Question 1

Which is an example of a nontariff barrier (NTB)?

Accepted Answer

A) an export subsidy 
B) an excise tax on the physical volume of imported goods 
C) box-by-box inspection requirements for imported fruit 
D) an excise tax on the dollar value of imported goods 
A) an export subsidy 
B) an excise tax on the physical volume of imported goods 
C) box-by-box inspection requirements for imported fruit 
D) an excise tax on the dollar value of imported goods

Question 2

In Germany, one worker can produce either one cuckoo clock or one beer mug. In Taiwan, one worker can produce either two cuckoo clocks or three beer mugs. Who has the comparative advantage in each good?

Accepted Answer

A) Taiwan in both goods 
B) Taiwan in clocks and Germany in mugs 
C) Germany in clocks and Taiwan in mugs 
D) Germany in both goods 
A) Taiwan in both goods 
B) Taiwan in clocks and Germany in mugs 
C) Germany in clocks and Taiwan in mugs 
D) Germany in both goods

Question 3

The World Trade Organization (WTO)is an international organization designed to provide short-term advances of foreign monies to those nations faced with trade deficits.

Accepted Answer

A) True 
 B)False

Question 4

In 2018, U.S. exports of services ______ U.S. imports of services by about _____.

Accepted Answer

A) exceeded; $20 B 
B) fell short of; $20 B 
C) exceeded; $270 B 
D) fell short of; $220 B 
A) exceeded; $20 B 
B) fell short of; $20 B 
C) exceeded; $270 B 
D) fell short of; $220 B

Question 5

The imposition of a tariff on a product is least likely to result in a(n)

Accepted Answer

A) increase in efficiency in the domestic industry producing the product. 
B) increase in the price of the product. 
C) decrease in the quantity of imports. 
D) decrease in the real incomes of workers in other industries. 
A) increase in efficiency in the domestic industry producing the product. 
B) increase in the price of the product. 
C) decrease in the quantity of imports. 
D) decrease in the real incomes of workers in other industries.

Question 6

Cite three important reasons why nations trade.

Accepted Answer

Trade is beneficial in that (1)the distr

Question 7

Refer to the accompanying table for a certain product's market in Econland. If Econland was open to international trade and the world price was $6, then Econland would

Accepted Answer

A) import800units. 
B) import2,200units. 
C) export800units. 
D) export1,400units. 
A) import800units. 
B) import2,200units. 
C) export800units. 
D) export1,400units.

Question 8

The accompanying table shows labor-productivity figures in two countries facing constant costs. It can be deduced that

Accepted Answer

A) country A has the absolute advantage in producing both meat and houses. 
B) country B has the absolute advantage in producing both meat and houses. 
C) country A has a comparative advantage in producing both meat and houses. 
D) country B has a comparative advantage in producing both meat and houses. 
A) country A has the absolute advantage in producing both meat and houses. 
B) country B has the absolute advantage in producing both meat and houses. 
C) country A has a comparative advantage in producing both meat and houses. 
D) country B has a comparative advantage in producing both meat and houses.

Question 9

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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers, respectively, would be

Accepted Answer

A) v and vz. 
B) w and wy. 
C) w and wz. 
D) vx and xz. 
A) v and vz. 
B) w and wy. 
C) w and wz. 
D) vx and xz.

Question 10

Offshoring benefits some firms by reducing their producing costs and maintaining their global competitiveness.

Accepted Answer

A) True 
 B)False

Question 11

If countries A and B produce only either rubber bands or paper clips, their maximum outputs are shown in the accompanying production possibilities schedules. In country B the opportunity cost of 1 rubber band is

Accepted Answer

A) 4 paper clips. 
B) .25 paper clip. 
C) 2 paper clips. 
D) 40 paper clips. 
A) 4 paper clips. 
B) .25 paper clip. 
C) 2 paper clips. 
D) 40 paper clips.

Question 12

The law of increasing opportunity costs limits international specialization.

Accepted Answer

A) True 
 B)False

Question 13

An excise tax on an imported good that is not produced domestically is called a

Accepted Answer

A) protective tariff. 
B) import quota. 
C) revenue tariff. 
D) voluntary export restriction. 
A) protective tariff. 
B) import quota. 
C) revenue tariff. 
D) voluntary export restriction.

