Question 1

What is mercantilism? What are the draw backs of this doctrine?

Accepted Answer

Mercantilism is a doctrine that holds th

Question 2

A country that must inhibit imports should give preference to

Accepted Answer

A)  quotas over tariffs because quotas are less likely to distort trade patterns between nations. 
B)  tariffs over quotas because, unlike quotas, tariffs offer no special benefits to inefficient exporters. 
C)  export subsidies over quotas or tariffs because export subsidies can protect a nation's domestic producers. 
D)  an embargo wherever possible because an embargo can serve as a political weapon in addition to being a "trade stopper." 
A)  quotas over tariffs because quotas are less likely to distort trade patterns between nations. 
B)  tariffs over quotas because, unlike quotas, tariffs offer no special benefits to inefficient exporters. 
C)  export subsidies over quotas or tariffs because export subsidies can protect a nation's domestic producers. 
D)  an embargo wherever possible because an embargo can serve as a political weapon in addition to being a "trade stopper."

Question 3

A restriction of imports that is accomplished by a quota normally

Accepted Answer

A)  can be accomplished also by a tariff. 
B)  cannot be replicated exactly by imposing a tariff. 
C)  can be accomplished also by an export subsidy. 
D)  can be accomplished also by negotiations within GATT. 
A)  can be accomplished also by a tariff. 
B)  cannot be replicated exactly by imposing a tariff. 
C)  can be accomplished also by an export subsidy. 
D)  can be accomplished also by negotiations within GATT.

Question 4

Figure 18-9
  
-In Figure 18-9, at price OC total quantity demanded exceeds quantity supplied and price will rise to

Accepted Answer

A)  OJ in Pastaland. 
B)  OA in Pestoland. 
C)  OA in both countries. 
D)  OJ in both countries. 
A)  OJ in Pastaland. 
B)  OA in Pestoland. 
C)  OA in both countries. 
D)  OJ in both countries.

Question 5

If one country has an absolute advantage in every commodity, there is no reason for it to trade.

Accepted Answer

A) True 
 B)False

Question 6

An export subsidy is a payment by the government to exporters to permit them to charge lower prices.

Accepted Answer

A) True 
 B)False

Question 7

If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to

Accepted Answer

A)  raise the price and reduce the quantity of imports. 
B)  raise the price and the quantity of imports. 
C)  lower the price and the quantity of imports. 
D)  raise the quantity and reduce the price of imports. 
A)  raise the price and reduce the quantity of imports. 
B)  raise the price and the quantity of imports. 
C)  lower the price and the quantity of imports. 
D)  raise the quantity and reduce the price of imports.

Question 8

"Dumping" means destroying goods to prevent driving down the price.

Accepted Answer

A) True 
 B)False

Question 9

A tariff affects imports

Accepted Answer

A)  by limiting quantity and raising price to a higher level. 
B)  by reducing quantity demanded so that supply falls. 
C)  by increasing supply, raising price, and reducing demand. 
D)  by raising price and reducing quantity demanded. 
A)  by limiting quantity and raising price to a higher level. 
B)  by reducing quantity demanded so that supply falls. 
C)  by increasing supply, raising price, and reducing demand. 
D)  by raising price and reducing quantity demanded.

Question 10

Is the call for protection on the basis of national defense valid?

Accepted Answer

A)  No, because protection has no place in national defense. 
B)  No, protection is always improper. 
C)  Uncertain, economic theory has no answer to this question. 
D)  Yes, although it can be overstated and abused. 
A)  No, because protection has no place in national defense. 
B)  No, protection is always improper. 
C)  Uncertain, economic theory has no answer to this question. 
D)  Yes, although it can be overstated and abused.

Question 11

If a nation can produce greater quantities of a good than another nation, it has a(n)

Accepted Answer

A)  comparative advantage. 
B)  absolute advantage. 
C)  declarative advantage. 
D)  entire advantage. 
A)  comparative advantage. 
B)  absolute advantage. 
C)  declarative advantage. 
D)  entire advantage.

Question 12

The essential logic behind international trade is not different from that underlying trade among different states.Why, then, do we study international trade as a special subject?

Accepted Answer

There are at least three reasons.
1.Dome

Question 13

Compare and contrast the effects of a quota and a tariff on imports.Be sure to include both short-run and long-run effects in your answer.

Accepted Answer

A quota is a quantity restriction on imp

Question 14

At least two demand curves are present in an international equilibrium model.

Accepted Answer

A) True 
 B)False

Question 15

How extensively does the United States use quotas?

