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

Some nations that seek to produce all of their own needs face the problem that

Accepted Answer

A)  people don't want a wide variety of choices when buying. 
B)  some industries are too small to be efficient. 
C)  other countries may want to buy from them. 
D)  All of the above are t. 
A)  people don't want a wide variety of choices when buying. 
B)  some industries are too small to be efficient. 
C)  other countries may want to buy from them. 
D)  All of the above are t.

Question 3

If every country uses tariffs,everyone is likely to lose.

Accepted Answer

A) True 
 B)False

Question 4

Table 18-4
  
-Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other,which country will export television sets and how many?

Accepted Answer

A)  Japan will export 20,000 television sets to the United States. 
B)  Japan will export 30,000 television sets to the United States. 
C)  The United States will export 20,000 television sets to Japan. 
D)  The United States will export 40,000 television sets to Japan. 
A)  Japan will export 20,000 television sets to the United States. 
B)  Japan will export 30,000 television sets to the United States. 
C)  The United States will export 20,000 television sets to Japan. 
D)  The United States will export 40,000 television sets to Japan.

Question 5

Figure 18-9
  
-In Figure 18-9,at price OC total quantity demanded exceeds quantity supplied and price will rise to

Accepted Answer

A)  OJ in Pastaland. 
B)  OA in Pestoland. 
C)  OA in both countries. 
D)  OJ in both countries. 
A)  OJ in Pastaland. 
B)  OA in Pestoland. 
C)  OA in both countries. 
D)  OJ in both countries.

Question 6

Figure 18-9
  
-In Figure 18-9,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 7

Which of the following might lead a nation to engage in international trade?

Accepted Answer

A)  Differences in natural endowments such as climate 
B)  Differences in skills of labor force 
C)  Differences in endowments of natural resources 
D)  All of the above are correct. 
A)  Differences in natural endowments such as climate 
B)  Differences in skills of labor force 
C)  Differences in endowments of natural resources 
D)  All of the above are correct.

Question 8

The Trade Adjustment Assistance program is intended to help

Accepted Answer

A)  businesses that seek to expand exports into protected foreign markets. 
B)  local governments that are harmed when businesses fail as imports increase. 
C)  protected industries obtain improved technology in order to increase productivity. 
D)  workers and businesses that lose markets because of increases in imports. 
A)  businesses that seek to expand exports into protected foreign markets. 
B)  local governments that are harmed when businesses fail as imports increase. 
C)  protected industries obtain improved technology in order to increase productivity. 
D)  workers and businesses that lose markets because of increases in imports.

Question 9

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 10

If the supply curve of a commodity is upward sloping,and the producing country begins to export more in a pure free trade system,the domestic price of the commodity will

Accepted Answer

A)  fall. 
B)  rise. 
C)  exceed the price in foreign countries. 
D)  be below the price in foreign countries. 
A)  fall. 
B)  rise. 
C)  exceed the price in foreign countries. 
D)  be below the price in foreign countries.

Question 11

A common fallacy that is used to oppose trade is the idea that

Accepted Answer

A)  the only gains from trade go to the rich, so the poor must lose. 
B)  "you get what you pay for." 
C)  "if it's not broken, don't fix it." 
D)  one country's gain must be another's loss. 
E)  what is t for one is t for all. 
A)  the only gains from trade go to the rich, so the poor must lose. 
B)  "you get what you pay for." 
C)  "if it's not broken, don't fix it." 
D)  one country's gain must be another's loss. 
E)  what is t for one is t for all.

Question 12

Comparing international trade with trade among the different states of the United States shows that

Accepted Answer

A)  the logic of international trade is quite different from that of intranational trade. 
B)  the basic reasons for trade are equally applicable within a country or among countries. 
C)  there is no need to study international trade as a special subject. 
D)  All of the above are correct. 
A)  the logic of international trade is quite different from that of intranational trade. 
B)  the basic reasons for trade are equally applicable within a country or among countries. 
C)  there is no need to study international trade as a special subject. 
D)  All of the above are correct.

Question 13

An export subsidy is a payment by the government to exporters to permit them to charge lower prices.

