Question 1

In a two-nation, two-good world, if both nations have identical production possibilities curves with constant costs, then one nation would have

Accepted Answer

A) no comparative advantage over the other nation. 
B) a comparative advantage in one good and a comparative disadvantage in the other good. 
C) no absolute advantage over the other nation. 
D) an absolute advantage in one good and an absolute disadvantage in the other good. 
A) no comparative advantage over the other nation. 
B) a comparative advantage in one good and a comparative disadvantage in the other good. 
C) no absolute advantage over the other nation. 
D) an absolute advantage in one good and an absolute disadvantage in the other good.

Question 2

If a nation has a comparative advantage in the production of X, this means the nation

Accepted Answer

A) cannot benefit by producing and trading this product. 
B) must give up less of other goods than other nations in producing a unit of X. 
C) has a production possibilities curve identical to those of other nations. 
D) is not subject to increasing opportunity costs. 
A) cannot benefit by producing and trading this product. 
B) must give up less of other goods than other nations in producing a unit of X. 
C) has a production possibilities curve identical to those of other nations. 
D) is not subject to increasing opportunity costs.

Question 3

In 2018, the United States became a net exporter of oil.

Accepted Answer

A) True 
 B)False

Question 4

"Offshoring" refers to

Accepted Answer

A) importing goods, services, and resources. 
B) stashing money in offshore accounts for the purpose of avoiding taxes. 
C) shifting work overseas that was previously done domestically. 
D) exporting key resources. 
A) importing goods, services, and resources. 
B) stashing money in offshore accounts for the purpose of avoiding taxes. 
C) shifting work overseas that was previously done domestically. 
D) exporting key resources.

Question 5

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 6

Refer to the diagram pertaining to two nations and a specific product. Lines FA and GB are

Accepted Answer

A) domestic supply curves for two countries. 
B) domestic demand curves for two countries. 
C) import demand curves for two countries. 
D) export supply curves for two countries. 
A) domestic supply curves for two countries. 
B) domestic demand curves for two countries. 
C) import demand curves for two countries. 
D) export supply curves for two countries.

Question 7

In a two-nation, two-good world, if country A has the comparative advantage in producing good X over country B, then country A

Accepted Answer

A) should not trade with country B. 
B) could have the comparative advantage in producing the other good, Y, as well. 
C) must have the comparative disadvantage in producing the other good, Y. 
D) can produce good X with fewer resources than country B. 
A) should not trade with country B. 
B) could have the comparative advantage in producing the other good, Y, as well. 
C) must have the comparative disadvantage in producing the other good, Y. 
D) can produce good X with fewer resources than country B.

Question 8

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size.   Assume the production possibilities in Beta double at alternatives A through E, while remaining as shown in the table for Alpha. As a result, Beta should

Accepted Answer

A) continue to specialize in producing chips. 
B) continue to specialize in fishing. 
C) no longer specialize and trade. 
D) specialize both in fishing and in producing chips and sell the surplus to Alpha. 
A) continue to specialize in producing chips. 
B) continue to specialize in fishing. 
C) no longer specialize and trade. 
D) specialize both in fishing and in producing chips and sell the surplus to Alpha.

Question 9

The World Trade Organization was established as a successor to

Accepted Answer

A) GATT. 
B) NAFTA. 
C) the EU. 
D) the Doha Development Agenda. 
A) GATT. 
B) NAFTA. 
C) the EU. 
D) the Doha Development Agenda.

Question 10

In a world with two products, wheat (W)and coffee (C), nation Alpha produces wheat and nation Beta produces coffee. Nation Alpha prefers an exchange rate of 1W = 2C, and nation Beta prefers an exchange rate of 1W = 1C. The exchange rate preferred by nation

Accepted Answer

A) Alpha will prevail if world demand for coffee is great relative to its supply. 
B) Alpha will prevail if world demand for wheat is weak relative to its supply. 
C) Beta will prevail if world demand for coffee is great relative to its supply. 
D) Beta will prevail if world demand for wheat is great relative to its supply. 
A) Alpha will prevail if world demand for coffee is great relative to its supply. 
B) Alpha will prevail if world demand for wheat is weak relative to its supply. 
C) Beta will prevail if world demand for coffee is great relative to its supply. 
D) Beta will prevail if world demand for wheat is great relative to its supply.

