cost than another country. 
B) it can produce a larger quantity than another country. 
C) it has a larger quantity of skilled workers than another country. 
D) it can produce them at a higher opportunity cost than another country. 
E) it can produce them at a lower opportunity cost than another country. 
A) it can produce them at a lower dollar cost than another country. 
B) it can produce a larger quantity than another country. 
C) it has a larger quantity of skilled workers than another country. 
D) it can produce them at a higher opportunity cost than another country. 
E) it can produce them at a lower opportunity cost than another country.

Question 18

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,how many widgets will Canada import?

Accepted Answer

A) 32 million 
B) 24 million 
C) 16 million 
D) 28 million 
E) 40 million 
A) 32 million 
B) 24 million 
C) 16 million 
D) 28 million 
E) 40 million

Question 19

Which of the following is a Canadian service export?

Accepted Answer

A) a Canadian buys dinner while travelling in Switzerland 
B) a Swiss buys dinner while travelling in Canada 
C) a Canadian buys a clock made in Switzerland 
D) a Swiss buys a computer made in Canada 
E) a Canadian buys a Canadian computer in Switzerland 
A) a Canadian buys dinner while travelling in Switzerland 
B) a Swiss buys dinner while travelling in Canada 
C) a Canadian buys a clock made in Switzerland 
D) a Swiss buys a computer made in Canada 
E) a Canadian buys a Canadian computer in Switzerland

Question 20

If Canada imposes a tariff on imported cars,

Accepted Answer

A) Canada's demand curve for cars shifts rightward. 
B) Canada's demand curve for cars shifts leftward. 
C) Canada's supply curve of cars shifts rightward. 
D) Canada's supply curve of cars shifts leftward. 
E) the price in Canada rises but neither Canada's demand curve nor Canada's supply curve shifts. 
A) Canada's demand curve for cars shifts rightward. 
B) Canada's demand curve for cars shifts leftward. 
C) Canada's supply curve of cars shifts rightward. 
D) Canada's supply curve of cars shifts leftward. 
E) the price in Canada rises but neither Canada's demand curve nor Canada's supply curve shifts.

Exam 7: Global Markets in Action

The goods and services we sell to people in other countries are our

Which of the following statements is true?

When a firm implements offshore outsourcing,consumers in Canada ________,workers in Canada in the industry that is being outsourced ________ and workers in the foreign country in the industry that is being outsourced ________.

A country

A Canadian tariff imposed on items that can be produced more cheaply abroad

In developing countries,there is more reliance on ________ as opposed to ________ for government revenue.

When considering rent seeking,which of the following is TRUE?

A tariff is imposed on a good.This ________ producer surplus,________ consumer surplus,and ________ total surplus in the home country.

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

In industrial countries,there is more reliance on ________,as opposed to ________ for government revenue.

The argument that protection ________.

A tariff ________ a deadweight loss and an import quota ________ a deadweight loss.

Choose the correct statement.

Canada has a comparative advantage in producing airplanes if

Which of the following is a Canadian service export?

If Canada imposes a tariff on imported cars,

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

When a firm implements offshore outsourcing,consumers in Canada ,workers in Canada in the industry that is being outsourced and workers in the foreign country in the industry that is being outsourced .

In developing countries,there is more reliance on as opposed to for government revenue.

A tariff is imposed on a good.This producer surplus, consumer surplus,and total surplus in the home country.

In industrial countries,there is more reliance on ,as opposed to for government revenue.

A tariff a deadweight loss and an import quota a deadweight loss.