Question 1

The terms of trade will favor a larger nation over a smaller nation.

Accepted Answer

A) True 
 B)False

Question 2

Globalization of resource markets has resulted in the business practice of offshoring, which involves

Accepted Answer

A) only an outflow of jobs away from the U.S. 
B) no possible expansion of jobs in the U.S. 
C) huge losses to consumers in the U.S. 
D) both an outflow as well as an inflow of jobs in the U.S. 
A) only an outflow of jobs away from the U.S. 
B) no possible expansion of jobs in the U.S. 
C) huge losses to consumers in the U.S. 
D) both an outflow as well as an inflow of jobs in the U.S.

Question 3

As of 2015, how many European nations belonged to the European Union (EU)?

Accepted Answer

A) All of the nations of Europe automatically belong to the EU. 
B) 17 
C) 28 
D) 10 
A) All of the nations of Europe automatically belong to the EU. 
B) 17 
C) 28 
D) 10

Question 4

An export subsidy for a product will benefit

Accepted Answer

A) domestic consumers of the product. 
B) foreign producers of the product. 
C) foreign consumers of the product. 
D) the domestic taxpayers. 
A) domestic consumers of the product. 
B) foreign producers of the product. 
C) foreign consumers of the product. 
D) the domestic taxpayers.

Question 5

Which of the following is an example of a capital-intensive commodity?

Accepted Answer

A) clothing 
B) wool 
C) sunflower seeds 
D) chemicals 
A) clothing 
B) wool 
C) sunflower seeds 
D) chemicals

Question 6

In Germany, one worker can produce either one cuckoo clock or one beer mug.In Taiwan, one worker can produce either two cuckoo clocks or three beer mugs.Who has the comparative advantage in each good?

Accepted Answer

A) Taiwan in both goods 
B) Taiwan in clocks and Germany in mugs 
C) Germany in clocks and Taiwan in mugs 
D) Germany in both goods 
A) Taiwan in both goods 
B) Taiwan in clocks and Germany in mugs 
C) Germany in clocks and Taiwan in mugs 
D) Germany in both goods

Question 7

If the world price of a product rises relative to the domestic price in a trading nation, then, for that product,

Accepted Answer

A) exports and imports will increase. 
B) exports and imports will decrease. 
C) exports will increase and imports will decrease. 
D) imports will increase and exports will decrease. 
A) exports and imports will increase. 
B) exports and imports will decrease. 
C) exports will increase and imports will decrease. 
D) imports will increase and exports will decrease.

Question 8

Import tariffs benefit the consumers of the product involved.

Accepted Answer

A) True 
 B)False

Question 9

A key difference between import quotas and voluntary export restraints (VERs) is that the

Accepted Answer

A) domestic government administers the former, whereas the foreign government administers the latter. 
B) foreign government administers the former, whereas the domestic government administers the latter. 
C) one is a tax, whereas the other is a quantity limit. 
D) one raises the price of the imported product involved, whereas the other one does not. 
A) domestic government administers the former, whereas the foreign government administers the latter. 
B) foreign government administers the former, whereas the domestic government administers the latter. 
C) one is a tax, whereas the other is a quantity limit. 
D) one raises the price of the imported product involved, whereas the other one does not.

Question 10

Which of the following countries had the smallest share of exports as a percentage of GDP in 2014?

Accepted Answer

A) Canada 
B) France 
C) United Kingdom 
D) United States 
A) Canada 
B) France 
C) United Kingdom 
D) United States

Question 11

A nation's export supply curve is downsloping, and its import demand curve is upsloping.

Accepted Answer

A) True 
 B)False

Question 12

Tariffs and quotas are costly to consumers because

Accepted Answer

A) the price of the imported good falls. 
B) the supply of the imported good increases. 
C) import competition increases for domestic goods. 
D) consumers have to switch to higher-priced domestic goods. 
A) the price of the imported good falls. 
B) the supply of the imported good increases. 
C) import competition increases for domestic goods. 
D) consumers have to switch to higher-priced domestic goods.

Question 13

Which of the following is an example of a land-intensive commodity?

