Question 1

Prior to international trade,if the price of good X is lower in country A than in country B,

Accepted Answer

A) country B has an absolute advantage in the production of good X. 
B) country B has a comparative advantage in the production of good X. 
C) country A has an absolute advantage in the production of good X. 
D) country A has a comparative advantage in the production of good X. 
E) country B should stop producing good A. 
A) country B has an absolute advantage in the production of good X. 
B) country B has a comparative advantage in the production of good X. 
C) country A has an absolute advantage in the production of good X. 
D) country A has a comparative advantage in the production of good X. 
E) country B should stop producing good A. D

Question 2

Table 31.1.2
   
Refer to the table below to answer the following questions.
-Refer to Table 31.1.2.The table shows a country's demand and supply schedules.Suppose the world price is $4 a unit.The country

Accepted Answer

A) imports 20 units. 
B) exports 20 units. 
C) imports 10 units. 
D) exports 10 units. 
E) imports 30 units. 
A) imports 20 units. 
B) exports 20 units. 
C) imports 10 units. 
D) exports 10 units. 
E) imports 30 units. A

Question 3

Suppose the country of Mooland imposes tariffs on imported beef from the country of Aqualand.As a result of the tariffs,the

Accepted Answer

A) price of beef in Mooland falls. 
B) quantity of beef exported by Mooland increases. 
C) quantity of beef imported by Mooland decreases. 
D) quantity of beef imported by Mooland increases. 
E) price of beef in Mooland does not change. 
A) price of beef in Mooland falls. 
B) quantity of beef exported by Mooland increases. 
C) quantity of beef imported by Mooland decreases. 
D) quantity of beef imported by Mooland increases. 
E) price of beef in Mooland does not change. C

Question 4

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 5

Tariffs

Accepted Answer

A) generate revenue for consumers. 
B) generate revenue for the government. 
C) encourage domestic consumers to buy more imports. 
D) encourage domestic producers to produce less. 
E) lower prices for consumers. 
A) generate revenue for consumers. 
B) generate revenue for the government. 
C) encourage domestic consumers to buy more imports. 
D) encourage domestic producers to produce less. 
E) lower prices for consumers.

Question 6

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 31.1.1
-In Figure 31.1.1,with international trade ________ million shirts per year are produced in Canada.

Accepted Answer

A) 48 
B) 32 
C) 20 
D) 56 
E) 16 
A) 48 
B) 32 
C) 20 
D) 56 
E) 16

Question 7

If a quota is set at the same quantity of imports that results from a tariff in Country A,

Accepted Answer

A) the quantity consumed in Country A is less under the quota than under the tariff. 
B) the quantity consumed in Country A is the same under the quota and under the tariff. 
C) the quantity consumed in Country A is more under the quota than under the tariff. 
D) the government tariff revenue is greater than the importers' profit from the import quota. 
E) the government tariff revenue is less than the importers' profit from the import quota. 
A) the quantity consumed in Country A is less under the quota than under the tariff. 
B) the quantity consumed in Country A is the same under the quota and under the tariff. 
C) the quantity consumed in Country A is more under the quota than under the tariff. 
D) the government tariff revenue is greater than the importers' profit from the import quota. 
E) the government tariff revenue is less than the importers' profit from the import quota.

Question 8

If a country imposes a tariff on an imported good,the tariff ________ the price in the importing country and ________ the quantity of imports.

Accepted Answer

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

Question 9

Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.If Canada did not trade with the rest of the world,then the equilibrium price of lumber would be ________ in Canada than the rest of the world,and the equilibrium price of wine would be ________ in Canada than the rest of the world.

Accepted Answer

A) lower;higher 
B) higher;lower 
C) higher;higher 
D) lower;lower 
E) sometimes higher and sometimes lower;always higher 
A) lower;higher 
B) higher;lower 
C) higher;higher 
D) lower;lower 
E) sometimes higher and sometimes lower;always higher

Question 10

If a government imposes a quota on imports of a popular doll,the price of the doll in the country ________ and the quantity purchased in the 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 11

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 31.2.1
-Refer to Figure 31.2.1,the Canadian government's revenue from the tariff is ________.

