Question 1

If two nations have straight-line production possibilities curves,

Accepted Answer

A) then their trading possibilities curves must lie inside the production possibilities curves. 
B) there will be no basis for mutually advantageous trade. 
C) there will be a basis for mutually advantageous trade whether the slopes are equal or not. 
D) there will be a basis for mutually advantageous trade provided the slopes differ. 
A) then their trading possibilities curves must lie inside the production possibilities curves. 
B) there will be no basis for mutually advantageous trade. 
C) there will be a basis for mutually advantageous trade whether the slopes are equal or not. 
D) there will be a basis for mutually advantageous trade provided the slopes differ.

Question 2

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n)

Accepted Answer

A) protective tariff. 
B) export subsidy. 
C) import quota. 
D) voluntary export restriction. 
A) protective tariff. 
B) export subsidy. 
C) import quota. 
D) voluntary export restriction.

Question 3

The following are commonly used arguments for protection against imports, except

Accepted Answer

A) self-sufficiency and diversification-for-stability. 
B) protection against dumping. 
C) infant industry protection. 
D) price- and profit-maintenance. 
A) self-sufficiency and diversification-for-stability. 
B) protection against dumping. 
C) infant industry protection. 
D) price- and profit-maintenance.

Question 4

A major goal of the World Trade Organization is to

Accepted Answer

A) increase the protection of producers against foreign trade competition. 
B) encourage bilateral trade agreements between nations. 
C) liberalize international trade among nations. 
D) maximize tariff revenue for governments. 
A) increase the protection of producers against foreign trade competition. 
B) encourage bilateral trade agreements between nations. 
C) liberalize international trade among nations. 
D) maximize tariff revenue for governments.

Question 5

"The nation needs to prevent foreign nations from selling their excess goods in our nation at a price below cost so we can save American firms." This quotation would be most closely associated with which protectionist argument?

Accepted Answer

A) increase domestic employment 
B) protection against dumping 
C) strategic trade policy 
D) cheap foreign labor 
A) increase domestic employment 
B) protection against dumping 
C) strategic trade policy 
D) cheap foreign labor

Question 6

Which country is the United States' largest trading partner in terms of volume of trade?

Accepted Answer

A) Mexico 
B) Japan 
C) China 
D) Canada 
A) Mexico 
B) Japan 
C) China 
D) Canada

Question 7

In a two-nation, two-good world, if one nation is more efficient in producing both goods than the other nation, then the more-efficient nation cannot gain from trading with the other nation.

Accepted Answer

A) True 
 B)False

Question 8

Suppose the United States sets a limit on the number of tons of sugar that can be imported each year.This is an example of a(n)

Accepted Answer

A) protective tariff. 
B) revenue tariff. 
C) voluntary export restriction. 
D) import quota. 
A) protective tariff. 
B) revenue tariff. 
C) voluntary export restriction. 
D) import quota.

Question 9

The so-called eurozone refers to

Accepted Answer

A) all members of the European Union. 
B) the EU nations that have adopted a common currency. 
C) the combined Eastern and Western Europe. 
D) nations in Europe where the U.S.has military bases. 
A) all members of the European Union. 
B) the EU nations that have adopted a common currency. 
C) the combined Eastern and Western Europe. 
D) nations in Europe where the U.S.has military bases.

Question 10

The production possibilities for country X are either 6,000 bushels of soybeans or 10,000 bushels of wheat.The production possibilities for country Y are either 2,000 bushels of soybeans or 4,000 bushels of wheat.Which of the following is true?

Accepted Answer

A) Country Y should specialize in the growing of soybeans according to the principle of comparative advantage. 
B) Country X is the least-cost producer of wheat. 
C) The domestic opportunity cost of wheat production is lower in country Y. 
D) The high-cost producer of soybeans is country X. 
A) Country Y should specialize in the growing of soybeans according to the principle of comparative advantage. 
B) Country X is the least-cost producer of wheat. 
C) The domestic opportunity cost of wheat production is lower in country Y. 
D) The high-cost producer of soybeans is country X.

Question 11

The number of countries belonging to the World Trade Organization (WTO), as of 2015, is about

Accepted Answer

A) 161. 
B) 125. 
C) 80. 
D) 202. 
A) 161. 
B) 125. 
C) 80. 
D) 202.

