Question 1

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 2

According to the ____ view, a nation's wealth consists of the amount of gold or other monies at its command.

Accepted Answer

A) Keynesian 
B) free trade 
C) mercantilist 
D) monetarist 
A) Keynesian 
B) free trade 
C) mercantilist 
D) monetarist

Question 3

A country has an absolute advantage over another in the production of widgets if it can produce

Accepted Answer

A) widgets using smaller quantities of resources than can the other country. 
B) more widgets than can the other country. 
C) widgets more efficiently than can the other country. 
D) widgets at a lower opportunity cost than can the other country. 
A) widgets using smaller quantities of resources than can the other country. 
B) more widgets than can the other country. 
C) widgets more efficiently than can the other country. 
D) widgets at a lower opportunity cost than can the other country.

Question 4

Tariffs and quotas are effective in protecting industry

Accepted Answer

A) but at very high cost per job saved. 
B) and at very low cost per job saved. 
C) but have not saved any jobs in the industries. 
D) and do not distort the economy in the process. 
A) but at very high cost per job saved. 
B) and at very low cost per job saved. 
C) but have not saved any jobs in the industries. 
D) and do not distort the economy in the process.

Question 5

A tariff on imports affects foreign suppliers ____; a quota affects foreign suppliers ____.

Accepted Answer

A) effectively; ineffectively 
B) haphazardly; carefully 
C) equally; capriciously 
D) unfairly; fairly 
E) unequally; unequally 
A) effectively; ineffectively 
B) haphazardly; carefully 
C) equally; capriciously 
D) unfairly; fairly 
E) unequally; unequally

Question 6

Trade adjustment assistance in the United States began in 1962. The program

Accepted Answer

A) was designed to provide assistance to firms or workers who suffer idle facilities, unprofitability, and unemployment because of sharp increases in imports. 
B) provided little assistance to victims of free trade before the 1970s. 
C) was enlarged and worker benefits were extended in 1981 by the Reagan administration. 
D) All of the above are correct. 
A) was designed to provide assistance to firms or workers who suffer idle facilities, unprofitability, and unemployment because of sharp increases in imports. 
B) provided little assistance to victims of free trade before the 1970s. 
C) was enlarged and worker benefits were extended in 1981 by the Reagan administration. 
D) All of the above are correct.

Question 7

The effect of opening trade between countries is

Accepted Answer

A) living standards rise in the country with efficient, high-pay workers. 
B) both countries can exploit comparative advantage and increase productivity. 
C) total world production increases as both countries specialize in specific goods. 
D) All of the above are correct. 
A) living standards rise in the country with efficient, high-pay workers. 
B) both countries can exploit comparative advantage and increase productivity. 
C) total world production increases as both countries specialize in specific goods. 
D) All of the above are correct.

Question 8

The United States can produce 1,000 shoes if it specializes in shoe production. Alternatively, it can produce 500 shirts. Taiwan can produce 500 shoes or 200 shirts. Explain which country will specialize in shoe production and which in shirt production. What are the possible terms of trade?

Accepted Answer

The United States has the lower opportun

Question 9

Nothing raises the standard of living more than a greater

Accepted Answer

A) abundance of goods. 
B) effort of production. 
C) population. 
D) number of import tariffs. 
E) All of the above are true. 
A) abundance of goods. 
B) effort of production. 
C) population. 
D) number of import tariffs. 
E) All of the above are true.

Question 10

Figure 34-2 ​
 
In Figure 34-2,

Accepted Answer

A) the opportunity cost of 1 unit of wheat in the United States is a 2\3 unit of petroleum. 
B) the opportunity cost of 1 unit of wheat in Mexico is a 2\3 unit of petroleum. 
C) the opportunity cost of wheat is higher in the United States than it is in Mexico. 
D) the United States has a comparative advantage over Mexico in the production of petroleum. 
A) the opportunity cost of 1 unit of wheat in the United States is a 2\3 unit of petroleum. 
B) the opportunity cost of 1 unit of wheat in Mexico is a 2\3 unit of petroleum. 
C) the opportunity cost of wheat is higher in the United States than it is in Mexico. 
D) the United States has a comparative advantage over Mexico in the production of petroleum.

Question 11

A quota specifies the maximum amount of a good that is permitted into the country from abroad per unit of time.