Accepted Answer

A) $64 million 
B) $32 million 
C) $128 million 
D) $48 million 
E) $480 million 
A) $64 million 
B) $32 million 
C) $128 million 
D) $48 million 
E) $480 million

Question 12

________ 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 13

In one year,Brazil exported more than 1.8 billion kilograms of coffee to the rest of the world.We can conclude that

Accepted Answer

A) Brazil has comparative advantage in coffee production. 
B) Brazil has an absolute advantage in coffee production. 
C) the rest of the world has a comparative advantage in coffee production. 
D) the rest of the world has an absolute advantage in coffee production. 
E) Brazil's government has placed a tariff on coffee. 
A) Brazil has comparative advantage in coffee production. 
B) Brazil has an absolute advantage in coffee production. 
C) the rest of the world has a comparative advantage in coffee production. 
D) the rest of the world has an absolute advantage in coffee production. 
E) Brazil's government has placed a tariff on coffee.

Question 14

Table 31.1.2
   
Refer to the table below to answer the following questions.
-Refer to Table 31.1.2.The table shows a country's demand and supply schedules.At what world price would the country import?

Accepted Answer

A) at exactly $8 a unit 
B) any price above $8 a unit 
C) a price of $10 a unit 
D) a price of $20 a unit 
E) a price below $8 a unit 
A) at exactly $8 a unit 
B) any price above $8 a unit 
C) a price of $10 a unit 
D) a price of $20 a unit 
E) a price below $8 a unit

Question 15

Which of the following are reasons economists consider valid for trade protection?
I.Protection penalizes countries that have weak environmental standards.
II.Protection limits dumping of low-wage jobs into the domestic economy.
III.Protection prevents low-wage jobs in foreign countries from lowering wages in Canada.

Accepted Answer

A) I and II 
B) II and III 
C) I, II, and III 
D) I and III 
E) None of the above 
A) I and II 
B) II and III 
C) I, II, and III 
D) I and III 
E) None of the above

Question 16

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) domestic producers gain with a tariff and lose 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) domestic producers gain with a tariff and lose with an import quota.

Question 17

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 18

Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.Canada has a comparative advantage in producing ________.The rest of the world has a comparative advantage in producing ________.

Accepted Answer

A) lumber;wine 
B) wine;lumber 
C) wine;wine 
D) lumber;lumber 
E) a good other than lumber or wine;wine 
A) lumber;wine 
B) wine;lumber 
C) wine;wine 
D) lumber;lumber 
E) a good other than lumber or wine;wine

Question 19

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Accepted Answer

A) an import quota. 
B) dumping. 
C) a voluntary export restraint. 
D) a tariff. 
E) a sales tax. 
A) an import quota. 
B) dumping. 
C) a voluntary export restraint. 
D) a tariff. 
E) a sales tax.

Question 20

Increasing a tariff ________ the domestic quantity consumed of the good and ________ the domestic production of the good.

Accepted Answer

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

Exam 31:International Trade Policy

Prior to international trade,if the price of good X is lower in country A than in country B,

Table 31.1.2 Refer to the table below to answer the following questions. -Refer to Table 31.1.2.The table shows a country's demand and supply schedules.Suppose the world price is $4 a unit.The country

Suppose the country of Mooland imposes tariffs on imported beef from the country of Aqualand.As a result of the tariffs,the

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

Tariffs

If a quota is set at the same quantity of imports that results from a tariff in Country A,

If a country imposes a tariff on an imported good,the tariff ________ the price in the importing country and ________ the quantity of imports.

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

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

In one year,Brazil exported more than 1.8 billion kilograms of coffee to the rest of the world.We can conclude that

Table 31.1.2 Refer to the table below to answer the following questions. -Refer to Table 31.1.2.The table shows a country's demand and supply schedules.At what world price would the country import?

A key difference between tariffs and import quotas is that

Which of the following statements is true?

Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.Canada has a comparative advantage in producing ________.The rest of the world has a comparative advantage in producing ________.

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Increasing a tariff ________ the domestic quantity consumed of the good and ________ the domestic production of the good.

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

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

Filters

If a country imposes a tariff on an imported good,the tariff the price in the importing country and the quantity of imports.

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

Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.Canada has a comparative advantage in producing .The rest of the world has a comparative advantage in producing .

Increasing a tariff the domestic quantity consumed of the good and the domestic production of the good.