Question 1

A tariff

Accepted Answer

A)  is a tax imposed on imported goods. 
B)  is a tax imposed on exported goods. 
C)  encourages worldwide specialization according to the principle of comparative advantage. 
D)  has no effect on prices paid by domestic consumers even though it increases the revenue collected by domestic producers. 
A)  is a tax imposed on imported goods. 
B)  is a tax imposed on exported goods. 
C)  encourages worldwide specialization according to the principle of comparative advantage. 
D)  has no effect on prices paid by domestic consumers even though it increases the revenue collected by domestic producers.

Question 2

Economists usually agree with which of the following arguments that favor protectionism?

Accepted Answer

A)  the competition with cheap foreign labor defense 
B)  the job protection defense 
C)  the anti-dumping defense 
D)  Economists in general do not agree with any of the arguments in favor of protectionism. 
A)  the competition with cheap foreign labor defense 
B)  the job protection defense 
C)  the anti-dumping defense 
D)  Economists in general do not agree with any of the arguments in favor of protectionism.

Question 3

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter.
-In the figure above, with international trade U.S. companies buy ________ helicopters per year.

Accepted Answer

A)  240 
B)  480 
C)  720 
D)  360 
A)  240 
B)  480 
C)  720 
D)  360

Question 4

A difference between a quota and a tariff is that with a quota the

Accepted Answer

A)  person who has the right to import the good captures an extra gain. 
B)  exporting government collects an extra gain in the form of revenue. 
C)  importing government collects an extra gain in the form of revenue. 
D)  domestic consumers are not harmed. 
A)  person who has the right to import the good captures an extra gain. 
B)  exporting government collects an extra gain in the form of revenue. 
C)  importing government collects an extra gain in the form of revenue. 
D)  domestic consumers are not harmed.

Question 5

Currently Belize, a country in Central America, has a small coffee industry but does not export any coffee. Suppose the government of Belize, in order to protect the new coffee industry to enable it to grow into a mature industry that can compete in world markets, places a tariff on the importation of coffee. What is the argument for placing the tariff on coffee?

Accepted Answer

A)  the infant-industry argument 
B)  the dumping argument 
C)  to protect Belize coffee workers 
D)  to prevent rich countries from exploiting developing countries 
A)  the infant-industry argument 
B)  the dumping argument 
C)  to protect Belize coffee workers 
D)  to prevent rich countries from exploiting developing countries

Question 6

When considering rent seeking, which of the following is TRUE?

Accepted Answer

A)  The anti-free trade group generally will lobby more than the pro-free trade group. 
B)  The pro-free trade group generally will lobby more than the anti-free trade group. 
C)  Usually only the anti-free trade group is concerned about what is best for society at large. 
D)  Only the pro-free trade group is concerned about the government's revenue from tariffs. 
A)  The anti-free trade group generally will lobby more than the pro-free trade group. 
B)  The pro-free trade group generally will lobby more than the anti-free trade group. 
C)  Usually only the anti-free trade group is concerned about what is best for society at large. 
D)  Only the pro-free trade group is concerned about the government's revenue from tariffs.

Question 7

During the first 6 months of 2008, the United States imported 1,655,740,870 pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. If the United States has a goal of raising tax revenue from coffee imports, what policy should they pursue?

Accepted Answer

A)  tariff on imported coffee 
B)  subsidy on imported coffee 
C)  quota on imported coffee 
D)  voluntary export restraints on coffee 
A)  tariff on imported coffee 
B)  subsidy on imported coffee 
C)  quota on imported coffee 
D)  voluntary export restraints on coffee

Question 8

Comparative advantage implies that a country will

Accepted Answer

A)  import those goods in which the country has a comparative advantage. 
B)  export those goods in which the country has a comparative advantage. 
C)  find it difficult to conclude free trade agreements with other nations. 
D)  export goods produced by domestic industries with low wages relative to its trading partners. 
A)  import those goods in which the country has a comparative advantage. 
B)  export those goods in which the country has a comparative advantage. 
C)  find it difficult to conclude free trade agreements with other nations. 
D)  export goods produced by domestic industries with low wages relative to its trading partners.

Question 9

A difference between a quota and a tariff is that

Accepted Answer

A)  a tariff generates a higher price than does a quota. 
B)  a tariff generates a greater reduction in exports than does a quota. 
C)  a quota increases profits of domestic producers more than does a tariff. 
D)  the government collects revenues from a tariff but does not collect revenues from a quota. 
A)  a tariff generates a higher price than does a quota. 
B)  a tariff generates a greater reduction in exports than does a quota. 
C)  a quota increases profits of domestic producers more than does a tariff. 
D)  the government collects revenues from a tariff but does not collect revenues from a quota.

Question 10

Who benefits from imports?

Accepted Answer

A)  domestic consumers 
B)  domestic producers 
C)  foreign consumers 
D)  domestic workers in the industry 
A)  domestic consumers 
B)  domestic producers 
C)  foreign consumers 
D)  domestic workers in the industry

Question 11

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations. However, are there any losers from such a policy change?

Accepted Answer

Yes, there are losers from opening up to

Question 12

________ gain from imports and ________ lose from imports.

Accepted Answer

A)  Domestic consumers; the domestic government 
B)  Domestic consumers; domestic producers 
C)  Domestic producers; the domestic government 
D)  Domestic producers; domestic consumers 
A)  Domestic consumers; the domestic government 
B)  Domestic consumers; domestic producers 
C)  Domestic producers; the domestic government 
D)  Domestic producers; domestic consumers

Question 13

Based on the table below, at what world price would the country import the good?

