Question 1

Consider a market that sells some of its goods as exports.Who does NOT benefit?

Accepted Answer

A) domestic consumers 
B) domestic producers 
C) workers in the industry 
D) foreign consumers 
E) all of the above benefit 
A) domestic consumers 
B) domestic producers 
C) workers in the industry 
D) foreign consumers 
E) all of the above benefit

Question 2

If Canada imposes a tariff of $1 per imported shirt,the tariff

Accepted Answer

A) raises the price of a shirt paid by Canadian consumers. 
B) benefits Canadian shirt producers. 
C) decreases imports of shirts into Canada. 
D) creates a social loss. 
E) all of the above. 
A) raises the price of a shirt paid by Canadian consumers. 
B) benefits Canadian shirt producers. 
C) decreases imports of shirts into Canada. 
D) creates a social loss. 
E) all of the above.

Question 3

Usually the removal 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 removal 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 removal of trade barriers.

Question 4

Which of the following are valid reasons advanced by almost all economists? Protection

Accepted Answer

A) saves jobs. 
B) prevents rich countries from exploiting developing countries. 
C) is a good way for governments in developed nations to raise revenue. 
D) penalizes lax environmental standards. 
E) Economists would not support any of the above reasons. 
A) saves jobs. 
B) prevents rich countries from exploiting developing countries. 
C) is a good way for governments in developed nations to raise revenue. 
D) penalizes lax environmental standards. 
E) Economists would not support any of the above reasons.

Question 5

An import quota directly restricts ________ and is designed to protect domestic ________.

Accepted Answer

A) exports;consumers only 
B) exports;producers only 
C) imports;consumers only 
D) imports;producers only 
E) imports;producers and consumers 
A) exports;consumers only 
B) exports;producers only 
C) imports;consumers only 
D) imports;producers only 
E) imports;producers and consumers

Question 6

Rent seeking is one reason why countries choose to

Accepted Answer

A) export and import the same goods. 
B) work for freer trade. 
C) follow the theory of comparative advantage. 
D) hire foreign labour. 
E) restrict trade. 
A) export and import the same goods. 
B) work for freer trade. 
C) follow the theory of comparative advantage. 
D) hire foreign labour. 
E) restrict trade.

Question 7

When a tariff is imposed,the gap between the domestic price and the price received in the exporting country is captured by

Accepted Answer

A) consumers in the importing country. 
B) the domestic producers of the good. 
C) the government of the importing country. 
D) foreign exporters. 
E) the domestic importers of the good. 
A) consumers in the importing country. 
B) the domestic producers of the good. 
C) the government of the importing country. 
D) foreign exporters. 
E) the domestic importers of the good.

Question 8

In a market that moves from a situation of no trade to a situation where a good is exported,the price of the good ________ and the quantity produced by the domestic industry ________.

Accepted Answer

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

Question 9

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 10

Which of the following statements concerning tariffs is NOT true?

Accepted Answer

A) A tariff increases domestic production. 
B) A tariff creates revenue for the government. 
C) A tariff decreases international trade. 
D) A tariff leaves the price of imports unchanged. 
E) A tariff decreases domestic consumption. 
A) A tariff increases domestic production. 
B) A tariff creates revenue for the government. 
C) A tariff decreases international trade. 
D) A tariff leaves the price of imports unchanged. 
E) A tariff decreases domestic consumption.

Question 11

Canada imports cars from Japan.If Canada imposes a tariff on cars imported from Japan,Canadian

Accepted Answer

A) consumers will lose and Japanese producers will gain. 
B) tariff revenue will equal the loss of Canadian consumers. 
C) consumers will lose and Canadian producers will gain. 
D) car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers. 
E) producers will lose and Japanese consumers will gain. 
A) consumers will lose and Japanese producers will gain. 
B) tariff revenue will equal the loss of Canadian consumers. 
C) consumers will lose and Canadian producers will gain. 
D) car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers. 
E) producers will lose and Japanese consumers will gain.

Question 12

Economists usually agree with which of the following arguments that favour protectionism?

Accepted Answer

A) the competition with cheap foreign labour defence 
B) the job protection defence 
C) the dumping defence 
D) the infant-industry defence 
E) None of the above.Economists generally agree that arguments in favor of protection are flawed. 
A) the competition with cheap foreign labour defence 
B) the job protection defence 
C) the dumping defence 
D) the infant-industry defence 
E) None of the above.Economists generally agree that arguments in favor of protection are flawed.

Question 13

Who benefits from imports?

Accepted Answer

A) domestic consumers 
B) domestic producers 
C) foreign consumers 
D) domestic workers in the industry 
E) everyone benefits 
A) domestic consumers 
B) domestic producers 
C) foreign consumers 
D) domestic workers in the industry 
E) everyone benefits

Question 14

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 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 15

If Canada imposes a tariff on imported steel,the tariff

Accepted Answer

A) raises the Canadian price of imported steel. 
B) decreases the Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) all of the above. 
A) raises the Canadian price of imported steel. 
B) decreases the Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) all of the above.

Question 16

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 17

A tariff is imposed on a good.This ________ the quantity supplied,________ the quantity demanded,and ________ the price in the home country.

Accepted Answer

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

Question 18

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,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 19

If Canada imposes a tariff on imported steel,the tariff

Accepted Answer

A) raises the Canadian price of imported steel. 
B) decreases Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) both B and D are correct. 
A) raises the Canadian price of imported steel. 
B) decreases Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) both B and D are correct.

Question 20

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

Exam 31:International Trade Policy

Consider a market that sells some of its goods as exports.Who does NOT benefit?

If Canada imposes a tariff of $1 per imported shirt,the tariff

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

Which of the following are valid reasons advanced by almost all economists? Protection

An import quota directly restricts ________ and is designed to protect domestic ________.

Rent seeking is one reason why countries choose to

When a tariff is imposed,the gap between the domestic price and the price received in the exporting country is captured by

In a market that moves from a situation of no trade to a situation where a good is exported,the price of the good ________ and the quantity produced by the domestic industry ________.

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

Which of the following statements concerning tariffs is NOT true?

Canada imports cars from Japan.If Canada imposes a tariff on cars imported from Japan,Canadian

Economists usually agree with which of the following arguments that favour protectionism?

Who benefits from imports?

If Canada imposes a tariff on imported steel,the tariff

Offshore outsourcing occurs when a firm in Canada ________.

A tariff is imposed on a good.This ________ the quantity supplied,________ the quantity demanded,and ________ the price in the home country.

If Canada imposes a tariff on imported steel,the tariff

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

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

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

An import quota directly restricts and is designed to protect domestic .

In a market that moves from a situation of no trade to a situation where a good is exported,the price of the good and the quantity produced by the domestic industry .

A tariff is imposed on a good.This the quantity supplied, the quantity demanded,and the price in the home country.

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