Question 12

The World Trade Organization was established as a successor to

Accepted Answer

A) GATT. 
B) NAFTA. 
C) the EU. 
D) the Doha Development Agenda. 
A) GATT. 
B) NAFTA. 
C) the EU. 
D) the Doha Development Agenda.

Question 13

If two nations specialize in their respective comparative advantage and then trade with each other, both nations can consume output-combinations that are beyond their production possibilities curves.

Accepted Answer

A) True 
 B)False

Question 14

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are
60X and 40Y.Therefore, Alpha should specialize in Y and Beta in X.

Accepted Answer

A) True 
 B)False

Question 15

Export supply curves are ; import demand curves are .

Accepted Answer

A) horizontal; vertical 
B) vertical; horizontal 
C) downsloping; upsloping 
D) upsloping; downsloping 
A) horizontal; vertical 
B) vertical; horizontal 
C) downsloping; upsloping 
D) upsloping; downsloping

Question 16

The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

Accepted Answer

A) the production possibilities curves of any two nations are identical. 
B) a nation's production possibilities and trading possibilities lines coincide. 
C) a nation's trading possibilities line lies to the right of its production possibilities line. 
D) a nation's production possibilities line lies to the right of its trading possibilities line. 
A) the production possibilities curves of any two nations are identical. 
B) a nation's production possibilities and trading possibilities lines coincide. 
C) a nation's trading possibilities line lies to the right of its production possibilities line. 
D) a nation's production possibilities line lies to the right of its trading possibilities line.

Question 17

Studies show that

Accepted Answer

A) it is impossible to estimate the benefits of trade barriers. 
B) costs and benefits of trade barriers are about equal. 
C) benefits of trade barriers exceed their costs in developing nations. 
D) costs of trade barriers exceed their benefits, creating an efficiency loss for society. 
A) it is impossible to estimate the benefits of trade barriers. 
B) costs and benefits of trade barriers are about equal. 
C) benefits of trade barriers exceed their costs in developing nations. 
D) costs of trade barriers exceed their benefits, creating an efficiency loss for society.

Question 18

The World Trade Organization

Accepted Answer

A) is also known as the International Monetary Fund (IMF). 
B) is also known as NAFTA. 
C) was established to resolve disputes arising under world trade rules. 
D) enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit. 
A) is also known as the International Monetary Fund (IMF). 
B) is also known as NAFTA. 
C) was established to resolve disputes arising under world trade rules. 
D) enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.

Question 19

In 2014, the United States was the largest exporter in the world.

Accepted Answer

A) True 
 B)False

Question 20

Whenever a foreign producer is selling a product like steel at a lower price than domestic producers, then dumping is being practiced and must be corrected.Topic: The Case for Protection: A Critical Review

Accepted Answer

A) True 
 B)False

Exam 40: International Trade

If two nations have straight-line production possibilities curves,

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n)

The following are commonly used arguments for protection against imports, except

A major goal of the World Trade Organization is to

"The nation needs to prevent foreign nations from selling their excess goods in our nation at a price below cost so we can save American firms." This quotation would be most closely associated with which protectionist argument?

Which country is the United States' largest trading partner in terms of volume of trade?

In a two-nation, two-good world, if one nation is more efficient in producing both goods than the other nation, then the more-efficient nation cannot gain from trading with the other nation.

Suppose the United States sets a limit on the number of tons of sugar that can be imported each year.This is an example of a(n)

The so-called eurozone refers to

The production possibilities for country X are either 6,000 bushels of soybeans or 10,000 bushels of wheat.The production possibilities for country Y are either 2,000 bushels of soybeans or 4,000 bushels of wheat.Which of the following is true?

The number of countries belonging to the World Trade Organization (WTO), as of 2015, is about

The World Trade Organization was established as a successor to

If two nations specialize in their respective comparative advantage and then trade with each other, both nations can consume output-combinations that are beyond their production possibilities curves.

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are 60X and 40Y.Therefore, Alpha should specialize in Y and Beta in X.

Export supply curves are ; import demand curves are .

The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

Studies show that

The World Trade Organization

In 2014, the United States was the largest exporter in the world.

Whenever a foreign producer is selling a product like steel at a lower price than domestic producers, then dumping is being practiced and must be corrected.Topic: The Case for Protection: A Critical Review

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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