Accepted Answer

A)  all prices below $8 
B)  at exactly $8 
C)  all prices above $8 
D)  it is impossible to say from the information given 
A)  all prices below $8 
B)  at exactly $8 
C)  all prices above $8 
D)  it is impossible to say from the information given

Question 14

A tariff ________ the quantity of the good imported and ________ the domestic price of the imported good.

Accepted Answer

A)  decreases; decreases 
B)  decreases; increases 
C)  increases; lowers 
D)  does not change; increases 
A)  decreases; decreases 
B)  decreases; increases 
C)  increases; lowers 
D)  does not change; increases

Question 15

Which of the following is a reason why only limited attempts are made to compensate those who lose from free international trade?

Accepted Answer

A)  Free trade advocates consistently lobby to eliminate compensation. 
B)  It would be difficult to determine the extent to which someone's sufferings were because of free trade and not due to reasons under their own control. 
C)  No one loses in the from free trade in the long run. 
D)  None of the above answers are correct. 
A)  Free trade advocates consistently lobby to eliminate compensation. 
B)  It would be difficult to determine the extent to which someone's sufferings were because of free trade and not due to reasons under their own control. 
C)  No one loses in the from free trade in the long run. 
D)  None of the above answers are correct.

Question 16

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers from cheap foreign labor?
I. Low-wage foreigners are just as productive as U.S. workers.
II. U.S. workers have a comparative advantage in low-wage jobs.

Accepted Answer

A)  I only 
B)  II only 
C)  I and II 
D)  Neither I nor II is correct. 
A)  I only 
B)  II only 
C)  I and II 
D)  Neither I nor II is correct.

Question 17

A key difference between a quota and a tariff is that

Accepted Answer

A)  a quota has a larger effect on quantity than on price. 
B)  a tariff has a larger effect on quantity than on price. 
C)  the government of the importing country gains revenue from a tariff, but the price gap caused by a quota benefits domestic importers. 
D)  All of the above answers are correct. 
A)  a quota has a larger effect on quantity than on price. 
B)  a tariff has a larger effect on quantity than on price. 
C)  the government of the importing country gains revenue from a tariff, but the price gap caused by a quota benefits domestic importers. 
D)  All of the above answers are correct.

Question 18

How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

Accepted Answer

A quota raises the price of the good bec

Question 19

The U.S. government limits the amount of sugar that can be imported into the United States. This policy is

Accepted Answer

A)  an import quota. 
B)  a tariff. 
C)  a comparative advantage limitation. 
D)  None of the above answers are correct. 
A)  an import quota. 
B)  a tariff. 
C)  a comparative advantage limitation. 
D)  None of the above answers are correct.

Question 20

-The United States imports cheese from a variety of countries. The table above gives the domestic supply of, and demand for, cheese in the United States. The world price of cheese is $12 per pound, and trade is unrestricted.
a) How many pounds of cheese are consumed in the United States?
b) How many pounds of cheese are produced in the United States?
c) How many pounds of cheese are imported into the United States?
If a $3 per pound tariff is imposed,
d) How many pounds of cheese are consumed in the United States?
e) How many pounds of cheese are produced in the United States?
f) How many pounds of cheese are imported into the United States?
g) How much will the U.S. government collect in tariff revenue?
h) Who benefits from the tariff? Who loses?

Accepted Answer

a) 180,000 pounds of cheese are consumed

A tariff

Economists usually agree with which of the following arguments that favor protectionism?

A difference between a quota and a tariff is that with a quota the

When considering rent seeking, which of the following is TRUE?

During the first 6 months of 2008, the United States imported 1,655,740,870 pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. If the United States has a goal of raising tax revenue from coffee imports, what policy should they pursue?

Comparative advantage implies that a country will

A difference between a quota and a tariff is that

Who benefits from imports?

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations. However, are there any losers from such a policy change?

gain from imports and lose from imports.

Based on the table below, at what world price would the country import the good?

A tariff the quantity of the good imported and the domestic price of the imported good.

Which of the following is a reason why only limited attempts are made to compensate those who lose from free international trade?

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers from cheap foreign labor? I. Low-wage foreigners are just as productive as U.S. workers. II. U.S. workers have a comparative advantage in low-wage jobs.

A key difference between a quota and a tariff is that

How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

The U.S. government limits the amount of sugar that can be imported into the United States. This policy is

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

A tariff

Economists usually agree with which of the following arguments that favor protectionism?

A difference between a quota and a tariff is that with a quota the

When considering rent seeking, which of the following is TRUE?

During the first 6 months of 2008, the United States imported 1,655,740,870 pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. If the United States has a goal of raising tax revenue from coffee imports, what policy should they pursue?

Comparative advantage implies that a country will

A difference between a quota and a tariff is that

Who benefits from imports?

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations. However, are there any losers from such a policy change?

________ gain from imports and ________ lose from imports.

Based on the table below, at what world price would the country import the good?

A tariff ________ the quantity of the good imported and ________ the domestic price of the imported good.

Which of the following is a reason why only limited attempts are made to compensate those who lose from free international trade?

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers from cheap foreign labor? I. Low-wage foreigners are just as productive as U.S. workers. II. U.S. workers have a comparative advantage in low-wage jobs.

A key difference between a quota and a tariff is that

How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

The U.S. government limits the amount of sugar that can be imported into the United States. This policy is

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

gain from imports and lose from imports.

A tariff the quantity of the good imported and the domestic price of the imported good.