Question 1

A voluntary export restraint (VER)is similar to an import quota, except that the former benefits the foreign producers while the latter benefits the domestic producers.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and an import quota of 400 units were imposed on the product, then the equilibrium price in Econland would be

Accepted Answer

A) $6 and the total quantity available in Econland would be 2,200 units. 
B) $6 and the total quantity available in Econland would be 1,800 units. 
C) $7 and the total quantity available in Econland would be 2,000 units. 
D) $7 and the total quantity available in Econland would be 1,800 units. 
A) $6 and the total quantity available in Econland would be 2,200 units. 
B) $6 and the total quantity available in Econland would be 1,800 units. 
C) $7 and the total quantity available in Econland would be 2,000 units. 
D) $7 and the total quantity available in Econland would be 1,800 units.

Question 3

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.   If this nation were entirely closed to international trade, equilibrium price and quantity would be

Accepted Answer

A) $5 and 2 units. 
B) $1 and 1 unit. 
C) $4 and 4 units. 
D) $3 and 7 units. 
A) $5 and 2 units. 
B) $1 and 1 unit. 
C) $4 and 4 units. 
D) $3 and 7 units.

Question 4

Bastiat's "Petition of the Candlemakers," a classic reading in economics, presents a powerful argument in favor of protectionism.

Accepted Answer

A) True 
 B)False

Question 5

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, at what world price will it begin exporting some units of the product?

Accepted Answer

A) any price below $1.00 
B) any price above $1.00 
C) any price below $3.00 
D) any price above $3.00 
A) any price below $1.00 
B) any price above $1.00 
C) any price below $3.00 
D) any price above $3.00

Question 6

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, at the equilibrium world price,

Accepted Answer

A) both nations will export steel. 
B) both nations will import steel. 
C) Alpha will export steel and Beta will import steel. 
D) Beta will export steel and Alpha will import steel. 
A) both nations will export steel. 
B) both nations will import steel. 
C) Alpha will export steel and Beta will import steel. 
D) Beta will export steel and Alpha will import steel.

Question 7

An export subsidy for a product will benefit

Accepted Answer

A) domestic consumers of the product. 
B) foreign producers of the product. 
C) foreign consumers of the product. 
D) the domestic taxpayers. 
A) domestic consumers of the product. 
B) foreign producers of the product. 
C) foreign consumers of the product. 
D) the domestic taxpayers.

Question 8

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 of steel must be between

Accepted Answer

A) $5 and $4. 
B) $4 and $3. 
C) $3 and $2. 
D) $2 and $1. 
A) $5 and $4. 
B) $4 and $3. 
C) $3 and $2. 
D) $2 and $1.

Question 9

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

Accepted Answer

A) country A can produce more meat and houses than country B. 
B) country A has a comparative advantage in producing houses. 
C) country B has the absolute advantage in producing houses. 
D) country B has a comparative advantage in producing houses. 
A) country A can produce more meat and houses than country B. 
B) country A has a comparative advantage in producing houses. 
C) country B has the absolute advantage in producing houses. 
D) country B has a comparative advantage in producing houses.

Question 10

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 11

When a tariff or quota on a product is removed, this policy action

Accepted Answer

A) benefits domestic producers of the product. 
B) benefits consumers of the product. 
C) benefits the government. 
D) hurts nations exporting the product. 
A) benefits domestic producers of the product. 
B) benefits consumers of the product. 
C) benefits the government. 
D) hurts nations exporting the product.

Question 12

In 2018, the United States

Accepted Answer

A) imported more services than it exported. 
B) imported more goods than it exported. 
C) traded mainly with developing nations such as Mexico and India. 
D) had a small trade surplus in goods and services. 
A) imported more services than it exported. 
B) imported more goods than it exported. 
C) traded mainly with developing nations such as Mexico and India. 
D) had a small trade surplus in goods and services.

Question 13

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, at what world price will it begin exporting some units of the product?

Accepted Answer

A) any price above $9 
B) any price below $9 
C) any price above $15 
D) any price below $15 
A) any price above $9 
B) any price below $9 
C) any price above $15 
D) any price below $15

Question 14

Which of the following products is a leading import of the United States?

Accepted Answer

A) grains 
B) aircraft 
C) automobiles 
D) generating equipment 
A) grains 
B) aircraft 
C) automobiles 
D) generating equipment

Question 15

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 16

The greatest benefit to an economy from international trade is

Accepted Answer

A) greater employment in the export sector of the economy. 
B) the economic power it gives a nation over other countries. 
C) full employment of its labor force. 
D) consumption beyond domestic production possibilities. 
A) greater employment in the export sector of the economy. 
B) the economic power it gives a nation over other countries. 
C) full employment of its labor force. 
D) consumption beyond domestic production possibilities.

Question 17

A nation's export supply curve for a specific product

Accepted Answer

A) is upsloping. 
B) shows the amount of the product it will export at prices below its domestic price. 
C) lies below its import demand curve for the product. 
D) depends on domestic supply of the product, but not on domestic demand. 
A) is upsloping. 
B) shows the amount of the product it will export at prices below its domestic price. 
C) lies below its import demand curve for the product. 
D) depends on domestic supply of the product, but not on domestic demand.

Question 18

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 19

Country A limits other nation's exports to Country A to 1,000 tons of coal annually. This is an example of a(n)

Accepted Answer

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

Question 20

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.

Exam 26: International Trade

A voluntary export restraint (VER)is similar to an import quota, except that the former benefits the foreign producers while the latter benefits the domestic producers.

Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and an import quota of 400 units were imposed on the product, then the equilibrium price in Econland would be

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. If this nation were entirely closed to international trade, equilibrium price and quantity would be

Bastiat's "Petition of the Candlemakers," a classic reading in economics, presents a powerful argument in favor of protectionism.

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, at the equilibrium world price,

An export subsidy for a product will benefit

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 of steel must be between

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

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

When a tariff or quota on a product is removed, this policy action

In 2018, the United States

Which of the following products is a leading import of the United States?

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

The greatest benefit to an economy from international trade is

A nation's export supply curve for a specific product

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

Country A limits other nation's exports to Country A to 1,000 tons of coal annually. This is an example of a(n)

Frederic Bastiat's satire clearly illustrates that

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, at the equilibrium world price,

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 of steel must be between

Export supply curves are ; import demand curves are _.