Question 1

A nation can gain from imposing a tariff on imports if it forces exporting countries

Accepted Answer

A) to raise their prices to pay the tariff. 
B) to lower their prices to avoid stocks of unsold goods. 
C) to produce at diseconomies of scale. 
D) to accept some imports from the tariff-imposing nation. 
A) to raise their prices to pay the tariff. 
B) to lower their prices to avoid stocks of unsold goods. 
C) to produce at diseconomies of scale. 
D) to accept some imports from the tariff-imposing nation.

Question 2

Figure 34-5
​  
-From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that

Accepted Answer

A) Japan has an absolute advantage in TVs and computers, but a comparative advantage only in TVs. 
B) Japan has only a comparative advantage in TVs. 
C) Japan has an absolute advantage in both TVs and computers, but a comparative advantage only in computers. 
D) China has a comparative advantage in computers. 
A) Japan has an absolute advantage in TVs and computers, but a comparative advantage only in TVs. 
B) Japan has only a comparative advantage in TVs. 
C) Japan has an absolute advantage in both TVs and computers, but a comparative advantage only in computers. 
D) China has a comparative advantage in computers.

Question 3

Table 34-4
​  
-Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other, what will be the equilibrium price in the world market for television sets?

Accepted Answer

A) $100 
B) $200 
C) $300 
D) $400 
A) $100 
B) $200 
C) $300 
D) $400

Question 4

Among the impediments to the international mobility of capital are

Accepted Answer

A) restrictions on foreign ownership. 
B) fear of nationalization or political instability. 
C) fluctuations in exchange rates. 
D) All of the above are correct. 
A) restrictions on foreign ownership. 
B) fear of nationalization or political instability. 
C) fluctuations in exchange rates. 
D) All of the above are correct.

Question 5

The trade philosophy of the Clinton administration is best characterized as

Accepted Answer

A) protectionist. 
B) mercantilist. 
C) free trade. 
D) strategic trade. 
A) protectionist. 
B) mercantilist. 
C) free trade. 
D) strategic trade.

Question 6

The following table shows the units of output a worker can produce per month in country A and country B.   The opportunity cost of a unit of electronics in Country B is

Accepted Answer

A) 3 units of food. 
B) 2 units of food. 
C) 5 units of food. 
D) none of these. 
A) 3 units of food. 
B) 2 units of food. 
C) 5 units of food. 
D) none of these.

Question 7

If two countries voluntarily trade two goods with one another, the rate of exchange between the goods must fall in between the price ratios that would prevail in the two countries in the absence of trade.

Accepted Answer

A) True 
 B)False

Question 8

Voluntary exchange is based on the principle that all parties must gain from trade.

Accepted Answer

A) True 
 B)False

Question 9

How does the imposition of a tariff reduce the price of imports?

Accepted Answer

A) At the lower quantity supplied, the price to the importer is lower than if there were free trade. 
B) At the lower quantity demanded, the price to the importer is lower than if there were free trade. 
C) Supply of the product is increased from domestic production, reducing the price of the imports. 
D) Demand for the product is decreased, so that price must fall. 
A) At the lower quantity supplied, the price to the importer is lower than if there were free trade. 
B) At the lower quantity demanded, the price to the importer is lower than if there were free trade. 
C) Supply of the product is increased from domestic production, reducing the price of the imports. 
D) Demand for the product is decreased, so that price must fall.

Question 10

Opening trade between a nation that has "cheap labor" and one that has "expensive labor" will

Accepted Answer

A) lower the standard of living in both countries. 
B) raise the standard of living in both countries. 
C) make some workers less efficient. 
D) lead to an inappropriate allocation of resources. 
A) lower the standard of living in both countries. 
B) raise the standard of living in both countries. 
C) make some workers less efficient. 
D) lead to an inappropriate allocation of resources.

Question 11

Trade between two nations is complicated by

Accepted Answer

A) the variability in exchange rates of the respective nation's currencies. 
B) different production techniques in the nations. 
C) the age and experience of the respective nation's diplomats. 
D) the variability in climate between the nations. 
A) the variability in exchange rates of the respective nation's currencies. 
B) different production techniques in the nations. 
C) the age and experience of the respective nation's diplomats. 
D) the variability in climate between the nations.

Question 12

Compare and contrast the effects of a quota and a tariff on imports.Be sure to include both short-run and long-run effects in your answer.

Accepted Answer

A quota is a quantity restriction on imp

Question 13

Table 34-4
​  
-Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States.If the United States and Japan decide to trade with each other, what will happen to the output of television sets in Japan?

