Question 1

Import quotas ________ the price of imported goods and ________ the quantity consumed in the nation imposing the quota.

Accepted Answer

A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease 
A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease

Question 2

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is ________ the world price.

Accepted Answer

A)  less than 
B)  equal to 
C)  greater than 
D)  not comparable to 
A)  less than 
B)  equal to 
C)  greater than 
D)  not comparable to

Question 3

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba

Question 4

The effect of an import quota is to

Accepted Answer

A)  increase the supply of the good and lower its price. 
B)  increase the supply of the good and increase its price. 
C)  increase the demand for the good and increase its price. 
D)  decrease the supply of the good and raise its price. 
A)  increase the supply of the good and lower its price. 
B)  increase the supply of the good and increase its price. 
C)  increase the demand for the good and increase its price. 
D)  decrease the supply of the good and raise its price.

Question 5

A tariff imposed by the United States on Japanese cars ________ the price of cars in the United States and ________ the quantity of Japanese cars imported into the United States.

Accepted Answer

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

Question 6

An import quota is a

Accepted Answer

A)  tariff imposed on goods that are dumped in the country. 
B)  law that prevents ecologically damaging goods from being imported into a country. 
C)  market-imposed balancing factor that keeps prices of imports and exports in equilibrium. 
D)  government-imposed restriction on the quantity of a specific good that can be imported. 
A)  tariff imposed on goods that are dumped in the country. 
B)  law that prevents ecologically damaging goods from being imported into a country. 
C)  market-imposed balancing factor that keeps prices of imports and exports in equilibrium. 
D)  government-imposed restriction on the quantity of a specific good that can be imported.

Question 7

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Accepted Answer

A)  an import quota. 
B)  dumping. 
C)  a voluntary export restraint. 
D)  a tariff. 
A)  an import quota. 
B)  dumping. 
C)  a voluntary export restraint. 
D)  a tariff.

Question 8

Tariffs ________ the domestic price of the good and import quotas ________ the domestic price of the good.

Accepted Answer

A)  lower; lower 
B)  lower; raise 
C)  raise; lower 
D)  raise; raise 
A)  lower; lower 
B)  lower; raise 
C)  raise; lower 
D)  raise; raise

Question 9

When does the domestic government gain the MOST revenue?

Accepted Answer

A)  when it imposes a tariff 
B)  when it imposes an import quota 
C)  when it negotiates a voluntary export restraint 
D)  The amount of revenue it gains is the same with a tariff and a voluntary export restraint. 
A)  when it imposes a tariff 
B)  when it imposes an import quota 
C)  when it negotiates a voluntary export restraint 
D)  The amount of revenue it gains is the same with a tariff and a voluntary export restraint.

Question 10

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Accepted Answer

A)  zero. 
B)  6 percent. 
C)  20 percent. 
D)  100 percent. 
A)  zero. 
B)  6 percent. 
C)  20 percent. 
D)  100 percent.

Question 11

In 2012 the U.S. government claimed that Chinese producers of solar panels were dumping panels in the United States, which means that the producers were accused of

Accepted Answer

A)  avoiding the U.S. tariff on solar panels. 
B)  selling the panels in the United States at a price lower than their cost of production. 
C)  selling the panels in the United States at a higher price than they were selling the panels in China. 
D)  None of the above answers are correct. 
A)  avoiding the U.S. tariff on solar panels. 
B)  selling the panels in the United States at a price lower than their cost of production. 
C)  selling the panels in the United States at a higher price than they were selling the panels in China. 
D)  None of the above answers are correct.

Question 12

Less developed countries, compared to industrialized ones, are more likely to have higher tariff rates.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is TRUE?

Accepted Answer

A)  Dumping is illegal under the rules of the WTO. 
B)  Dumping occurs when a foreign firm sells its exports at a higher price than its cost of production. 
C)  Both statements are true. 
D)  Neither of the statements is true. 
A)  Dumping is illegal under the rules of the WTO. 
B)  Dumping occurs when a foreign firm sells its exports at a higher price than its cost of production. 
C)  Both statements are true. 
D)  Neither of the statements is true.