Accepted Answer

A)  Very little; there are few quotas on imports. 
B)  Selectively; there are more quotas than most people realize. 
C)  Widely; quotas are extensive and cover a wide range of goods. 
D)  Widely; although the United States prefers to use tariffs, which cover a wide range of goods. 
A)  Very little; there are few quotas on imports. 
B)  Selectively; there are more quotas than most people realize. 
C)  Widely; quotas are extensive and cover a wide range of goods. 
D)  Widely; although the United States prefers to use tariffs, which cover a wide range of goods.

Question 16

Figure 18-8
  
-Figure 18-8 has four sets of production possibility curves for two hypothetical countries.In which case will there be no advantage to trade between the two countries?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 17

Table 18-4
 $\begin{array}{ccccccc}
\text { Quantity }&\text { Quantity }&\text { Quantity }&\text { Quantity }&\
\text { Price per } & \text { Demanded } & \text { Supplied } & \text { Demanded } & \text { Supplied } \
\text { TV } & \text { in United States } & \text { in United States } & \text { Japan } & \text { Japan } \
\underline {\text { (dollars) }} &\underline { \text { (thousands) }} & \underline { \text { (thousands) }}  &\underline { \text { (thousands) }} & \underline { \text { (thousands) }}  \
100 & 100 & 10 & 100 & 25 \
200 & 85 & 20 & 85 & 50 \
300 & 70 & 30 & 70 & 70 \
400 & 60 & 40 & 60 & 80 \
500 & 50 & 50& 50 & 90 \
600 & 40 & 60 & 40 & 100 \
700 & 30 & 70 & 30 & 110 \
800 & 30 & 80 & 20 & 120
\end{array}$
-Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other, which country will export television sets and how many?

Accepted Answer

A)  Japan will export 20,000 television sets to the United States. 
B)  Japan will export 30,000 television sets to the United States. 
C)  The United States will export 20,000 television sets to Japan. 
D)  The United States will export 40,000 television sets to Japan. 
A)  Japan will export 20,000 television sets to the United States. 
B)  Japan will export 30,000 television sets to the United States. 
C)  The United States will export 20,000 television sets to Japan. 
D)  The United States will export 40,000 television sets to Japan.

Question 18

Suppose that the citizens of South Dakota decided to limit imports of citrus fruit from Florida and California on the grounds that climatic differences give those two states an unfair advantage in the production of those products.How would the analysis used to explain international trade apply?

Accepted Answer

The analysis is identical.If nations and

Question 19

One reason why nations trade is because

Accepted Answer

A)  trading provides opportunities to earn profits. 
B)  the rate of interest is not the same in all countries. 
C)  resources are not equally distributed to all nations. 
D)  some nations like to build one thing while others like to build another. 
A)  trading provides opportunities to earn profits. 
B)  the rate of interest is not the same in all countries. 
C)  resources are not equally distributed to all nations. 
D)  some nations like to build one thing while others like to build another.

Question 20

Equilibrium price in international trade is the common price between exporting and importing countries.

Accepted Answer

A) True 
 B)False

Exam 35: International Trade and Comparative Advantage

What is mercantilism? What are the draw backs of this doctrine?

A country that must inhibit imports should give preference to

A restriction of imports that is accomplished by a quota normally

Figure 18-9 -In Figure 18-9, at price OC total quantity demanded exceeds quantity supplied and price will rise to

If one country has an absolute advantage in every commodity, there is no reason for it to trade.

An export subsidy is a payment by the government to exporters to permit them to charge lower prices.

If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to

"Dumping" means destroying goods to prevent driving down the price.

A tariff affects imports

Is the call for protection on the basis of national defense valid?

If a nation can produce greater quantities of a good than another nation, it has a(n)

The essential logic behind international trade is not different from that underlying trade among different states.Why, then, do we study international trade as a special subject?

Compare and contrast the effects of a quota and a tariff on imports.Be sure to include both short-run and long-run effects in your answer.

At least two demand curves are present in an international equilibrium model.

How extensively does the United States use quotas?

Figure 18-8 -Figure 18-8 has four sets of production possibility curves for two hypothetical countries.In which case will there be no advantage to trade between the two countries?

Suppose that the citizens of South Dakota decided to limit imports of citrus fruit from Florida and California on the grounds that climatic differences give those two states an unfair advantage in the production of those products.How would the analysis used to explain international trade apply?

One reason why nations trade is because

Equilibrium price in international trade is the common price between exporting and importing countries.

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters