Question 1

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

Accepted Answer

A) True 
 B)False

Question 2

The reason tariffs and quotas are imposed is that

Accepted Answer

A)  their costs are spread among many people and their benefits are concentrated. 
B)  their costs are concentrated and their benefits are spread among many people. 
C)  they create net benefits in the long run. 
D)  they reduce import dependence. 
A)  their costs are spread among many people and their benefits are concentrated. 
B)  their costs are concentrated and their benefits are spread among many people. 
C)  they create net benefits in the long run. 
D)  they reduce import dependence.

Question 3

In 2007, European Union (EU) negotiators have offered to cut tariffs for Latin American bananas to avoid "banana wars." What are the effects of a cut in tariffs?

Accepted Answer

A)  The quantity of bananas imported into the EU will increase. 
B)  The price of bananas for consumers will increase. 
C)  The quantity of bananas produced in the EU (such as in France and Spain) will increase. 
D)  Tariff revenue will increase. 
A)  The quantity of bananas imported into the EU will increase. 
B)  The price of bananas for consumers will increase. 
C)  The quantity of bananas produced in the EU (such as in France and Spain) will increase. 
D)  Tariff revenue will increase.

Question 4

Import quotas

Accepted Answer

A)  are the same as tariffs. 
B)  set the maximum number of units of a good that can be imported. 
C)  are not used by the United States. 
D)  set the minimum percentage of the value of a product that must consist of imported components. 
A)  are the same as tariffs. 
B)  set the maximum number of units of a good that can be imported. 
C)  are not used by the United States. 
D)  set the minimum percentage of the value of a product that must consist of imported components.

Question 5

Of the groups listed below, which is most likely to lobby for protection?

Accepted Answer

A)  workers in the import industry 
B)  workers in the export industry 
C)  consumers in the import industry 
D)  producers in the export industry 
A)  workers in the import industry 
B)  workers in the export industry 
C)  consumers in the import industry 
D)  producers in the export industry

Question 6

Trade barriers are politically popular because

Accepted Answer

A)  they are a way to avoid trade wars and still protect domestic producers. 
B)  people recognize their use as a negotiating tool in international relations. 
C)  their benefits are widespread, while their costs are highly concentrated. 
D)  their benefits are concentrated, while their costs are widespread. 
A)  they are a way to avoid trade wars and still protect domestic producers. 
B)  people recognize their use as a negotiating tool in international relations. 
C)  their benefits are widespread, while their costs are highly concentrated. 
D)  their benefits are concentrated, while their costs are widespread.

Question 7

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know that

Accepted Answer

A)  Brazilian coffee workers "gain" from this trade. 
B)  Brazilian producers "lose" from this trade. 
C)  Brazilian consumers "gain" from this trade. 
D)  Brazilian car manufacturers "lose" from this trade. 
A)  Brazilian coffee workers "gain" from this trade. 
B)  Brazilian producers "lose" from this trade. 
C)  Brazilian consumers "gain" from this trade. 
D)  Brazilian car manufacturers "lose" from this trade.

Question 8

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. The United States imposes a tariff on imported shirts of $4 per shirt.
-In the figure above, with the tariff the United States imports ________ million shirts per year.

Accepted Answer

A)  24 
B)  8 
C)  32 
D)  16 
A)  24 
B)  8 
C)  32 
D)  16

Question 9

Usually the removal of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

Accepted Answer

A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot 
A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot

Question 10

Which of the following statements is TRUE?

Accepted Answer

A)  International trade raises wages in developing countries. 
B)  International trade with rich industrial countries forces people in the developing countries to work for lower wages. 
C)  International trade leads to job losses in both import competing industries and exporting industries. 
D)  Unlike other types of international trade, offshoring does not bring any gains from trade. 
A)  International trade raises wages in developing countries. 
B)  International trade with rich industrial countries forces people in the developing countries to work for lower wages. 
C)  International trade leads to job losses in both import competing industries and exporting industries. 
D)  Unlike other types of international trade, offshoring does not bring any gains from trade.

Question 11

in 2013 the U.S. government imposed a tariff on Chinese solar panels. The group that lobbied for this tariff was

Accepted Answer

A)  U.S. consumers of solar panels. 
B)  only U.S. producers of solar panels. 
C)  only Chinese producers of solar panels. 
D)  Both U.S. and Chinese producers of solar panels. 
A)  U.S. consumers of solar panels. 
B)  only U.S. producers of solar panels. 
C)  only Chinese producers of solar panels. 
D)  Both U.S. and Chinese producers of solar panels.

Question 12

In 2013 the United States reduced the tariff on ethanol. The winners from the tariff reduction are

Accepted Answer

A)  U.S. producers and the U.S. government. 
B)  U.S. producers only. 
C)  U.S. consumers only. 
D)  U.S. consumers, U.S. producers, and the U.S. government. 
A)  U.S. producers and the U.S. government. 
B)  U.S. producers only. 
C)  U.S. consumers only. 
D)  U.S. consumers, U.S. producers, and the U.S. government.