Accepted Answer

A) TV production in Japan will fall by 10,000 units. 
B) TV production in Japan will fall by 20,000 units. 
C) TV production in Japan will fall by 30,000 units. 
D) TV production in Japan will increase by 10,000 units. 
A) TV production in Japan will fall by 10,000 units. 
B) TV production in Japan will fall by 20,000 units. 
C) TV production in Japan will fall by 30,000 units. 
D) TV production in Japan will increase by 10,000 units.

Question 14

The U.S.Constitution

Accepted Answer

A) prohibits tariffs on trade between Arkansas and New York but allows tariffs on trade between Hawaii and Alaska. 
B) prohibits tariffs on all trade. 
C) allows tariffs on trade with other countries, but not on trade between the states. 
D) allows tariffs only on goods purchased from the communist nations. 
A) prohibits tariffs on trade between Arkansas and New York but allows tariffs on trade between Hawaii and Alaska. 
B) prohibits tariffs on all trade. 
C) allows tariffs on trade with other countries, but not on trade between the states. 
D) allows tariffs only on goods purchased from the communist nations.

Question 15

"Free trade benefits one country at another country's expense." Evaluate this statement using economic analysis.

Accepted Answer

The statement is false.Trade m

Question 16

A tariff affects imports

Accepted Answer

A) by limiting quantity and raising price to a higher level. 
B) by reducing quantity demanded so that supply falls. 
C) by increasing supply, raising price, and reducing demand. 
D) by raising price and reducing quantity demanded. 
A) by limiting quantity and raising price to a higher level. 
B) by reducing quantity demanded so that supply falls. 
C) by increasing supply, raising price, and reducing demand. 
D) by raising price and reducing quantity demanded.

Question 17

As a result of pure free trade in a commodity, the

Accepted Answer

A) price of the commodity must be the same in all countries. 
B) total quantity imported will exceed the total quantity exported. 
C) price of the commodity will be higher in the producing country. 
D) price of the commodity will be lower in the producing country. 
A) price of the commodity must be the same in all countries. 
B) total quantity imported will exceed the total quantity exported. 
C) price of the commodity will be higher in the producing country. 
D) price of the commodity will be lower in the producing country.

Question 18

Trade adjustment assistance in the United States began in 1962.The program

Accepted Answer

A) was designed to provide assistance to firms or workers who suffer idle facilities, unprofitability, and unemployment because of sharp increases in imports. 
B) provided little assistance to victims of free trade before the 1970s. 
C) was enlarged and worker benefits were extended in 1981 by the Reagan administration. 
D) All of the above are correct. 
A) was designed to provide assistance to firms or workers who suffer idle facilities, unprofitability, and unemployment because of sharp increases in imports. 
B) provided little assistance to victims of free trade before the 1970s. 
C) was enlarged and worker benefits were extended in 1981 by the Reagan administration. 
D) All of the above are correct.

Question 19

Why is comparative advantage rather than absolute advantage the basis for trade?

Accepted Answer

The concept of comparative advantage emp

Question 20

Talented people who are best at everything have a comparative advantage in the production of everything.

Accepted Answer

A) True 
 B)False

Exam 34: International Trade and Comparative Advantage

A nation can gain from imposing a tariff on imports if it forces exporting countries

Figure 34-5 ​ -From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that

Table 34-4 ​ -Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other, what will be the equilibrium price in the world market for television sets?

Among the impediments to the international mobility of capital are

The trade philosophy of the Clinton administration is best characterized as

The following table shows the units of output a worker can produce per month in country A and country B. The opportunity cost of a unit of electronics in Country B is

If two countries voluntarily trade two goods with one another, the rate of exchange between the goods must fall in between the price ratios that would prevail in the two countries in the absence of trade.

Voluntary exchange is based on the principle that all parties must gain from trade.

How does the imposition of a tariff reduce the price of imports?

Opening trade between a nation that has "cheap labor" and one that has "expensive labor" will

Trade between two nations is complicated by

Compare and contrast the effects of a quota and a tariff on imports.Be sure to include both short-run and long-run effects in your answer.

Table 34-4 ​ -Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States.If the United States and Japan decide to trade with each other, what will happen to the output of television sets in Japan?

The U.S.Constitution

"Free trade benefits one country at another country's expense." Evaluate this statement using economic analysis.

A tariff affects imports

As a result of pure free trade in a commodity, the

Trade adjustment assistance in the United States began in 1962.The program

Why is comparative advantage rather than absolute advantage the basis for trade?

Talented people who are best at everything have a comparative advantage in the production of everything.

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

Filters

Figure 34-5 -From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that

Table 34-4 -Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other, what will be the equilibrium price in the world market for television sets?

Table 34-4 -Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States.If the United States and Japan decide to trade with each other, what will happen to the output of television sets in Japan?