Accepted Answer

A) True 
 B)False

Question 14

One of the major reasons why nations trade is that

Accepted Answer

A)  nations choose to trade for largely unknown reasons. 
B)  resources are not equally distributed across the planet. 
C)  nations wish to exert cultural influence abroad. 
D)  nations wish to copy others, and need imports to study. 
A)  nations choose to trade for largely unknown reasons. 
B)  resources are not equally distributed across the planet. 
C)  nations wish to exert cultural influence abroad. 
D)  nations wish to copy others, and need imports to study.

Question 15

"Protection" is designed to help

Accepted Answer

A)  firms whose relative inefficiency does not permit successful competition with imports. 
B)  workers who have very high productivity, and cannot survive against low-paid foreign workers. 
C)  government that needs revenue from tariffs and quotas to cover government spending. 
D)  firms that are highly efficient, and cannot survive against low-price foreign imports. 
A)  firms whose relative inefficiency does not permit successful competition with imports. 
B)  workers who have very high productivity, and cannot survive against low-paid foreign workers. 
C)  government that needs revenue from tariffs and quotas to cover government spending. 
D)  firms that are highly efficient, and cannot survive against low-price foreign imports.

Question 16

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 17

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 18

Is the call for protection on the basis of "infant industry" valid?

Accepted Answer

A)  No, because protection has no place in industrial development. 
B)  No, protection is always improper. 
C)  Uncertain, economic theory has no answer to this question. 
D)  Yes, although it can be overstated and abused. 
A)  No, because protection has no place in industrial development. 
B)  No, protection is always improper. 
C)  Uncertain, economic theory has no answer to this question. 
D)  Yes, although it can be overstated and abused.

Question 19

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 20

The United States has relatively low tariffs.

Accepted Answer

A) True 
 B)False

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

Some nations that seek to produce all of their own needs face the problem that

If every country uses tariffs,everyone is likely to lose.

Table 18-4 -Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other,which country will export television sets and how many?

Figure 18-9 -In Figure 18-9,at price OC total quantity demanded exceeds quantity supplied and price will rise to

Figure 18-9 -In Figure 18-9,hostilities break out between Pastaland and Pestoland after Pestoland violates the Treaty of Basil.Consequently,trade stops and the price of pasta

Which of the following might lead a nation to engage in international trade?

The Trade Adjustment Assistance program is intended to help

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

If the supply curve of a commodity is upward sloping,and the producing country begins to export more in a pure free trade system,the domestic price of the commodity will

A common fallacy that is used to oppose trade is the idea that

Comparing international trade with trade among the different states of the United States shows that

An export subsidy is a payment by the government to exporters to permit them to charge lower prices.

One of the major reasons why nations trade is that

"Protection" is designed to help

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

A restriction of imports that is accomplished by a quota normally

Is the call for protection on the basis of "infant industry" valid?

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

The United States has relatively low tariffs.

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

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Exam 18: 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.

Some nations that seek to produce all of their own needs face the problem that

If every country uses tariffs,everyone is likely to lose.

Table 18-4 -Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other,which country will export television sets and how many?

Figure 18-9 -In Figure 18-9,at price OC total quantity demanded exceeds quantity supplied and price will rise to

Figure 18-9 -In Figure 18-9,hostilities break out between Pastaland and Pestoland after Pestoland violates the Treaty of Basil.Consequently,trade stops and the price of pasta

Which of the following might lead a nation to engage in international trade?

The Trade Adjustment Assistance program is intended to help

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

If the supply curve of a commodity is upward sloping,and the producing country begins to export more in a pure free trade system,the domestic price of the commodity will

A common fallacy that is used to oppose trade is the idea that

Comparing international trade with trade among the different states of the United States shows that

An export subsidy is a payment by the government to exporters to permit them to charge lower prices.

One of the major reasons why nations trade is that

"Protection" is designed to help

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

A restriction of imports that is accomplished by a quota normally

Is the call for protection on the basis of "infant industry" valid?

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

The United States has relatively low tariffs.

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

Filters