Question 14

Over the past 80 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

Accepted Answer

A) True 
 B)False

Question 15

The infant-industry argument is the only perfectly valid argument for protection.

Accepted Answer

A) True 
 B)False

Question 16

When a group lobbies for the prevention of free trade, the most likely reason is

Accepted Answer

A)  rent seeking. 
B)  tariff revenue. 
C)  defense against expensive domestic labor. 
D)  preservation of the environment. 
A)  rent seeking. 
B)  tariff revenue. 
C)  defense against expensive domestic labor. 
D)  preservation of the environment.

Question 17

Which of the following is a TRUE statement?

Accepted Answer

A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition. 
A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition.

Question 18

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Accepted Answer

A)  Protectionism eliminates domestic jobs in export industries. 
B)  Imports create jobs in this country for people selling and servicing imported items. 
C)  The cost of saving domestic jobs through protectionism may be high. 
D)  all of the above 
A)  Protectionism eliminates domestic jobs in export industries. 
B)  Imports create jobs in this country for people selling and servicing imported items. 
C)  The cost of saving domestic jobs through protectionism may be high. 
D)  all of the above

Question 19

When a firms "dumps" some of its products in another country, it

Accepted Answer

A)  creates an environmental hazard in the receiving country. 
B)  sells its products abroad at a price lower than it costs to produce the goods. 
C)  increases the total level of employment in the receiving country. 
D)  is specializing according to comparative advantage. 
A)  creates an environmental hazard in the receiving country. 
B)  sells its products abroad at a price lower than it costs to produce the goods. 
C)  increases the total level of employment in the receiving country. 
D)  is specializing according to comparative advantage.

Question 20

If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports.

Accepted Answer

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

Import quotas the price of imported goods and the quantity consumed in the nation imposing the quota.

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is ________ the world price.

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

The effect of an import quota is to

A tariff imposed by the United States on Japanese cars the price of cars in the United States and the quantity of Japanese cars imported into the United States.

An import quota is a

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Tariffs the domestic price of the good and import quotas the domestic price of the good.

When does the domestic government gain the MOST revenue?

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

In 2012 the U.S. government claimed that Chinese producers of solar panels were dumping panels in the United States, which means that the producers were accused of

Less developed countries, compared to industrialized ones, are more likely to have higher tariff rates.

Which of the following statements is TRUE?

Over the past 80 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

The infant-industry argument is the only perfectly valid argument for protection.

When a group lobbies for the prevention of free trade, the most likely reason is

Which of the following is a TRUE statement?

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

When a firms "dumps" some of its products in another country, it

If a country imposes a tariff on an imported good, the tariff the price in the importing country and the quantity of imports.

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

Import quotas ________ the price of imported goods and ________ the quantity consumed in the nation imposing the quota.

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is ________ the world price.

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

The effect of an import quota is to

A tariff imposed by the United States on Japanese cars ________ the price of cars in the United States and ________ the quantity of Japanese cars imported into the United States.

An import quota is a

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Tariffs ________ the domestic price of the good and import quotas ________ the domestic price of the good.

When does the domestic government gain the MOST revenue?

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

In 2012 the U.S. government claimed that Chinese producers of solar panels were dumping panels in the United States, which means that the producers were accused of

Less developed countries, compared to industrialized ones, are more likely to have higher tariff rates.

Which of the following statements is TRUE?

Over the past 80 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

The infant-industry argument is the only perfectly valid argument for protection.

When a group lobbies for the prevention of free trade, the most likely reason is

Which of the following is a TRUE statement?

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

When a firms "dumps" some of its products in another country, it

If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports.

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

Import quotas the price of imported goods and the quantity consumed in the nation imposing the quota.

A tariff imposed by the United States on Japanese cars the price of cars in the United States and the quantity of Japanese cars imported into the United States.

Tariffs the domestic price of the good and import quotas the domestic price of the good.

If a country imposes a tariff on an imported good, the tariff the price in the importing country and the quantity of imports.