Question 1

Table 34-3   The data in Table 34-3 indicate that the United States has

Accepted Answer

A) an absolute advantage in both goods, and a comparative advantage in cotton. 
B) an absolute advantage in both goods, and a comparative advantage in wheat. 
C) only a comparative advantage in wheat. 
D) only a comparative advantage in cotton. 
A) an absolute advantage in both goods, and a comparative advantage in cotton. 
B) an absolute advantage in both goods, and a comparative advantage in wheat. 
C) only a comparative advantage in wheat. 
D) only a comparative advantage in cotton.

Question 2

Table 34-4   Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States. If the United States and Japan trade with each other, what will happen to the output of television sets in the United States?

Accepted Answer

A) TV production in the United States will fall by 10,000 units. 
B) TV production in the United States will fall by 20,000 units. 
C) TV production in the United States will fall by 30,000 units. 
D) TV production in the United States will increase by 10,000 units. 
A) TV production in the United States will fall by 10,000 units. 
B) TV production in the United States will fall by 20,000 units. 
C) TV production in the United States will fall by 30,000 units. 
D) TV production in the United States will increase by 10,000 units.

Question 3

The estimated cost of automobile jobs saved due to limitations on foreign autos is $105,000 per job. Why is there a cost to saving jobs through protectionism?

Accepted Answer

When foreign cars are limited, consumers

Question 4

Figure 34-9 ​
 
In Figure 34-9, hostilities break out between Pastaland and Pestoland after Pestoland violates the Treaty of Basil. Consequently, trade stops and the price of pasta

Accepted Answer

A) rises to OJ in both countries. 
B) falls to OC in both countries. 
C) falls to OC in Pastaland and rises to OJ in Pestoland. 
D) rises to OJ in Pastaland and falls to OC in Pestoland. 
A) rises to OJ in both countries. 
B) falls to OC in both countries. 
C) falls to OC in Pastaland and rises to OJ in Pestoland. 
D) rises to OJ in Pastaland and falls to OC in Pestoland.

Question 5

A complicating factor in international trade is that

Accepted Answer

A) barter is the basis for trade between countries; money is not used. 
B) gold is used for payments; there are no international payments without gold. 
C) many other countries prefer to use the U.S. dollar as currency, causing monetary shortage in the United States. 
D) trade between countries requires different currencies rather than one currency. 
A) barter is the basis for trade between countries; money is not used. 
B) gold is used for payments; there are no international payments without gold. 
C) many other countries prefer to use the U.S. dollar as currency, causing monetary shortage in the United States. 
D) trade between countries requires different currencies rather than one currency.

Question 6

Figure 34-10 ​
 
Figure 34-10 shows the effect on the market for disk drives of a(n)

Accepted Answer

A) quota. 
B) tariff. 
C) export subsidy. 
D) import subsidy. 
E) export tax. 
A) quota. 
B) tariff. 
C) export subsidy. 
D) import subsidy. 
E) export tax.

Question 7

A restriction of imports that is accomplished by a quota normally

Accepted Answer

A) can be accomplished also by a tariff. 
B) cannot be replicated exactly by imposing a tariff. 
C) can be accomplished also by an export subsidy. 
D) can be accomplished also by negotiations within GATT. 
A) can be accomplished also by a tariff. 
B) cannot be replicated exactly by imposing a tariff. 
C) can be accomplished also by an export subsidy. 
D) can be accomplished also by negotiations within GATT.

Question 8

What are the two approaches followed by the U.S. government to ease the burden on the victims of free trade?

Accepted Answer

The U.S. government follows two basic ap

Question 9

Figure 34-7 ​
 
In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. In this graph, Pestoland has a comparative advantage in

Accepted Answer

A) pasta because OA\OB 
B) pesto because OA\OB 
C) pasta because OA\OB > OC\OD. 
D) pesto because OA\OB > OC\OD. 
A) pasta because OA\OB 
B) pesto because OA\OB 
C) pasta because OA\OB > OC\OD. 
D) pesto because OA\OB > OC\OD.

Question 10

Figure 34-1 ​
 
In Figure 34-1,

Accepted Answer

A) Great Britain has an absolute advantage over Germany in the production of both scientific equipment and woolens. 
B) Germany has a comparative advantage over Great Britain in the production of woolens. 
C) Great Britain has a comparative advantage in the production of woolens. 
D) Great Britain should export scientific equipment to Germany, and Germany should export woolens to Great Britain. 
A) Great Britain has an absolute advantage over Germany in the production of both scientific equipment and woolens. 
B) Germany has a comparative advantage over Great Britain in the production of woolens. 
C) Great Britain has a comparative advantage in the production of woolens. 
D) Great Britain should export scientific equipment to Germany, and Germany should export woolens to Great Britain.

Question 11

When other nations Orient "dump" products on the U.S. market, they

Accepted Answer

A) sell at prices that do not cover costs of production. 
B) sell at prices lower than prices charged to their own domestic customers. 
C) expect the United States to help pay any industrialists' losses. 
D) All of the above are true. 
A) sell at prices that do not cover costs of production. 
B) sell at prices lower than prices charged to their own domestic customers. 
C) expect the United States to help pay any industrialists' losses. 
D) All of the above are true.

