Question 1

Production of goods and services require different mixes of resources. Discuss the three different
production resource intensities and give examples of each.

Accepted Answer

Labor-intensive goods are products requi

Question 2

Refer to the graph, which shows the import demand and export supply curves for two nations that produce a certain product. Lines 6 and 8 apply to one nation and represent, respectively,

Accepted Answer

A)  import demand and export supply. 
B)  export supply and import demand. 
C)  domestic supply and domestic demand. 
D)  domestic demand and domestic supply. 
A)  import demand and export supply. 
B)  export supply and import demand. 
C)  domestic supply and domestic demand. 
D)  domestic demand and domestic supply.

Question 3

If the United States government were to impose a quota on wristwatches imported from Switzerland, then the

Accepted Answer

A)  price of wristwatches in the United States would decrease and total quantity consumed (domestic and imported) would increase. 
B)  prices of wristwatches in Switzerland would rise, and that's how Switzerland would be hurt by the quota. 
C)  price of wristwatches in the United States would remain the same, but the quantity would fall as imports fell. 
D)  total quantity of wristwatches (domestic and imported) purchased would decline as prices rose. 
A)  price of wristwatches in the United States would decrease and total quantity consumed (domestic and imported) would increase. 
B)  prices of wristwatches in Switzerland would rise, and that's how Switzerland would be hurt by the quota. 
C)  price of wristwatches in the United States would remain the same, but the quantity would fall as imports fell. 
D)  total quantity of wristwatches (domestic and imported) purchased would decline as prices rose.

Question 4

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reﬂect differences in

Accepted Answer

A)  consumer tastes and preferences. 
B)  resource availability and technological capabilities. 
C)  the nations' incomes and income distribution. 
D)  unemployment and inﬂation rates. 
A)  consumer tastes and preferences. 
B)  resource availability and technological capabilities. 
C)  the nations' incomes and income distribution. 
D)  unemployment and inﬂation rates.

Question 5

An import-licensing requirement or import restrictions pertaining to the product quality and safety are examples of

Accepted Answer

A)  protective tariffs. 
B)  nontariff barriers. 
C)  voluntary export restrictions. 
D)  quotas on imported products. 
A)  protective tariffs. 
B)  nontariff barriers. 
C)  voluntary export restrictions. 
D)  quotas on imported products.

Question 6

Which is more effective in blocking imports, a tariff or a quota?

Accepted Answer

Import quotas are more effective than ta

Question 7

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-suﬃcient if necessary?

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

Other things equal, economists would prefer

Accepted Answer

A)  free trade to tariffs and tariffs to import quotas. 
B)  free trade to import quotas and import quotas to tariffs. 
C)  import quotas to tariffs and tariffs to voluntary export restrictions. 
D)  import quotas to free trade and free trade to tariffs. 
A)  free trade to tariffs and tariffs to import quotas. 
B)  free trade to import quotas and import quotas to tariffs. 
C)  import quotas to tariffs and tariffs to voluntary export restrictions. 
D)  import quotas to free trade and free trade to tariffs.

Question 9

(Last Word) Frederic Bastiat's satire clearly illustrates that

Accepted Answer

A)  French candlemakers would beneﬁt from government restrictions on trade. 
B)  French consumers would beneﬁt from a tariff on U.S. candles. 
C)  the arguments in favor of trade protectionism can sometimes be ridiculous. 
D)  the arguments in favor of protectionism are sometimes well-founded. 
A)  French candlemakers would beneﬁt from government restrictions on trade. 
B)  French consumers would beneﬁt from a tariff on U.S. candles. 
C)  the arguments in favor of trade protectionism can sometimes be ridiculous. 
D)  the arguments in favor of protectionism are sometimes well-founded.

Question 10

State how the world economy can beneﬁt from free trade.

Accepted Answer

Through free trade, the world economy ca

Question 11

Which of the following statements is true about the alleged beneﬁts and adverse effects of trade barriers?

Accepted Answer

A)  The alleged beneﬁts like "saved jobs" are limited to a narrow sector of the economy and clearly seen by the general public, while the adverse effects tend to be obscure and
Dispersed. 
B)  The general public does not have much interest in trade and trade barriers because their effects are very small. 
C)  The alleged beneﬁts of trade barriers tend to be spread over the whole economy, while their adverse effects are narrow and concentrated on a small sector. 
D)  The U.S. does not really have any signiﬁcant trade barriers. That's why there is not much debate about them. 
A)  The alleged beneﬁts like "saved jobs" are limited to a narrow sector of the economy and clearly seen by the general public, while the adverse effects tend to be obscure and
Dispersed. 
B)  The general public does not have much interest in trade and trade barriers because their effects are very small. 
C)  The alleged beneﬁts of trade barriers tend to be spread over the whole economy, while their adverse effects are narrow and concentrated on a small sector. 
D)  The U.S. does not really have any signiﬁcant trade barriers. That's why there is not much debate about them.

Question 12

Accepted Answer

A)  lower domestic price and increase domestic consumption. 
B)  increase the revenues of domestic producers by areas E + F + K. 
C)  increase the revenues of domestic producers by areas G + H. 
D)  increase the revenues of domestic producers by areas E + F + G + H + J. 
A)  lower domestic price and increase domestic consumption. 
B)  increase the revenues of domestic producers by areas E + F + K. 
C)  increase the revenues of domestic producers by areas G + H. 
D)  increase the revenues of domestic producers by areas E + F + G + H + J.