Question 11

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 12

Which of the following countries had the smallest share of exports as a percentage of GDP in 2018?

Accepted Answer

A) Canada 
B) Germany 
C) United Kingdom 
D) United States 
A) Canada 
B) Germany 
C) United Kingdom 
D) United States

Question 13

As of 2018, how many European nations belonged to the European Union (EU)?

Accepted Answer

A) All of the nations of Europe automatically belong to the EU. 
B) 17 
C) 28 
D) 10 
A) All of the nations of Europe automatically belong to the EU. 
B) 17 
C) 28 
D) 10

Question 14

Which of the following arguments contends that certain industries need to be protected in the interest of national security?

Accepted Answer

A) the increased domestic employment argument 
B) the cheap foreign labor argument 
C) the diversification-for-stability argument 
D) the military self-sufficiency argument 
A) the increased domestic employment argument 
B) the cheap foreign labor argument 
C) the diversification-for-stability argument 
D) the military self-sufficiency argument

Question 15

A tariff is a

Accepted Answer

A) tax. 
B) price ceiling. 
C) quantity limit. 
D) subsidy. 
A) tax. 
B) price ceiling. 
C) quantity limit. 
D) subsidy.

Question 16

As a percentage of GDP, U.S. exports are

Accepted Answer

A) greater than U.S. imports. 
B) about 20 percent. 
C) considerably lower than in several other industrially advanced nations. 
D) higher than in Canada but lower than in Germany. 
A) greater than U.S. imports. 
B) about 20 percent. 
C) considerably lower than in several other industrially advanced nations. 
D) higher than in Canada but lower than in Germany.

Question 17

List and describe the four basic types of trade barriers.

Accepted Answer

The four basic types of trade barriers a

Question 18

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Qd is domestic quantity demanded. Alpha's export supply is represented by

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 19

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia.   In Latalia the domestic real cost of 1 ton of pork

Accepted Answer

A) is 3 tons of beans. 
B) diminishes with the level of pork production. 
C) is 5 tons of beans. 
D) is 1/5 of a ton of beans. 
A) is 3 tons of beans. 
B) diminishes with the level of pork production. 
C) is 5 tons of beans. 
D) is 1/5 of a ton of beans.

Question 20

Tariffs

Accepted Answer

A) may be imposed either to raise revenue (revenue tariffs)or to shield domestic producers from foreign competition (protective tariffs). 
B) are also called import quotas. 
C) are excise taxes on goods exported abroad. 
D) are per-unit subsidies designed to promote exports. 
A) may be imposed either to raise revenue (revenue tariffs)or to shield domestic producers from foreign competition (protective tariffs). 
B) are also called import quotas. 
C) are excise taxes on goods exported abroad. 
D) are per-unit subsidies designed to promote exports.

Exam 26: International Trade

In a two-nation, two-good world, if both nations have identical production possibilities curves with constant costs, then one nation would have

If a nation has a comparative advantage in the production of X, this means the nation

In 2018, the United States became a net exporter of oil.

"Offshoring" refers to

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

Refer to the diagram pertaining to two nations and a specific product. Lines FA and GB are

In a two-nation, two-good world, if country A has the comparative advantage in producing good X over country B, then country A

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Assume the production possibilities in Beta double at alternatives A through E, while remaining as shown in the table for Alpha. As a result, Beta should

The World Trade Organization was established as a successor to

In a world with two products, wheat (W)and coffee (C), nation Alpha produces wheat and nation Beta produces coffee. Nation Alpha prefers an exchange rate of 1W = 2C, and nation Beta prefers an exchange rate of 1W = 1C. The exchange rate preferred by nation

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

Which of the following countries had the smallest share of exports as a percentage of GDP in 2018?

As of 2018, how many European nations belonged to the European Union (EU)?

Which of the following arguments contends that certain industries need to be protected in the interest of national security?

A tariff is a

As a percentage of GDP, U.S. exports are

List and describe the four basic types of trade barriers.

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Qd is domestic quantity demanded. Alpha's export supply is represented by

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia. In Latalia the domestic real cost of 1 ton of pork

Tariffs

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. Alpha's export supply is represented by