Question 1

International trade is most likely to occur whenever:

Accepted Answer

A) nations have an absolute advantage in the production of goods. 
B) all of the trading nations are self-sufficient. 
C) world production equals world consumption. 
D) each of the trading nations gains from trade. 
E) labor is cheaper abroad. 
A) nations have an absolute advantage in the production of goods. 
B) all of the trading nations are self-sufficient. 
C) world production equals world consumption. 
D) each of the trading nations gains from trade. 
E) labor is cheaper abroad.

Question 2

The following graph shows U.S.demand for and supply of a good.Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of imported good.In such a case,net welfare loss as a result of a tariff of $0.50 per unit is represented by the area ____.

Accepted Answer

A) c + i + e + f 
B) i + f 
C) i 
D) f 
E) b + d 
A) c + i + e + f 
B) i + f 
C) i 
D) f 
E) b + d

Question 3

Differences in resource endowments are differences in:

Accepted Answer

A) tariffs charged by each country. 
B) consumption patterns across nations. 
C) production patterns across nations. 
D) the quantity,but not the quality,of resources available in different nations. 
E) the quality and quantity of resources available in different nations. 
A) tariffs charged by each country. 
B) consumption patterns across nations. 
C) production patterns across nations. 
D) the quantity,but not the quality,of resources available in different nations. 
E) the quality and quantity of resources available in different nations.

Question 4

The following graph shows the demand for and the supply of a good in a country.If the world price of the good is $2.00 per unit and an import quota of 50 units per month is imposed,the welfare loss resulting from higher domestic production costs is represented by the area _____.

Accepted Answer

A) a 
B) b 
C) c and d 
D) g and h 
E) e 
A) a 
B) b 
C) c and d 
D) g and h 
E) e

Question 5

The following graph shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of imported good.In such a case,the gain in producer surplus as a result of a tariff of $0.50 per unit is represented by the area _____.

Accepted Answer

A) c + h 
B) h 
C) c 
D) c + g 
E) g 
A) c + h 
B) h 
C) c 
D) c + g 
E) g

Question 6

The difference between the effects of an import quota and a tariff is that:

Accepted Answer

A) only the tariff results in a higher domestic price. 
B) only the quota decreases the amount of goods imported. 
C) the decrease in producer surplus is smaller with the quota. 
D) under a quota,part of the decrease in consumer surplus is redistributed to foreign producers;under a tariff,it is redistributed to the domestic government. 
E) under a tariff,part of the decrease in consumer surplus is redistributed to foreign producers;under a quota,it is redistributed to the domestic government. 
A) only the tariff results in a higher domestic price. 
B) only the quota decreases the amount of goods imported. 
C) the decrease in producer surplus is smaller with the quota. 
D) under a quota,part of the decrease in consumer surplus is redistributed to foreign producers;under a tariff,it is redistributed to the domestic government. 
E) under a tariff,part of the decrease in consumer surplus is redistributed to foreign producers;under a quota,it is redistributed to the domestic government.

Question 7

The following table shows per-day production data of rice and T-shirts for two countries,Cambria and Bodoni.Based on the table,it can be said that Bodoni should produce rice and trade their rice for Cambria's T-shirts.
Table 19.1
?
 $$\begin{array} { | c | c | c | c | } 
\hline { \text { Cambria } } & & { \text { Bodoni } } \
\hline \begin{array} { c } 
\text { Tons of rice per } \
\text { day }
\end{array} & \text { T-shirts per day } & \begin{array} { c } 
\text { Tons of rice per } \
\text { day }
\end{array} & \text { T-shirts per day } \
\hline 20 & 0 & 100 & 0 \
\hline 0 & 800 & 0 & 1000 \
\hline
\end{array}$$

Accepted Answer

A) True 
 B)False

Question 8

The United States is a major exporter of _____.

Accepted Answer

A) diamonds 
B) bananas 
C) coffee 
D) corn 
E) gold 
A) diamonds 
B) bananas 
C) coffee 
D) corn 
E) gold

Question 9

Suppose workers in Transylvania can produce only two goods-yo-yos or sweatsocks.If the Transylvanian currency is the daler,then the opportunity cost of producing yo-yos is measured in terms of _____.

