Question 1

The United States has relatively low tariffs.

Accepted Answer

A) True 
 B)False

Question 2

Absolute advantage is the ability to produce a good using fewer inputs than another producer.

Accepted Answer

A) True 
 B)False

Question 3

After the American Civil War, many prominent Southerners lamented the fact that the South "overproduced" cotton and "underproduced" food. In fact, the South did import a very large percentage of its food. Nevertheless, rather than reduce cotton production and grow more food, Southern farmers did the opposite because

Accepted Answer

A)  they were irrational and distraught over the loss of slavery. 
B)  the South had a comparative advantage in cotton production. 
C)  the North had a comparative advantage in cotton production. 
D)  corn was absolutely cheaper to produce in the North. 
A)  they were irrational and distraught over the loss of slavery. 
B)  the South had a comparative advantage in cotton production. 
C)  the North had a comparative advantage in cotton production. 
D)  corn was absolutely cheaper to produce in the North.

Question 4

The following table shows the units of output a worker can produce per month in country A and country B. Country   The opportunity cost of a unit of electronics in Country B is

Accepted Answer

A)  3 units of food. 
B)  2 units of food. 
C)  5 units of food. 
D)  none of these. 
A)  3 units of food. 
B)  2 units of food. 
C)  5 units of food. 
D)  none of these.

Question 5

Figure 34-5
 
From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that

Accepted Answer

A)  in terms of TVs, computers are more expensive in China than Japan. 
B)  in terms of computers, TVs are more expensive in China than Japan. 
C)  China should produce more TVs and fewer computers. 
D)  All of the above are correct. 
A)  in terms of TVs, computers are more expensive in China than Japan. 
B)  in terms of computers, TVs are more expensive in China than Japan. 
C)  China should produce more TVs and fewer computers. 
D)  All of the above are correct.

Question 6

Ideally, a free trade policy should be accompanied by

Accepted Answer

A)  a public education program to make the benefits known. 
B)  open borders and amnesty for all undocumented workers. 
C)  programs to ensure no one loses a job as a result of foreign competition. 
D)  programs to assist workers who lose their jobs to foreign competition. 
A)  a public education program to make the benefits known. 
B)  open borders and amnesty for all undocumented workers. 
C)  programs to ensure no one loses a job as a result of foreign competition. 
D)  programs to assist workers who lose their jobs to foreign competition.

Question 7

Opening trade between a nation that has "cheap labor" and one that has "expensive labor" will

Accepted Answer

A)  lower the standard of living in both countries. 
B)  raise the standard of living in both countries. 
C)  make some workers less efficient. 
D)  lead to an inappropriate allocation of resources. 
A)  lower the standard of living in both countries. 
B)  raise the standard of living in both countries. 
C)  make some workers less efficient. 
D)  lead to an inappropriate allocation of resources.

Question 8

A quota is

Accepted Answer

A)  a tax on exported items. 
B)  a tax on imported items. 
C)  a limit on the amount of imports. 
D)  a subsidy to export. 
A)  a tax on exported items. 
B)  a tax on imported items. 
C)  a limit on the amount of imports. 
D)  a subsidy to export.

Question 9

Even though international trade is more complicated, supply and demand are still at the center of the price determination mechanism.

Accepted Answer

A) True 
 B)False

Question 10

In a situation of free trade,

Accepted Answer

A)  countries with comparative advantage will export more than countries with comparative disadvantage import. 
B)  the total quantity of an item exported will be greater than the total quantity imported. 
C)  importing countries will always produce some good, so that total quantity imported is less than total quantity exported. 
D)  the total quantity of an item exported will equal the total quantity imported. 
A)  countries with comparative advantage will export more than countries with comparative disadvantage import. 
B)  the total quantity of an item exported will be greater than the total quantity imported. 
C)  importing countries will always produce some good, so that total quantity imported is less than total quantity exported. 
D)  the total quantity of an item exported will equal the total quantity imported.

Question 11

American producers often complain about dumping. What is dumping, and should it be prohibited?

Accepted Answer

Dumping refers to selling exports at a p

Question 12

A quota sets the maximum amount of a good that is permitted into a country.

Accepted Answer

A) True 
 B)False

Question 13

Using graphs to illustrate the concepts, absolute advantage

Accepted Answer

A)  is shown with differences in slope of a production possibilities curve; comparative advantage is shown with a lower curve. 
B)  requires a very steep curve; comparative advantage requires a curve with a shallow slope. 
C)  on one good requires that the slope of the production possibilities curve be steeper for that good. 
D)  is shown with a higher production possibilities curve; comparative advantage is shown with differences in slope of the curves. 
A)  is shown with differences in slope of a production possibilities curve; comparative advantage is shown with a lower curve. 
B)  requires a very steep curve; comparative advantage requires a curve with a shallow slope. 
C)  on one good requires that the slope of the production possibilities curve be steeper for that good. 
D)  is shown with a higher production possibilities curve; comparative advantage is shown with differences in slope of the curves.

Question 14

Suppose that the United States can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude that

Accepted Answer

A)  the United States has a comparative advantage in the production of cars. 
B)  France has a comparative advantage in the production of wine. 
C)  the United States has an absolute advantage in the production of cars. 
D)  All of the above are correct. 
A)  the United States has a comparative advantage in the production of cars. 
B)  France has a comparative advantage in the production of wine. 
C)  the United States has an absolute advantage in the production of cars. 
D)  All of the above are correct.

