Question 1

Other things equal, a tariff is

Accepted Answer

A) superior to an import quota for Americans because a tariff increases the profits of foreign producers. 
B) inferior to an import quota for Americans because a tariff increases the profits of domestic producers. 
C) superior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury. 
D) inferior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury. 
A) superior to an import quota for Americans because a tariff increases the profits of foreign producers. 
B) inferior to an import quota for Americans because a tariff increases the profits of domestic producers. 
C) superior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury. 
D) inferior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury.

Question 2

In the United States, exports of goods and services accounted for about what percentage of GDP (total output)in 2018?

Accepted Answer

A) 6 percent 
B) 12 percent 
C) 24 percent 
D) 42 percent 
A) 6 percent 
B) 12 percent 
C) 24 percent 
D) 42 percent

Question 3

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Qd is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1,

Accepted Answer

A) Beta wants to import more than Alpha. 
B) Alpha wants to export more than Beta. 
C) both nations want to export steel. 
D) both nations want to import steel. 
A) Beta wants to import more than Alpha. 
B) Alpha wants to export more than Beta. 
C) both nations want to export steel. 
D) both nations want to import steel.

Question 4

In effect, tariffs on imports are

Accepted Answer

A) special taxes on domestic producers. 
B) subsidies to domestic consumers. 
C) subsidies to foreign producers. 
D) subsidies for domestic producers. 
A) special taxes on domestic producers. 
B) subsidies to domestic consumers. 
C) subsidies to foreign producers. 
D) subsidies for domestic producers.

Question 5

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 6

What insights about international trade came from Adam Smith and David Ricardo?

Accepted Answer

In 1776, Adam Smith used the concept of

Question 7

The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically produced product that is now

Accepted Answer

A) lower in price because import competition has risen. 
B) higher in price because import competition has risen. 
C) higher in price because import competition has declined. 
D) lower in price because import competition has declined. 
A) lower in price because import competition has risen. 
B) higher in price because import competition has risen. 
C) higher in price because import competition has declined. 
D) lower in price because import competition has declined.

Question 8

Refer to the accompanying production possibilities tables. Data are in millions of units. Suppose that each nation specialized in producing the product for which it has a comparative advantage and the terms of trade were set at 3 units of chemicals for 1 unit of autos. In this case, Germany could obtain and consume a maximum combination of 8 million units of autos and

Accepted Answer

A) 12 million units of chemicals. 
B) 24 million units of chemicals. 
C) 36 million units of chemicals. 
D) 48 million units of chemicals. 
A) 12 million units of chemicals. 
B) 24 million units of chemicals. 
C) 36 million units of chemicals. 
D) 48 million units of chemicals.

Question 9

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 (Qd), and Column 3 is the quantity supplied domestically (Qₛd). If Country X opens itself up to international trade and the world-market price of the product is $3, then Country X will

Accepted Answer

A) neither export nor import the product. 
B) export some units of the product. 
C) import some units of the product. 
D) not produce the product. 
A) neither export nor import the product. 
B) export some units of the product. 
C) import some units of the product. 
D) not produce the product.

Question 10

Refer to the graph, which shows the domestic demand and supply curves for a specific product in a hypothetical nation called Econland. If the world price for this product is $2.00, then Econland will

Accepted Answer

A) export 200 units. 
B) export 400 units. 
C) import 200 units. 
D) import 400 units. 
A) export 200 units. 
B) export 400 units. 
C) import 200 units. 
D) import 400 units.

Question 11

Refer to the accompanying graph, where Sd and Dd are the domestic supply and demand for a product. The world price of the product is $6. What would be the difference in the total revenue received by foreign producers after a quota of 20 units is imposed compared with the total revenue received by foreign producers when a $4 per unit tariff is imposed?

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 12

The number of countries belonging to the World Trade Organization (WTO), as of 2018, is about

Accepted Answer

A) 164. 
B) 125. 
C) 80. 
D) 202. 
A) 164. 
B) 125. 
C) 80. 
D) 202.

Question 13

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With a Pc Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be

Accepted Answer

A) xz and x. 
B) xv and xz. 
C) x and xz. 
D) wy and w. 
A) xz and x. 
B) xv and xz. 
C) x and xz. 
D) wy and w.

Question 14

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case,

Accepted Answer

A) Korea has a comparative advantage in the production of wheat. 
B) the United States has a comparative advantage in the production of televisions. 
C) mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States. 
D) mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States. 
A) Korea has a comparative advantage in the production of wheat. 
B) the United States has a comparative advantage in the production of televisions. 
C) mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States. 
D) mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States.

Question 15

Suppose the domestic price (no-international-trade price)of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

Accepted Answer

A) have a domestic shortage of wheat. 
B) export wheat. 
C) import wheat. 
D) neither export nor import wheat. 
A) have a domestic shortage of wheat. 
B) export wheat. 
C) import wheat. 
D) neither export nor import wheat.

Question 16

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size.   Suppose that before specialization and trade, Alpha chose production alternative C and Beta chose production alternative B. After specialization and trade, the gains will be

Accepted Answer

A) 20 tons of fish. 
B) 20 tons of chips. 
C) 20 tons of fish and 20 tons of chips. 
D) 240 tons of fish and 20 tons of chips. 
A) 20 tons of fish. 
B) 20 tons of chips. 
C) 20 tons of fish and 20 tons of chips. 
D) 240 tons of fish and 20 tons of chips.

Question 17

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 18

Employing all its available resources, Nation Alpha can produce either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of clothing.

Accepted Answer

A) Nation Alpha has a comparative advantage in producing clothing. 
B) Nation Beta has a comparative advantage in producing chemicals. 
C) Nation Alpha has a comparative advantage in producing chemicals. 
D) Nation Beta is the high-cost producer of clothing. 
A) Nation Alpha has a comparative advantage in producing clothing. 
B) Nation Beta has a comparative advantage in producing chemicals. 
C) Nation Alpha has a comparative advantage in producing chemicals. 
D) Nation Beta is the high-cost producer of clothing.

Question 19

An example of a nontariff barrier would be

Accepted Answer

A) a minimum limit on the quantity of imports. 
B) excessive licensing requirements. 
C) a tax on an imported product. 
D) voluntary export restraints. 
A) a minimum limit on the quantity of imports. 
B) excessive licensing requirements. 
C) a tax on an imported product. 
D) voluntary export restraints.

Question 20

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Accepted Answer

A) True 
 B)False

Exam 26: International Trade

Other things equal, a tariff is

In the United States, exports of goods and services accounted for about what percentage of GDP (total output)in 2018?

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Qd is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1,

In effect, tariffs on imports are

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

What insights about international trade came from Adam Smith and David Ricardo?

The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically produced product that is now

Refer to the graph, which shows the domestic demand and supply curves for a specific product in a hypothetical nation called Econland. If the world price for this product is $2.00, then Econland will

The number of countries belonging to the World Trade Organization (WTO), as of 2018, is about

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With a Pc Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case,

Suppose the domestic price (no-international-trade price)of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Suppose that before specialization and trade, Alpha chose production alternative C and Beta chose production alternative B. After specialization and trade, the gains will be

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

Employing all its available resources, Nation Alpha can produce either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of clothing.

An example of a nontariff barrier would be

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Limits, Alternatives, and Choices

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

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, RD, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Q_d is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1,

Refer to the diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product. With a P_c Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be