Question 1

Accepted Answer

A)  $0 revenue difference 
B)  $80 more revenue with a quota than with a tariff 
C)  $200 more revenue with a quota than with a tariff 
D)  $120 more revenue with a tariff than with a quota 
A)  $0 revenue difference 
B)  $80 more revenue with a quota than with a tariff 
C)  $200 more revenue with a quota than with a tariff 
D)  $120 more revenue with a tariff than with a quota

Question 2

Which of the following statements best describes a protective tariff?

Accepted Answer

A)  an excise tax that is usually applied to products that are not produced domestically in order to raise revenues for government 
B)  an excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets 
C)  a speciﬁcation of the maximum amount of a product that may be imported in any period of time that is often used to protect domestic producers of a product 
D)  such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protect
Domestic markets 
A)  an excise tax that is usually applied to products that are not produced domestically in order to raise revenues for government 
B)  an excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets 
C)  a speciﬁcation of the maximum amount of a product that may be imported in any period of time that is often used to protect domestic producers of a product 
D)  such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protect
Domestic markets

Question 3

Comparative advantage is another name for absolute advantage.

Accepted Answer

A) True 
 B)False

Question 4

What was the General Agreement on Tariffs and Trade (GATT)?

Accepted Answer

The General Agreement on Tariffs and Tra

Question 5

Refer to the diagram, which pertains to two nations and a speciﬁc product. In equilibrium, the nation represented by lines FA and FC will

Accepted Answer

A)  export H to the country represented by lines GB and GD. 
B)  import H from the country represented by lines GB and GD. 
C)  pay price F for its imports. 
D)  receive price G for its exports. 
A)  export H to the country represented by lines GB and GD. 
B)  import H from the country represented by lines GB and GD. 
C)  pay price F for its imports. 
D)  receive price G for its exports.

Question 6

Among the principal exports of the United States are agricultural products.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

Accepted Answer

A)  the increased domestic employment argument 
B)  the cheap foreign labor argument 
C)  the diversiﬁcation-for-stability argument 
D)  the infant industry argument 
A)  the increased domestic employment argument 
B)  the cheap foreign labor argument 
C)  the diversiﬁcation-for-stability argument 
D)  the infant industry argument

Question 8

What does it mean to have an absolute advantage in the production of two goods?

Accepted Answer

A country has an absolute advantage over

Question 9

In terms of absolute dollar volume, the top 3 leaders in world exports are

Accepted Answer

A)  Japan, China, and the European Union. 
B)  the United States, England, and Canada. 
C)  Germany, England, and the United States. 
D)  China, the United States, and Germany. 
A)  Japan, China, and the European Union. 
B)  the United States, England, and Canada. 
C)  Germany, England, and the United States. 
D)  China, the United States, and Germany.

Question 10

If a nation exports a product, then the price of that product in the nation

Accepted Answer

A)  will rise above the domestic (no-trade) equilibrium price. 
B)  will fall below the domestic (no-trade) equilibrium price. 
C)  will remain the same as the domestic (no-trade) equilibrium price. 
D)  may either rise or fall, depending on the product. 
A)  will rise above the domestic (no-trade) equilibrium price. 
B)  will fall below the domestic (no-trade) equilibrium price. 
C)  will remain the same as the domestic (no-trade) equilibrium price. 
D)  may either rise or fall, depending on the product.

Question 11

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity Demanded } \
\text { Domestically }
\end{array} & \text { Price } & \begin{array} { c } 
\text { Quantity Supplied } \
\text { Domestically }
\end{array} \
\hline 1,400 & \$ 10 & 2,200 \
\hline 1,600 & 9 & 2,000 \
\hline 1,800 & 8 & 1,800 \
\hline 2,000 & 7 & 1,600 \
\hline 2,200 & 6 & 1,400 \
\hline 2,400 & 5 & 1,200 \
\hline
\end{array}$$ Refer to the accompanying table for a certain product's market in Econland. If Econland was entirely closed to international trade, the equilibrium price and quantity would be

Accepted Answer

A)  $9 and 2,000 units. 
B)  $8 and 1,800 units. 
C)  $7 and 2,000 units. 
D)  $6 and 1,400 units. 
A)  $9 and 2,000 units. 
B)  $8 and 1,800 units. 
C)  $7 and 2,000 units. 
D)  $6 and 1,400 units.

Question 12

Which of the following statements about the European Union (EU) is true?

Accepted Answer

A)  All members of the EU use a common currency (the euro). 
B)  The EU has abolished most trade barriers among participating countries and has common tariffs applied to non-EU goods. 
C)  The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital. 
D)  Trade within the EU is liberalized, but EU nations set most of their own policies with regard to trade with non-EU nations. 
A)  All members of the EU use a common currency (the euro). 
B)  The EU has abolished most trade barriers among participating countries and has common tariffs applied to non-EU goods. 
C)  The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital. 
D)  Trade within the EU is liberalized, but EU nations set most of their own policies with regard to trade with non-EU nations.