Accepted Answer

A) True 
 B)False

Question 12

What matters most in determining efficient distribution of production over the world is

Accepted Answer

A) absolute advantage. 
B) efficiency. 
C) the stock of resources. 
D) comparative advantage. 
A) absolute advantage. 
B) efficiency. 
C) the stock of resources. 
D) comparative advantage.

Question 13

If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to

Accepted Answer

A) raise the price and reduce the quantity of imports. 
B) raise the price and the quantity of imports. 
C) lower the price and the quantity of imports. 
D) raise the quantity and reduce the price of imports. 
A) raise the price and reduce the quantity of imports. 
B) raise the price and the quantity of imports. 
C) lower the price and the quantity of imports. 
D) raise the quantity and reduce the price of imports.

Question 14

The supply-demand mechanism will bring an international market into equilibrium

Accepted Answer

A) at a price below the domestic price. 
B) where domestic supplies are less than domestic demand. 
C) with one nation's price higher than the other nation's price. 
D) when the quantity demanded for exports is equal to quantity supplied. 
A) at a price below the domestic price. 
B) where domestic supplies are less than domestic demand. 
C) with one nation's price higher than the other nation's price. 
D) when the quantity demanded for exports is equal to quantity supplied.

Question 15

Among the impediments to the international mobility of capital are

Accepted Answer

A) restrictions on foreign ownership. 
B) fear of nationalization or political instability. 
C) fluctuations in exchange rates. 
D) All of the above are correct. 
A) restrictions on foreign ownership. 
B) fear of nationalization or political instability. 
C) fluctuations in exchange rates. 
D) All of the above are correct.

Question 16

The effect of a tariff or a quota is to

Accepted Answer

A) raise the price of a commodity in the exporting country above the price in an importing country. 
B) raise the price of a commodity in an importing country above the price in the exporting country. 
C) lower the price of the commodity in all countries. 
D) raise the price of the commodity in all countries. 
A) raise the price of a commodity in the exporting country above the price in an importing country. 
B) raise the price of a commodity in an importing country above the price in the exporting country. 
C) lower the price of the commodity in all countries. 
D) raise the price of the commodity in all countries.

Question 17

Figure 34-8 ​
 
Figure 34-8 has four sets of production possibility curves for two hypothetical countries. In which case will there be no advantage to trade between the two countries?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 18

The following table shows the units of output a worker can produce per month in country A and country B.   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 19

The U.S. Constitution prevents tariffs on trade between the individual states.

Accepted Answer

A) True 
 B)False

Question 20

Tariffs are more desirable than quotas if a government wants to increase revenues and reduce benefits to inefficient exporters.

Accepted Answer

A) True 
 B)False

Exam 21: International Trade and Comparative Advantage

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

According to the ____ view, a nation's wealth consists of the amount of gold or other monies at its command.

A country has an absolute advantage over another in the production of widgets if it can produce

Tariffs and quotas are effective in protecting industry

A tariff on imports affects foreign suppliers ____; a quota affects foreign suppliers ____.

Trade adjustment assistance in the United States began in 1962. The program

The effect of opening trade between countries is

The United States can produce 1,000 shoes if it specializes in shoe production. Alternatively, it can produce 500 shirts. Taiwan can produce 500 shoes or 200 shirts. Explain which country will specialize in shoe production and which in shirt production. What are the possible terms of trade?

Nothing raises the standard of living more than a greater

Figure 34-2 ​ In Figure 34-2,

A quota specifies the maximum amount of a good that is permitted into the country from abroad per unit of time.

What matters most in determining efficient distribution of production over the world is

If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to

The supply-demand mechanism will bring an international market into equilibrium

Among the impediments to the international mobility of capital are

The effect of a tariff or a quota is to

Figure 34-8 ​ Figure 34-8 has four sets of production possibility curves for two hypothetical countries. In which case will there be no advantage to trade between the two countries?

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

The U.S. Constitution prevents tariffs on trade between the individual states.

Tariffs are more desirable than quotas if a government wants to increase revenues and reduce benefits to inefficient exporters.

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

A tariff on imports affects foreign suppliers ; a quota affects foreign suppliers .

Figure 34-2 In Figure 34-2,

Figure 34-8 Figure 34-8 has four sets of production possibility curves for two hypothetical countries. In which case will there be no advantage to trade between the two countries?