Question 1

If the United States imposes a tariff on imported cars, the

Accepted Answer

A)  U.S. demand curve shifts rightward. 
B)  U.S. demand curve shifts leftward. 
C)  U.S. supply curve shifts rightward. 
D)  price in the United States rises but neither the U.S. demand curve nor the U.S. supply curve shift. 
A)  U.S. demand curve shifts rightward. 
B)  U.S. demand curve shifts leftward. 
C)  U.S. supply curve shifts rightward. 
D)  price in the United States rises but neither the U.S. demand curve nor the U.S. supply curve shift.

Question 2

Compared to the situation before international trade, after the United States imports a good, then production in the United States ________ and consumption in the United States ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 3

Some people assert that protection from foreign competition prevents rich countries from exploiting developing countries. What is this argument in more detail and what is its flaw?

Accepted Answer

The argument claims that rich nations wi

Question 4

In 2006, European Union tariff on imported bananas from Latin America was €176 a ton. Suppose 2.5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the change in tariff revenue between 2006 and 2007?

Accepted Answer

A)  €1,000,000 
B)  €440,000,000 
C)  €445,000,000 
D)  - €1,000,000 
A)  €1,000,000 
B)  €440,000,000 
C)  €445,000,000 
D)  - €1,000,000

Question 5

Define comparative advantage and discuss its role in international trade.

Accepted Answer

Comparative advantage is the factor that

Question 6

Quotas are less damaging to an economy than are tariffs.

Accepted Answer

A) True 
 B)False

Question 7

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In the figure above, with international trade Americans buy ________ million shirts per year.

Accepted Answer

A)  48 
B)  32 
C)  16 
D)  24 
A)  48 
B)  32 
C)  16 
D)  24

Question 8

Tariffs

Accepted Answer

A)  generate revenue for consumers. 
B)  generate revenue for the government. 
C)  encourage domestic consumers to buy more imports. 
D)  encourage domestic producers to produce less. 
A)  generate revenue for consumers. 
B)  generate revenue for the government. 
C)  encourage domestic consumers to buy more imports. 
D)  encourage domestic producers to produce less.

Question 9

The Smoot-Hawley Act introduced

Accepted Answer

A)  opportunities for expanding U.S. foreign trade. 
B)  the highest tariffs set by the United States in the last 80 years. 
C)  a framework promoting international free trade. 
D)  revenue tariffs as a major source of U.S. government revenues. 
A)  opportunities for expanding U.S. foreign trade. 
B)  the highest tariffs set by the United States in the last 80 years. 
C)  a framework promoting international free trade. 
D)  revenue tariffs as a major source of U.S. government revenues.

Question 10

Some observers opposing free trade argue that when we buy shoes from Brazil or shirts from Taiwan, U.S. workers lose their jobs. The fact of the matter is that

Accepted Answer

A)  no U.S. worker has actually lost a job because of free trade. 
B)  most jobs lost because of free trade pay less than the poverty level. 
C)  free trade creates jobs in export industries. 
D)  the jobs lost are concentrated in restricted geographic areas. 
A)  no U.S. worker has actually lost a job because of free trade. 
B)  most jobs lost because of free trade pay less than the poverty level. 
C)  free trade creates jobs in export industries. 
D)  the jobs lost are concentrated in restricted geographic areas.

Question 11

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

Accepted Answer

A)  More airplanes will be produced in the United States. 
B)  There will be no change in the price of airplanes in the United States. 
C)  The world price of airplanes will increase. 
D)  The quantity of airplanes demanded in the United States will increase. 
A)  More airplanes will be produced in the United States. 
B)  There will be no change in the price of airplanes in the United States. 
C)  The world price of airplanes will increase. 
D)  The quantity of airplanes demanded in the United States will increase.

Question 12

Give a brief description of the history of tariffs in the U.S.

Accepted Answer

Today, U.S. tariffs are low compared to

Question 13

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

Accepted Answer

A)  Belize coffee producers would gain from trade. 
B)  Belize coffee consumers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade. 
A)  Belize coffee producers would gain from trade. 
B)  Belize coffee consumers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade.

Question 14

During 2010, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

Accepted Answer

It would be foolish for the United State

Question 15

The U.S. government imposes an import quota on sugar. This import quota helps ________ and harms ________.

Accepted Answer

A)  U.S. producers of sugar; U.S. consumers of sugar 
B)  U.S. producers of sugar; the U.S. government 
C)  the U.S. government; U.S. consumers of sugar 
D)  U.S. consumers of sugar; U.S. producers of sugar 
A)  U.S. producers of sugar; U.S. consumers of sugar 
B)  U.S. producers of sugar; the U.S. government 
C)  the U.S. government; U.S. consumers of sugar 
D)  U.S. consumers of sugar; U.S. producers of sugar

Question 16

In poorer countries, free trade ________ the demand for labor in these countries and ________ the wages paid in these countries.