Accepted Answer

A) dalers 
B) dalers per yo-yo 
C) dalers per sweatsock 
D) yo-yos 
E) sweatsocks 
A) dalers 
B) dalers per yo-yo 
C) dalers per sweatsock 
D) yo-yos 
E) sweatsocks

Question 10

Tariffs and quotas:

Accepted Answer

A) reduce consumer surplus and increase producer surplus in the importing country. 
B) increase consumer surplus and reduce producer surplus in the importing country. 
C) reduce both consumer surplus and producer surplus in the exporting country. 
D) are imposed when there are differences in the opportunity cost of production across countries. 
E) are imposed when production is subject to economies of scale. 
A) reduce consumer surplus and increase producer surplus in the importing country. 
B) increase consumer surplus and reduce producer surplus in the importing country. 
C) reduce both consumer surplus and producer surplus in the exporting country. 
D) are imposed when there are differences in the opportunity cost of production across countries. 
E) are imposed when production is subject to economies of scale.

Question 11

Some industries have argued that since their output is vital for national defense,_____.

Accepted Answer

A) they should be entitled to additional trade protection 
B) they should make special deals among themselves and discriminate against outsiders 
C) they are more vulnerable to fiscal deficits 
D) they should be given more time to grow to become competitive 
E) they protect domestic jobs and wage levels 
A) they should be entitled to additional trade protection 
B) they should make special deals among themselves and discriminate against outsiders 
C) they are more vulnerable to fiscal deficits 
D) they should be given more time to grow to become competitive 
E) they protect domestic jobs and wage levels

Question 12

If a manufacturer sells goods abroad for a lesser price than they sell for at home,it implies that _____.

Accepted Answer

A) an embargo has been established 
B) a quota has been imposed 
C) the manufacturer is engaged in dumping 
D) there has been an improvement in the terms of trade 
E) tariffs have been reduced 
A) an embargo has been established 
B) a quota has been imposed 
C) the manufacturer is engaged in dumping 
D) there has been an improvement in the terms of trade 
E) tariffs have been reduced

Question 13

The following table shows per-day production data of rice and T-shirts for two countries,Cambria and Bodoni.Based on the table,it can be said that the opportunity cost of a ton of rice in Bodoni is _____.
Table 19.1
?
$$\begin{array} { | c | c | c | c | } 
\hline  { \text { Cambria } } & & { \text { Bodoni } } \
\hline \begin{array} { c } 
\text { Tons of rice per } \
\text { day }
\end{array} & \text { T-shirts per day } & \begin{array} { c } 
\text { Tons of rice per } \
\text { day }
\end{array} & \text { T-shirts per day } \
\hline 20 & 0 & 100 & 0 \
\hline 18 & 80 & 90 & 100 \
\hline 16 & 160 & 80 & 200 \
\hline 14 & 240 & 70 & 300 \
\hline 12 & 320 & 60 & 400 \
\hline 10 & 400 & 50 & 500 \
\hline 8 & 480 & 40 & 600 \
\hline 6 & 560 & 30 & 700 \
\hline 4 & 640 & 20 & 800 \
\hline 2 & 720 & 10 & 900 \
\hline 0 & 800 & 0 & 1,000 \
\hline
\end{array}$$

Accepted Answer

A) 20 T-shirts 
B) 3 T-shirts 
C) 4 T-shirts 
D) 10 T-shirts 
E) 2 T-shirts 
A) 20 T-shirts 
B) 3 T-shirts 
C) 4 T-shirts 
D) 10 T-shirts 
E) 2 T-shirts

Question 14

The following table shows per-day production data of rice and T-shirts for two countries,Cambria and Bodoni.Based on the table,it can be said that Bodoni has a comparative advantage in the production of rice.
Table 19.1
?
 $$\begin{array} { | c | c | c | c | } 
\hline { \text { Cambria } } & & { \text { Bodoni } } \
\hline \begin{array} { c } 
\text { Tons of rice per } \
\text { day }
\end{array} & \text { T-shirts per day } & \begin{array} { c } 
\text { Tons of rice per } \
\text { day }
\end{array} & \text { T-shirts per day } \
\hline 20 & 0 & 100 & 0 \
\hline 0 & 800 & 0 & 1000 \
\hline
\end{array}$$

Accepted Answer

A) True 
 B)False

Question 15

International trade increases the variety of goods and services available in a country.

Accepted Answer

A) True 
 B)False

Question 16

In 2012,exports amounted to about 14 percent of U.S.GDP.

Accepted Answer

A) True 
 B)False

Question 17

For each pound of blueberry cheesecake Abura produces,it gives up the opportunity to make 150 screwdrivers.Mayo can produce one pound of blueberry cheesecake for every 300 screwdrivers it produces.If specialization and trade were to occur between these two countries,which of the following is true with regard to opportunity costs in the two countries?