Accepted Answer

A) chemicals 
B) autos 
C) watches 
D) wool 
A) chemicals 
B) autos 
C) watches 
D) wool

Question 14

Which nation had the largest share of world exports in 2014?

Accepted Answer

A) Japan 
B) Germany 
C) China 
D) United States 
A) Japan 
B) Germany 
C) China 
D) United States

Question 15

Which of the following statements is false?

Accepted Answer

A) Studies show that developing nations that have relied on import restrictions to protect domestic industries have had higher growth rates than similar nations pursuing more open economic policies. 
B) The U.S.Constitution forbids individual states from levying tariffs. 
C) The high tariffs of the Smoot-Hawley Act of 1930 and the retaliation they caused worsened the Great Depression. 
D) The European Union has enhanced prosperity in Western Europe. 
A) Studies show that developing nations that have relied on import restrictions to protect domestic industries have had higher growth rates than similar nations pursuing more open economic policies. 
B) The U.S.Constitution forbids individual states from levying tariffs. 
C) The high tariffs of the Smoot-Hawley Act of 1930 and the retaliation they caused worsened the Great Depression. 
D) The European Union has enhanced prosperity in Western Europe.

Question 16

Economists generally view offshoring as detrimental to the U.S.economy.

Accepted Answer

A) True 
 B)False

Question 17

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a valid counterargument to a call for higher tariffs "to save U.S.jobs"?

Accepted Answer

A) The government needs to protect U.S.workers from the dumping of foreign products. 
B) Strategic trade policy calls for equal treatment of all trading nations so that they will have the same competitive conditions. 
C) U.S.firms and workers must be protected from the ruinous competition of nations where wages for workers are low. 
D) Imports may eliminate some U.S.jobs, but they create others, so they may have little or no effect on employment. 
A) The government needs to protect U.S.workers from the dumping of foreign products. 
B) Strategic trade policy calls for equal treatment of all trading nations so that they will have the same competitive conditions. 
C) U.S.firms and workers must be protected from the ruinous competition of nations where wages for workers are low. 
D) Imports may eliminate some U.S.jobs, but they create others, so they may have little or no effect on employment.

Question 19

Tariffs and import quotas would benefit the following groups, except

Accepted Answer

A) consumers of the product. 
B) domestic producers of the product. 
C) workers in domestic firms producing the product. 
D) the government of the importing country. 
A) consumers of the product. 
B) domestic producers of the product. 
C) workers in domestic firms producing the product. 
D) the government of the importing country.

Question 20

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that

Accepted Answer

A) labor costs and product prices are not related. 
B) there is no discernible relationship between wage rates and labor productivity. 
C) wage rates and labor productivity are directly related. 
D) wage rates and labor productivity are inversely related. 
A) labor costs and product prices are not related. 
B) there is no discernible relationship between wage rates and labor productivity. 
C) wage rates and labor productivity are directly related. 
D) wage rates and labor productivity are inversely related.

Exam 40: International Trade

The terms of trade will favor a larger nation over a smaller nation.

Globalization of resource markets has resulted in the business practice of offshoring, which involves

As of 2015, how many European nations belonged to the European Union (EU)?

An export subsidy for a product will benefit

Which of the following is an example of a capital-intensive commodity?

In Germany, one worker can produce either one cuckoo clock or one beer mug.In Taiwan, one worker can produce either two cuckoo clocks or three beer mugs.Who has the comparative advantage in each good?

If the world price of a product rises relative to the domestic price in a trading nation, then, for that product,

Import tariffs benefit the consumers of the product involved.

A key difference between import quotas and voluntary export restraints (VERs) is that the

Which of the following countries had the smallest share of exports as a percentage of GDP in 2014?

A nation's export supply curve is downsloping, and its import demand curve is upsloping.

Tariffs and quotas are costly to consumers because

Which of the following is an example of a land-intensive commodity?

Which nation had the largest share of world exports in 2014?

Which of the following statements is false?

Economists generally view offshoring as detrimental to the U.S.economy.

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.

Which of the following is a valid counterargument to a call for higher tariffs "to save U.S.jobs"?

Tariffs and import quotas would benefit the following groups, except

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that

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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