Question 13

NAFTA

Accepted Answer

A)  has increased the standard of living in the North African member nations. 
B)  beneﬁts workers in the participating nations but hurts consumers by raising prices. 
C)  allows completely unrestricted movement of goods, services, and resources between the member nations. 
D)  has reduced most trade barriers between Canada, Mexico, and the United States. 
A)  has increased the standard of living in the North African member nations. 
B)  beneﬁts workers in the participating nations but hurts consumers by raising prices. 
C)  allows completely unrestricted movement of goods, services, and resources between the member nations. 
D)  has reduced most trade barriers between Canada, Mexico, and the United States.

Question 14

Which of the following is an example of a capital-intensive commodity?

Accepted Answer

A)  clothing 
B)  wool 
C)  sunﬂower seeds 
D)  chemicals 
A)  clothing 
B)  wool 
C)  sunﬂower seeds 
D)  chemicals

Question 15

$ \quad\quad { Country ~X } $
$\begin{array} { | c | c | c | } 
\hline Price & Q _ { d d } & Q _ { S d } \
\hline \$ 5.00 & 200 & 400 \
\hline 4.00 & 250 & 350 \
\hline 3.00 & 300 & 300 \
\hline 2.00 & 350 & 250 \
\hline 1.00 & 400 & 200 \
\hline
\end{array}$
The accompanying table gives data for Country $X$. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically $\left( Q _ { d d } \right)$, and Column 3 is the quantity supplied domestically $\left( Q _ { S d } \right)$. At what price will Country $X$ import 100 units of the product?

Accepted Answer

A)  $4.00 
B)  $3.00 
C)  $2.00 
D)  $1.00 
A)  $4.00 
B)  $3.00 
C)  $2.00 
D)  $1.00

Question 16

The nation that has a comparative advantage in a particular product will be the only world exporter
of that product.

Accepted Answer

A) True 
 B)False

Question 17

The slopes of the production possibilities curves for two nations reﬂect the

Accepted Answer

A)  relative prices of the resources in the two nations. 
B)  amounts of imports and exports of the two nations. 
C)  average income levels in the two nations. 
D)  opportunity costs of production in the two nations. 
A)  relative prices of the resources in the two nations. 
B)  amounts of imports and exports of the two nations. 
C)  average income levels in the two nations. 
D)  opportunity costs of production in the two nations.

Question 18

The percentage of the United States' domestic output that is derived from international trade is
higher than that for any other industrially advanced nation.

Accepted Answer

A) True 
 B)False

Question 19

The terms of trade reﬂect the

Accepted Answer

A)  rate at which gold exchanges internationally for any domestic currency. 
B)  ratio at which nations will exchange two goods. 
C)  fact that the gains from trade will be equally divided. 
D)  cost conditions embodied in a single country's production possibilities curve. 
A)  rate at which gold exchanges internationally for any domestic currency. 
B)  ratio at which nations will exchange two goods. 
C)  fact that the gains from trade will be equally divided. 
D)  cost conditions embodied in a single country's production possibilities curve.

Question 20

The World Trade Organization comprises 28 European nations and is dedicated to abolishing trade
barriers and integrating their economies.

Accepted Answer

A) True 
 B)False

Production of goods and services require different mixes of resources. Discuss the three different production resource intensities and give examples of each.

Refer to the graph, which shows the import demand and export supply curves for two nations that produce a certain product. Lines 6 and 8 apply to one nation and represent, respectively,

If the United States government were to impose a quota on wristwatches imported from Switzerland, then the

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reﬂect differences in

An import-licensing requirement or import restrictions pertaining to the product quality and safety are examples of

Which is more effective in blocking imports, a tariff or a quota?

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-suﬃcient if necessary?

Other things equal, economists would prefer

(Last Word) Frederic Bastiat's satire clearly illustrates that

State how the world economy can beneﬁt from free trade.

Which of the following statements is true about the alleged beneﬁts and adverse effects of trade barriers?

NAFTA

Which of the following is an example of a capital-intensive commodity?

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.

The slopes of the production possibilities curves for two nations reﬂect the

The percentage of the United States' domestic output that is derived from international trade is higher than that for any other industrially advanced nation.

The terms of trade reﬂect the

The World Trade Organization comprises 28 European nations and is dedicated to abolishing trade barriers and integrating their economies.

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

Production of goods and services require different mixes of resources. Discuss the three different production resource intensities and give examples of each.

Refer to the graph, which shows the import demand and export supply curves for two nations that produce a certain product. Lines 6 and 8 apply to one nation and represent, respectively,

If the United States government were to impose a quota on wristwatches imported from Switzerland, then the

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reﬂect differences in

An import-licensing requirement or import restrictions pertaining to the product quality and safety are examples of

Which is more effective in blocking imports, a tariff or a quota?

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-suﬃcient if necessary?

Other things equal, economists would prefer

(Last Word) Frederic Bastiat's satire clearly illustrates that

State how the world economy can beneﬁt from free trade.

Which of the following statements is true about the alleged beneﬁts and adverse effects of trade barriers?

NAFTA

Which of the following is an example of a capital-intensive commodity?

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.

The slopes of the production possibilities curves for two nations reﬂect the

The percentage of the United States' domestic output that is derived from international trade is higher than that for any other industrially advanced nation.

The terms of trade reﬂect the

The World Trade Organization comprises 28 European nations and is dedicated to abolishing trade barriers and integrating their economies.

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