Accepted Answer

A)  decreases; lowers 
B)  decreases; raises 
C)  increases; lowers 
D)  increases; raises 
A)  decreases; lowers 
B)  decreases; raises 
C)  increases; lowers 
D)  increases; raises

Question 17

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

Accepted Answer

A)  that the government of Pacifica needs to increase its revenue. 
B)  lobbying from banana farmers in Pacifica. 
C)  comparative advantage. 
D)  Both answers A and B are correct. 
A)  that the government of Pacifica needs to increase its revenue. 
B)  lobbying from banana farmers in Pacifica. 
C)  comparative advantage. 
D)  Both answers A and B are correct.

Question 18

Increasing a tariff will ________ the domestic quantity consumed of the good, while ________ the domestic production of the good.

Accepted Answer

A)  increase; increasing 
B)  increase; decreasing 
C)  decrease; increasing 
D)  decrease; decreasing 
A)  increase; increasing 
B)  increase; decreasing 
C)  decrease; increasing 
D)  decrease; decreasing

Question 19

The European Union imports bananas from Latin America as well as imports from Europe's former colonies in the African, Caribbean and Pacific (ACP) group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

Accepted Answer

A)  European consumers are better off with tariff than with free trade. 
B)  For European consumers, the price of ACP bananas is lower than Latin American bananas. 
C)  The gain from free trade is decreased because of banana tariffs. 
D)  The price European consumers pay for bananas is higher with the tariff than the free trade price. 
A)  European consumers are better off with tariff than with free trade. 
B)  For European consumers, the price of ACP bananas is lower than Latin American bananas. 
C)  The gain from free trade is decreased because of banana tariffs. 
D)  The price European consumers pay for bananas is higher with the tariff than the free trade price.

Question 20

Why do nations engage in international trade?

Accepted Answer

Nations engage in international trade be

If the United States imposes a tariff on imported cars, the

Compared to the situation before international trade, after the United States imports a good, then production in the United States and consumption in the United States .

Some people assert that protection from foreign competition prevents rich countries from exploiting developing countries. What is this argument in more detail and what is its flaw?

Define comparative advantage and discuss its role in international trade.

Quotas are less damaging to an economy than are tariffs.

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade Americans buy ________ million shirts per year.

Tariffs

The Smoot-Hawley Act introduced

Some observers opposing free trade argue that when we buy shoes from Brazil or shirts from Taiwan, U.S. workers lose their jobs. The fact of the matter is that

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

Give a brief description of the history of tariffs in the U.S.

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

During 2010, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

The U.S. government imposes an import quota on sugar. This import quota helps and harms .

In poorer countries, free trade the demand for labor in these countries and the wages paid in these countries.

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

Increasing a tariff will the domestic quantity consumed of the good, while the domestic production of the good.

The European Union imports bananas from Latin America as well as imports from Europe's former colonies in the African, Caribbean and Pacific (ACP) group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

Why do nations engage in international trade?

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

If the United States imposes a tariff on imported cars, the

Compared to the situation before international trade, after the United States imports a good, then production in the United States ________ and consumption in the United States ________.

Some people assert that protection from foreign competition prevents rich countries from exploiting developing countries. What is this argument in more detail and what is its flaw?

Define comparative advantage and discuss its role in international trade.

Quotas are less damaging to an economy than are tariffs.

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade Americans buy ________ million shirts per year.

Tariffs

The Smoot-Hawley Act introduced

Some observers opposing free trade argue that when we buy shoes from Brazil or shirts from Taiwan, U.S. workers lose their jobs. The fact of the matter is that

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

Give a brief description of the history of tariffs in the U.S.

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

During 2010, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

The U.S. government imposes an import quota on sugar. This import quota helps ________ and harms ________.

In poorer countries, free trade ________ the demand for labor in these countries and ________ the wages paid in these countries.

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

Increasing a tariff will ________ the domestic quantity consumed of the good, while ________ the domestic production of the good.

The European Union imports bananas from Latin America as well as imports from Europe's former colonies in the African, Caribbean and Pacific (ACP) group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

Why do nations engage in international trade?

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

Compared to the situation before international trade, after the United States imports a good, then production in the United States and consumption in the United States .

The U.S. government imposes an import quota on sugar. This import quota helps and harms .

In poorer countries, free trade the demand for labor in these countries and the wages paid in these countries.

Increasing a tariff will the domestic quantity consumed of the good, while the domestic production of the good.