Question 1

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed by a ________ number of people.

Accepted Answer

A)  small; large 
B)  large; small 
C)  small; small 
D)  large; large 
A)  small; large 
B)  large; small 
C)  small; small 
D)  large; large

Question 2

________ occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

Accepted Answer

A)  Dumping 
B)  Comparative advantage 
C)  Learning-by-doing 
D)  A tariff 
A)  Dumping 
B)  Comparative advantage 
C)  Learning-by-doing 
D)  A tariff

Question 3

An import quota protects domestic producers by

Accepted Answer

A)  setting a limit on the amount of imports. 
B)  placing a prohibitive tax on imports. 
C)  encouraging competition among domestic producers. 
D)  increasing the total supply of the product. 
A)  setting a limit on the amount of imports. 
B)  placing a prohibitive tax on imports. 
C)  encouraging competition among domestic producers. 
D)  increasing the total supply of the product.

Question 4

Two arguments used to promote trade barriers are the infant-industry argument, and the dumping argument. Explain each of these arguments and evaluate whether each one has any flaws.

Accepted Answer

The infant-industry argument is that it

Question 5

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

Accepted Answer

A)  creating new jobs to hire workers who lost their jobs because of NAFTA. 
B)  setting aside funds to support and retrain workers who lost their jobs because of NAFTA. 
C)  reducing tariffs. 
D)  imposing quotas. 
A)  creating new jobs to hire workers who lost their jobs because of NAFTA. 
B)  setting aside funds to support and retrain workers who lost their jobs because of NAFTA. 
C)  reducing tariffs. 
D)  imposing quotas.

Question 6

During the first 6 months of 2008, the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. What would be a potential consequence of such a trade restriction?

Accepted Answer

A)  The U.S. price of coffee would increase. 
B)  U.S. consumers would drink more coffee. 
C)  The quantity of coffee imported into the United States would increase. 
D)  If the United States instead imposed a quota on coffee imports, government tax revenue would increase by more than with a tariff. 
A)  The U.S. price of coffee would increase. 
B)  U.S. consumers would drink more coffee. 
C)  The quantity of coffee imported into the United States would increase. 
D)  If the United States instead imposed a quota on coffee imports, government tax revenue would increase by more than with a tariff.

Question 7

A tariff is

Accepted Answer

A)  a licensing regulation that limits imports. 
B)  a tax on an exported good. 
C)  a tax on an imported good. 
D)  an agreement to restrict the volume of exports. 
A)  a licensing regulation that limits imports. 
B)  a tax on an exported good. 
C)  a tax on an imported good. 
D)  an agreement to restrict the volume of exports.

Question 8

Discuss reasons why we see trade restrictions. Are any of these reasons valid?

Accepted Answer

There are several reasons advanced to re

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed by a number of people.

________ occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

An import quota protects domestic producers by

Two arguments used to promote trade barriers are the infant-industry argument, and the dumping argument. Explain each of these arguments and evaluate whether each one has any flaws.

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

During the first 6 months of 2008, the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. What would be a potential consequence of such a trade restriction?

A tariff is

Discuss reasons why we see trade restrictions. Are any of these reasons valid?

What Is Economics

The Economic Problem

Demand and Supply

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Filters

Exam 15: International Trade Policy

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed by a ________ number of people.

________ occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

An import quota protects domestic producers by

Two arguments used to promote trade barriers are the infant-industry argument, and the dumping argument. Explain each of these arguments and evaluate whether each one has any flaws.

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

During the first 6 months of 2008, the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. What would be a potential consequence of such a trade restriction?

A tariff is

Discuss reasons why we see trade restrictions. Are any of these reasons valid?

What Is Economics

The Economic Problem

Demand and Supply

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Filters

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed by a number of people.