Question 12

If Argentina has a large amount of farmland and Great Britain has many factories,

Accepted Answer

A) the two nations have no reason to trade. 
B) Argentina will be willing to trade but Great Britain will not. 
C) Great Britain will be willing to trade but Argentina will not. 
D) the two nations will probably engage in mutually advantageous trade. 
A) the two nations have no reason to trade. 
B) Argentina will be willing to trade but Great Britain will not. 
C) Great Britain will be willing to trade but Argentina will not. 
D) the two nations will probably engage in mutually advantageous trade.

Question 13

Suppose the South had won the Civil War, and trade no longer took place between Northern and Southern states. Explain whether the sum of the North and South GDPs would have been higher or lower than with the current United States.

Accepted Answer

North and South added together would hav

Question 14

For many years the U.S. government imposed quotas on cheap, Middle Eastern oil imports. The U.S. consumer consequently paid $3 billion more per year for oil products. A likely rationale for such a policy is

Accepted Answer

A) people in the oil industry deserved the transfer. 
B) conservation. 
C) one cannot be dependent on foreign supplies of so crucial a resource. 
D) American oil was of higher quality and deserved a higher price. 
A) people in the oil industry deserved the transfer. 
B) conservation. 
C) one cannot be dependent on foreign supplies of so crucial a resource. 
D) American oil was of higher quality and deserved a higher price.

Question 15

A country's comparative advantage can be illustrated by the graph of the production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 16

__________ is a payment by the government to exporters to permit them to reduce the selling prices of their goods so they can compete more effectively in foreign markets.

Accepted Answer

A) Export subsidy 
B) Import subsidy 
C) Tariff 
D) All of these 
A) Export subsidy 
B) Import subsidy 
C) Tariff 
D) All of these

Question 17

Any restriction of international trade that is accomplished by a quota can also be accomplished by a tariff.

Accepted Answer

A) True 
 B)False

Question 18

Figure 34-7 ​
 
In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. Pestoland has a comparative advantage in pasta because it

Accepted Answer

A) gets more pasta from a given decline in pesto than Pastaland does. 
B) gets more pesto from a given decrease in pasta production. 
C) can produce more pasta than Pastaland. 
D) can produce more pasta and pesto than Pastaland. 
A) gets more pasta from a given decline in pesto than Pastaland does. 
B) gets more pesto from a given decrease in pasta production. 
C) can produce more pasta than Pastaland. 
D) can produce more pasta and pesto than Pastaland.

Question 19

Why does equilibrium in the market for a traded good not occur where that country's quantity demanded equals quantity supplied?

Accepted Answer

A) Because equilibrium occurs where demand equals supply. 
B) Because markets are never in equilibrium. 
C) Because some of the good is imported or exported. 
D) Because there are several demand curves, and the market can't choose between them. 
E) All of the above are correct. 
A) Because equilibrium occurs where demand equals supply. 
B) Because markets are never in equilibrium. 
C) Because some of the good is imported or exported. 
D) Because there are several demand curves, and the market can't choose between them. 
E) All of the above are correct.

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

Exam 21: International Trade and Comparative Advantage

Table 34-3 The data in Table 34-3 indicate that the United States has

Table 34-4 Table 34-4 presents the demand and supply schedules for television sets in Japan and the United States. If the United States and Japan trade with each other, what will happen to the output of television sets in the United States?

The estimated cost of automobile jobs saved due to limitations on foreign autos is $105,000 per job. Why is there a cost to saving jobs through protectionism?

Figure 34-9 ​ In Figure 34-9, hostilities break out between Pastaland and Pestoland after Pestoland violates the Treaty of Basil. Consequently, trade stops and the price of pasta

A complicating factor in international trade is that

Figure 34-10 ​ Figure 34-10 shows the effect on the market for disk drives of a(n)

A restriction of imports that is accomplished by a quota normally

What are the two approaches followed by the U.S. government to ease the burden on the victims of free trade?

Figure 34-7 ​ In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. In this graph, Pestoland has a comparative advantage in

Figure 34-1 ​ In Figure 34-1,

When other nations Orient "dump" products on the U.S. market, they

If Argentina has a large amount of farmland and Great Britain has many factories,

Suppose the South had won the Civil War, and trade no longer took place between Northern and Southern states. Explain whether the sum of the North and South GDPs would have been higher or lower than with the current United States.

For many years the U.S. government imposed quotas on cheap, Middle Eastern oil imports. The U.S. consumer consequently paid $3 billion more per year for oil products. A likely rationale for such a policy is

A country's comparative advantage can be illustrated by the graph of the production possibilities frontier.

__________ is a payment by the government to exporters to permit them to reduce the selling prices of their goods so they can compete more effectively in foreign markets.

Any restriction of international trade that is accomplished by a quota can also be accomplished by a tariff.

Figure 34-7 ​ In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. Pestoland has a comparative advantage in pasta because it

Why does equilibrium in the market for a traded good not occur where that country's quantity demanded equals quantity supplied?

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

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Contemporary Issues in the Us Economy

Filters

Figure 34-9 In Figure 34-9, hostilities break out between Pastaland and Pestoland after Pestoland violates the Treaty of Basil. Consequently, trade stops and the price of pasta

Figure 34-10 Figure 34-10 shows the effect on the market for disk drives of a(n)

Figure 34-7 In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. In this graph, Pestoland has a comparative advantage in

Figure 34-1 In Figure 34-1,

Figure 34-7 In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. Pestoland has a comparative advantage in pasta because it

In discussing trade, it is that matters rather than .