Question 15

The two primary reasons to adopt measures to restrict trade are that

Accepted Answer

A)  they help keep real wages high in the importing country, and they also permit small businesses to compete in international markets. 
B)  they may help the importing country improve its educational system, and they keep high-technology products from being stolen by foreign competitors. 
C)  they may help the importing country get better prices for its goods, and they protect certain industries from foreign competition. 
D)  they may help advance the political goals of the nation, and they encourage productivity in domestic industries. 
A)  they help keep real wages high in the importing country, and they also permit small businesses to compete in international markets. 
B)  they may help the importing country improve its educational system, and they keep high-technology products from being stolen by foreign competitors. 
C)  they may help the importing country get better prices for its goods, and they protect certain industries from foreign competition. 
D)  they may help advance the political goals of the nation, and they encourage productivity in domestic industries.

Question 16

Suppose that a quota is imposed on imports of minivans. Show graphically what the effect is in terms of price and quantity of imports. Be sure that your graph is completely and correctly labeled. What determines how much of the quota is paid by the buyers of the minivans?

Accepted Answer

Figure 34-13 
 
 @#IMG-DLM& 
See Figure 34-13. The

Question 17

If the United States imposes a tariff on the import of Japanese cars instead of a quota, the price

Accepted Answer

A)  increase in Japanese cars goes into the revenue of U.S. automakers. 
B)  increase in Japanese cars goes into the revenue of Japanese automakers. 
C)  increase in Japanese cars goes into the revenue of the U.S. government. 
D)  decrease in Japanese cars comes out of the revenue of U.S. automakers. 
E)  decrease in Japanese cars comes out of the revenue of the U.S. government. 
A)  increase in Japanese cars goes into the revenue of U.S. automakers. 
B)  increase in Japanese cars goes into the revenue of Japanese automakers. 
C)  increase in Japanese cars goes into the revenue of the U.S. government. 
D)  decrease in Japanese cars comes out of the revenue of U.S. automakers. 
E)  decrease in Japanese cars comes out of the revenue of the U.S. government.

Question 18

An export subsidy helps reduce the selling price of a product by allowing individual producers to charge less and still cover all of their production costs.

Accepted Answer

A) True 
 B)False

Question 19

Exports are goods produced domestically and sold abroad.

Accepted Answer

A) True 
 B)False

Question 20

In discussing trade, it is ____ that matters rather than ____.

Accepted Answer

A)  absolute advantage; elastic advantage 
B)  comparative advantage; absolute advantage 
C)  entire advantage; comparative advantage 
D)  elastic advantage; entire advantage 
E)  declarative advantage; absolute advantage 
A)  absolute advantage; elastic advantage 
B)  comparative advantage; absolute advantage 
C)  entire advantage; comparative advantage 
D)  elastic advantage; entire advantage 
E)  declarative advantage; absolute advantage

The United States has relatively low tariffs.

Absolute advantage is the ability to produce a good using fewer inputs than another producer.

The following table shows the units of output a worker can produce per month in country A and country B. Country The opportunity cost of a unit of electronics in Country B is

Figure 34-5 From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that

Ideally, a free trade policy should be accompanied by

Opening trade between a nation that has "cheap labor" and one that has "expensive labor" will

A quota is

Even though international trade is more complicated, supply and demand are still at the center of the price determination mechanism.

In a situation of free trade,

American producers often complain about dumping. What is dumping, and should it be prohibited?

A quota sets the maximum amount of a good that is permitted into a country.

Using graphs to illustrate the concepts, absolute advantage

Suppose that the United States can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude that

The two primary reasons to adopt measures to restrict trade are that

Suppose that a quota is imposed on imports of minivans. Show graphically what the effect is in terms of price and quantity of imports. Be sure that your graph is completely and correctly labeled. What determines how much of the quota is paid by the buyers of the minivans?

If the United States imposes a tariff on the import of Japanese cars instead of a quota, the price

An export subsidy helps reduce the selling price of a product by allowing individual producers to charge less and still cover all of their production costs.

Exports are goods produced domestically and sold abroad.

In discussing trade, it is that matters rather than .

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters

Exam 34: International Trade and Comparative Advantage

The United States has relatively low tariffs.

Absolute advantage is the ability to produce a good using fewer inputs than another producer.

The following table shows the units of output a worker can produce per month in country A and country B. Country The opportunity cost of a unit of electronics in Country B is

Figure 34-5 From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that

Ideally, a free trade policy should be accompanied by

Opening trade between a nation that has "cheap labor" and one that has "expensive labor" will

A quota is

Even though international trade is more complicated, supply and demand are still at the center of the price determination mechanism.

In a situation of free trade,

American producers often complain about dumping. What is dumping, and should it be prohibited?

A quota sets the maximum amount of a good that is permitted into a country.

Using graphs to illustrate the concepts, absolute advantage

Suppose that the United States can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude that

The two primary reasons to adopt measures to restrict trade are that

Suppose that a quota is imposed on imports of minivans. Show graphically what the effect is in terms of price and quantity of imports. Be sure that your graph is completely and correctly labeled. What determines how much of the quota is paid by the buyers of the minivans?

If the United States imposes a tariff on the import of Japanese cars instead of a quota, the price

An export subsidy helps reduce the selling price of a product by allowing individual producers to charge less and still cover all of their production costs.

Exports are goods produced domestically and sold abroad.

In discussing trade, it is ____ that matters rather than ____.

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters

In discussing trade, it is that matters rather than .