Question 13

$$\begin{array} { | l | c | c | } 
\hline & \text { Machines } & \text { Wine } \
\hline \text { France } & 3 & 1 \
\hline \text { Germany } & 1 & 1 \
\hline
\end{array}$$ The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that

Accepted Answer

A)  France has an absolute advantage over Germany in producing either output. 
B)  Germany has an absolute disadvantage in producing wine. 
C)  Germany has no absolute advantage over France in producing either output. 
D)  France will see no economic basis for trading with Germany. 
A)  France has an absolute advantage over Germany in producing either output. 
B)  Germany has an absolute disadvantage in producing wine. 
C)  Germany has no absolute advantage over France in producing either output. 
D)  France will see no economic basis for trading with Germany.

Question 14

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Accepted Answer

A) True 
 B)False

Question 15

Studies show that

Accepted Answer

A)  it is impossible to estimate the beneﬁts of trade barriers. 
B)  costs and beneﬁts of trade barriers are about equal. 
C)  beneﬁts of trade barriers exceed their costs in developing nations. 
D)  costs of trade barriers exceed their beneﬁts, creating an eﬃciency loss for society. 
A)  it is impossible to estimate the beneﬁts of trade barriers. 
B)  costs and beneﬁts of trade barriers are about equal. 
C)  beneﬁts of trade barriers exceed their costs in developing nations. 
D)  costs of trade barriers exceed their beneﬁts, creating an eﬃciency loss for society.

Question 16

Export supply curves are __________________; import demand curves are ___________________.

Accepted Answer

A)  horizontal; vertical 
B)  vertical; horizontal 
C)  downsloping; upsloping 
D)  upsloping; downsloping 
A)  horizontal; vertical 
B)  vertical; horizontal 
C)  downsloping; upsloping 
D)  upsloping; downsloping

Question 17

In order for mutually beneﬁcial trade to occur between two otherwise isolated nations,

Accepted Answer

A)  each nation must be able to produce at least one good absolutely cheaper than the other. 
B)  each nation must be able to produce at least one good relatively cheaper than the other. 
C)  each nation must face constant costs in the production of the good it exports. 
D)  one nation's production must be labor-intensive, while the other nation's production is capital-intensive. 
A)  each nation must be able to produce at least one good absolutely cheaper than the other. 
B)  each nation must be able to produce at least one good relatively cheaper than the other. 
C)  each nation must face constant costs in the production of the good it exports. 
D)  one nation's production must be labor-intensive, while the other nation's production is capital-intensive.

Question 18

Accepted Answer

A)  $P _ { a } P _ { t } \times w y$ 
B)  $P _ { C } P _ { a } \times x$ 
C)  $P _ { c } P _ { t } \times w y$ 
D)  $P _ { C } P _ { t } \times z$ 
A)  $P _ { a } P _ { t } \times w y$ 
B)  $P _ { C } P _ { a } \times x$ 
C)  $P _ { c } P _ { t } \times w y$ 
D)  $P _ { C } P _ { t } \times z$

Question 19

When tariffs on imported products are removed by a nation, it will result in

Accepted Answer

A)  higher prices and lower quantities consumed in that nation. 
B)  higher prices and higher quantities consumed in that nation. 
C)  lower prices and lower quantities consumed in that nation. 
D)  lower prices and higher quantities consumed in that nation. 
A)  higher prices and lower quantities consumed in that nation. 
B)  higher prices and higher quantities consumed in that nation. 
C)  lower prices and lower quantities consumed in that nation. 
D)  lower prices and higher quantities consumed in that nation.

Question 20

What is the World Trade Organization and what assistance does it provide to its members?

Accepted Answer

The Uruguay Round agreement established

Which of the following statements best describes a protective tariff?

Comparative advantage is another name for absolute advantage.

What was the General Agreement on Tariffs and Trade (GATT)?

Refer to the diagram, which pertains to two nations and a speciﬁc product. In equilibrium, the nation represented by lines FA and FC will

Among the principal exports of the United States are agricultural products.

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

What does it mean to have an absolute advantage in the production of two goods?

In terms of absolute dollar volume, the top 3 leaders in world exports are

If a nation exports a product, then the price of that product in the nation

Which of the following statements about the European Union (EU) is true?

Machines Wine France 3 1 Germany 1 1 The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Studies show that

Export supply curves are ; import demand curves are _.

In order for mutually beneﬁcial trade to occur between two otherwise isolated nations,

When tariffs on imported products are removed by a nation, it will result in

What is the World Trade Organization and what assistance does it provide to its members?

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

Exam 20: International Trade

Which of the following statements best describes a protective tariff?

Comparative advantage is another name for absolute advantage.

What was the General Agreement on Tariffs and Trade (GATT)?

Refer to the diagram, which pertains to two nations and a speciﬁc product. In equilibrium, the nation represented by lines FA and FC will

Among the principal exports of the United States are agricultural products.

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

What does it mean to have an absolute advantage in the production of two goods?

In terms of absolute dollar volume, the top 3 leaders in world exports are

If a nation exports a product, then the price of that product in the nation

Which of the following statements about the European Union (EU) is true?

Machines Wine France 3 1 Germany 1 1 The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Studies show that

Export supply curves are __________________; import demand curves are ___________________.

In order for mutually beneﬁcial trade to occur between two otherwise isolated nations,

When tariffs on imported products are removed by a nation, it will result in

What is the World Trade Organization and what assistance does it provide to its members?

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

Export supply curves are ; import demand curves are _.