Accepted Answer

A) The opportunity cost of producing cheesecakes is lower in Abura than Mayo. 
B) The opportunity cost of producing screwdrivers is lower in Abura than Mayo. 
C) The opportunity cost of producing cheesecakes is identical in both countries. 
D) The opportunity cost of producing screwdrivers is higher in Abura than Mayo. 
E) In Mayo,the opportunity cost of producing one unit of screwdriver is one pound of cheesecake. 
A) The opportunity cost of producing cheesecakes is lower in Abura than Mayo. 
B) The opportunity cost of producing screwdrivers is lower in Abura than Mayo. 
C) The opportunity cost of producing cheesecakes is identical in both countries. 
D) The opportunity cost of producing screwdrivers is higher in Abura than Mayo. 
E) In Mayo,the opportunity cost of producing one unit of screwdriver is one pound of cheesecake.

Question 18

An effective import quota:

Accepted Answer

A) lowers the price of imports. 
B) lowers the price of domestic goods competing with imports. 
C) increases the variety of goods available to the consumer. 
D) increases federal revenues. 
E) lowers the quantity of the imported good. 
A) lowers the price of imports. 
B) lowers the price of domestic goods competing with imports. 
C) increases the variety of goods available to the consumer. 
D) increases federal revenues. 
E) lowers the quantity of the imported good.

Question 19

Quotas are favoured over free international trade by:

Accepted Answer

A) consumers in the importing country and consumers in the exporting country. 
B) domestic producers in the importing country and foreign producers with quota rights. 
C) domestic producers and domestic consumers in the exporting country. 
D) foreign producers without quota rights and consumers in the importing country. 
E) foreign consumers and domestic producers in the exporting country. 
A) consumers in the importing country and consumers in the exporting country. 
B) domestic producers in the importing country and foreign producers with quota rights. 
C) domestic producers and domestic consumers in the exporting country. 
D) foreign producers without quota rights and consumers in the importing country. 
E) foreign consumers and domestic producers in the exporting country.

Question 20

Which of the following is not a reason for international specialization?

Accepted Answer

A) Some countries have educated,trained workers,while other countries have unskilled workers. 
B) Tastes and preferences tend to be different in different countries. 
C) Economies of scale can allow larger,specialized producers to operate at lower average cost. 
D) People prefer having a choice of products. 
E) The world price of a good is determined by the world supply and demand for it. 
A) Some countries have educated,trained workers,while other countries have unskilled workers. 
B) Tastes and preferences tend to be different in different countries. 
C) Economies of scale can allow larger,specialized producers to operate at lower average cost. 
D) People prefer having a choice of products. 
E) The world price of a good is determined by the world supply and demand for it.

International trade is most likely to occur whenever:

Differences in resource endowments are differences in:

The following graph shows the demand for and the supply of a good in a country.If the world price of the good is $2.00 per unit and an import quota of 50 units per month is imposed,the welfare loss resulting from higher domestic production costs is represented by the area _____.

The difference between the effects of an import quota and a tariff is that:

The United States is a major exporter of _____.

Suppose workers in Transylvania can produce only two goods-yo-yos or sweatsocks.If the Transylvanian currency is the daler,then the opportunity cost of producing yo-yos is measured in terms of _____.

Tariffs and quotas:

Some industries have argued that since their output is vital for national defense,_____.

If a manufacturer sells goods abroad for a lesser price than they sell for at home,it implies that _____.

International trade increases the variety of goods and services available in a country.

In 2012,exports amounted to about 14 percent of U.S.GDP.

An effective import quota:

Quotas are favoured over free international trade by:

Which of the following is not a reason for international specialization?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Finance

Economic Development

Filters

Exam 17: International Trade

International trade is most likely to occur whenever:

Differences in resource endowments are differences in:

The following graph shows the demand for and the supply of a good in a country.If the world price of the good is $2.00 per unit and an import quota of 50 units per month is imposed,the welfare loss resulting from higher domestic production costs is represented by the area _____.

The difference between the effects of an import quota and a tariff is that:

The United States is a major exporter of _____.

Suppose workers in Transylvania can produce only two goods-yo-yos or sweatsocks.If the Transylvanian currency is the daler,then the opportunity cost of producing yo-yos is measured in terms of _____.

Tariffs and quotas:

Some industries have argued that since their output is vital for national defense,_____.

If a manufacturer sells goods abroad for a lesser price than they sell for at home,it implies that _____.

International trade increases the variety of goods and services available in a country.

In 2012,exports amounted to about 14 percent of U.S.GDP.

An effective import quota:

Quotas are favoured over free international trade by:

Which of the following is not a reason for international specialization?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Finance

Economic Development

Filters