Question 13

The Smoot-Hawley Act was enacted in

Accepted Answer

A)  1980. 
B)  2000. 
C)  1930. 
D)  1950. 
A)  1980. 
B)  2000. 
C)  1930. 
D)  1950.

Question 14

The reason that average labor costs are higher in the United States than in Haiti is that

Accepted Answer

A)  workers are more productive in the United States. 
B)  U.S. workers have a comparative advantage. 
C)  Haitian workers have a comparative advantage. 
D)  Haitian workers do not have union representation. 
A)  workers are more productive in the United States. 
B)  U.S. workers have a comparative advantage. 
C)  Haitian workers have a comparative advantage. 
D)  Haitian workers do not have union representation.

Question 15

How does a tariff affect the government's revenue? How does a quota affect the government's revenue?

Accepted Answer

A tariff is a tax on an imported good. L

Question 16

In 2013 the United States reduced the tariff on ethanol. This tariff reduction ________ the U.S. production of ethanol and ________ the total U.S. consumption of ethanol.

Accepted Answer

A)  increased; increased 
B)  increased; decreased 
C)  decreased; increased 
D)  decreased; decreased 
A)  increased; increased 
B)  increased; decreased 
C)  decreased; increased 
D)  decreased; decreased

Question 17

What is dumping?

Accepted Answer

Dumping is the situation in wh

Question 18

Voluntary export restraints (VERs)

Accepted Answer

A)  do not protect domestic producers. 
B)  raise revenue for the governments involved. 
C)  raise the prices paid by domestic consumers. 
D)  Both answers B and C are correct. 
A)  do not protect domestic producers. 
B)  raise revenue for the governments involved. 
C)  raise the prices paid by domestic consumers. 
D)  Both answers B and C are correct.

Question 19

A tariff will benefit

Accepted Answer

A)  domestic producers by maintaining a higher than free-trade price. 
B)  foreign producers by allowing them to sell at a higher price in markets with tariffs. 
C)  consumers who are able to better afford domestically produced goods. 
D)  All of the above answers are correct. 
A)  domestic producers by maintaining a higher than free-trade price. 
B)  foreign producers by allowing them to sell at a higher price in markets with tariffs. 
C)  consumers who are able to better afford domestically produced goods. 
D)  All of the above answers are correct.

Question 20

The infant industry argument is based on the idea of

Accepted Answer

A)  dynamic comparative advantage. 
B)  absolute productivity advantage. 
C)  global monopoly. 
D)  countervailing duties. 
A)  dynamic comparative advantage. 
B)  absolute productivity advantage. 
C)  global monopoly. 
D)  countervailing duties.

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

The reason tariffs and quotas are imposed is that

In 2007, European Union (EU) negotiators have offered to cut tariffs for Latin American bananas to avoid "banana wars." What are the effects of a cut in tariffs?

Import quotas

Of the groups listed below, which is most likely to lobby for protection?

Trade barriers are politically popular because

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know that

Usually the removal of trade barriers affecting a particular good benefits people domestically, each of whom gains a .

Which of the following statements is TRUE?

in 2013 the U.S. government imposed a tariff on Chinese solar panels. The group that lobbied for this tariff was

In 2013 the United States reduced the tariff on ethanol. The winners from the tariff reduction are

The Smoot-Hawley Act was enacted in

The reason that average labor costs are higher in the United States than in Haiti is that

How does a tariff affect the government's revenue? How does a quota affect the government's revenue?

In 2013 the United States reduced the tariff on ethanol. This tariff reduction the U.S. production of ethanol and the total U.S. consumption of ethanol.

What is dumping?

Voluntary export restraints (VERs)

A tariff will benefit

The infant industry argument is based on the idea of

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

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

The reason tariffs and quotas are imposed is that

In 2007, European Union (EU) negotiators have offered to cut tariffs for Latin American bananas to avoid "banana wars." What are the effects of a cut in tariffs?

Import quotas

Of the groups listed below, which is most likely to lobby for protection?

Trade barriers are politically popular because

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know that

Usually the removal of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

Which of the following statements is TRUE?

in 2013 the U.S. government imposed a tariff on Chinese solar panels. The group that lobbied for this tariff was

In 2013 the United States reduced the tariff on ethanol. The winners from the tariff reduction are

The Smoot-Hawley Act was enacted in

The reason that average labor costs are higher in the United States than in Haiti is that

How does a tariff affect the government's revenue? How does a quota affect the government's revenue?

In 2013 the United States reduced the tariff on ethanol. This tariff reduction ________ the U.S. production of ethanol and ________ the total U.S. consumption of ethanol.

What is dumping?

Voluntary export restraints (VERs)

A tariff will benefit

The infant industry argument is based on the idea of

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

Usually the removal of trade barriers affecting a particular good benefits people domestically, each of whom gains a .

In 2013 the United States reduced the tariff on ethanol. This tariff reduction the U.S. production of ethanol and the total U.S. consumption of ethanol.