Question 14

It is impossible for a nation to have a comparative advantage in producing everything.

Accepted Answer

A) True 
 B)False

Question 15

Critics of the World Trade Organization (WTO)say that liberalized world trade does all of the following except

Accepted Answer

A) produce environmental degradation. 
B) allow producers to circumvent labor protections such as workplace safety, child labor restrictions, and collective bargaining rights. 
C) help developing nations escape from poverty. 
D) promote the interests of multinational corporations. 
A) produce environmental degradation. 
B) allow producers to circumvent labor protections such as workplace safety, child labor restrictions, and collective bargaining rights. 
C) help developing nations escape from poverty. 
D) promote the interests of multinational corporations.

Question 16

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. If the economy is opened to free trade, the price and quantity sold of this product would be

Accepted Answer

A) Pc and v. 
B) Pₐ and z. 
C) Pₜ and y. 
D) Pc and z. 
A) Pc and v. 
B) Pₐ and z. 
C) Pₜ and y. 
D) Pc and z.

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

From an economic perspective, studies of the costs of trade barriers show that they

Accepted Answer

A) are outweighed by the reduction in foreign competition provided by the barriers. 
B) are much less than benefits for domestic producers and workers. 
C) are about equal to the benefits from trade barriers. 
D) far exceed their benefits for society. 
A) are outweighed by the reduction in foreign competition provided by the barriers. 
B) are much less than benefits for domestic producers and workers. 
C) are about equal to the benefits from trade barriers. 
D) far exceed their benefits for society.

Question 19

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 a comparative advantage in producing wine. 
B) Germany has a comparative advantage in producing wine. 
C) neither country has a comparative advantage in producing wine. 
D) Germany can produce machines at a lower opportunity cost than France. 
A) France has a comparative advantage in producing wine. 
B) Germany has a comparative advantage in producing wine. 
C) neither country has a comparative advantage in producing wine. 
D) Germany can produce machines at a lower opportunity cost than France.

Question 20

If the world price of a product rises relative to the domestic price in a trading nation, then, for that product,

Accepted Answer

A) exports and imports will increase. 
B) exports and imports will decrease. 
C) exports will increase and imports will decrease. 
D) imports will increase and exports will decrease. 
A) exports and imports will increase. 
B) exports and imports will decrease. 
C) exports will increase and imports will decrease. 
D) imports will increase and exports will decrease.

Exam 26: International Trade

Which is an example of a nontariff barrier (NTB)?

In Germany, one worker can produce either one cuckoo clock or one beer mug. In Taiwan, one worker can produce either two cuckoo clocks or three beer mugs. Who has the comparative advantage in each good?

The World Trade Organization (WTO)is an international organization designed to provide short-term advances of foreign monies to those nations faced with trade deficits.

In 2018, U.S. exports of services ______ U.S. imports of services by about _____.

The imposition of a tariff on a product is least likely to result in a(n)

Cite three important reasons why nations trade.

Refer to the accompanying table for a certain product's market in Econland. If Econland was open to international trade and the world price was $6, then Econland would

The accompanying table shows labor-productivity figures in two countries facing constant costs. It can be deduced that

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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers, respectively, would be

Offshoring benefits some firms by reducing their producing costs and maintaining their global competitiveness.

If countries A and B produce only either rubber bands or paper clips, their maximum outputs are shown in the accompanying production possibilities schedules. In country B the opportunity cost of 1 rubber band is

The law of increasing opportunity costs limits international specialization.

An excise tax on an imported good that is not produced domestically is called a

It is impossible for a nation to have a comparative advantage in producing everything.

Critics of the World Trade Organization (WTO)say that liberalized world trade does all of the following except

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. If the economy is opened to free trade, the price and quantity sold of this product would be

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

From an economic perspective, studies of the costs of trade barriers show that they

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

If the world price of a product rises relative to the domestic price in a trading nation, then, for that product,

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

In 2018, U.S. exports of services __ U.S. imports of services by about _.

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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers, respectively, would be

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. If the economy is opened to free trade, the price and quantity sold of this product would be