Question 1

____ is a doctrine that holds that exports are good for a country,whereas imports are harmful.

Accepted Answer

A)  Supply-side economics 
B)  Mercantilism 
C)  Free trade 
D)  Monetarism 
A)  Supply-side economics 
B)  Mercantilism 
C)  Free trade 
D)  Monetarism

Question 2

What is an export subsidy? Discuss some of the recent examples where such subsidies were controversial.

Accepted Answer

An export subsidy is a government paymen

Question 3

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 4

The logic of why international trade increases well-being is

Accepted Answer

A)  a major revision of the logic of why trade within a country increases well-being. 
B)  completely different from the logic of why trade within a country increases well-being. 
C)  a narrow, special case of the logic of why trade within a country increases well-being. 
D)  no different from the logic of why trade within a country increases well-being. 
A)  a major revision of the logic of why trade within a country increases well-being. 
B)  completely different from the logic of why trade within a country increases well-being. 
C)  a narrow, special case of the logic of why trade within a country increases well-being. 
D)  no different from the logic of why trade within a country increases well-being.

Question 5

Table 18-4
  
-Table 18-4 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 6

Are there impediments to international movement of labor and capital?

Accepted Answer

A)  Yes, but they apply to labor only, capital mobility is almost completely free. 
B)  Yes, although these apply to capital, and not to labor. 
C)  Yes, there are significant (often prohibitive) restrictions on labor and capital mobility. 
D)  No, these have been removed with the passage of recent trade legislation. 
A)  Yes, but they apply to labor only, capital mobility is almost completely free. 
B)  Yes, although these apply to capital, and not to labor. 
C)  Yes, there are significant (often prohibitive) restrictions on labor and capital mobility. 
D)  No, these have been removed with the passage of recent trade legislation.

Question 7

Unequal distribution of resources is one of the main reasons for international trade.

Accepted Answer

A) True 
 B)False

Question 8

Why is comparative advantage rather than absolute advantage the basis for trade?

Accepted Answer

The concept of comparative advantage emp

Question 9

Cheap labor is the source of comparative advantages.

Accepted Answer

A) True 
 B)False

Question 10

William Safire argues that a unilateral free trade policy is a disaster if

Accepted Answer

A)  the governments of the nations' trading partners practice "helpfulism." 
B)  infant industries are allowed to expire. 
C)  the national defense is endangered. 
D)  it hurts the poor. 
A)  the governments of the nations' trading partners practice "helpfulism." 
B)  infant industries are allowed to expire. 
C)  the national defense is endangered. 
D)  it hurts the poor.

Question 11

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 12

Trade between nations usually means that

Accepted Answer

A)  one country is richer than another. 
B)  one country becomes richer while the other becomes poorer. 
C)  both trading nations show some gains. 
D)  one trading country is trying to "beggar its neighbor." 
A)  one country is richer than another. 
B)  one country becomes richer while the other becomes poorer. 
C)  both trading nations show some gains. 
D)  one trading country is trying to "beggar its neighbor."

Question 13

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 18-13
 @#IMG-DLM& 
See Figure 18-13.The quo

Question 14

The trade philosophy of the Clinton administration is best characterized as

Accepted Answer

A)  protectionist. 
B)  mercantilist. 
C)  free trade. 
D)  strategic trade. 
A)  protectionist. 
B)  mercantilist. 
C)  free trade. 
D)  strategic trade.

Question 15

Comparative advantage is illustrated by the slopes of production possibilities frontiers.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following observations is t of the principle of comparative advantage?

Accepted Answer

A)  It arises from the absolute cost advantage. 
B)  It helps determine most efficient patterns of production. 
C)  It was advanced by Adam Smith. 
D)  It means producing a good using smaller quantities of resources than others. 
A)  It arises from the absolute cost advantage. 
B)  It helps determine most efficient patterns of production. 
C)  It was advanced by Adam Smith. 
D)  It means producing a good using smaller quantities of resources than others.

Question 17

Dumping is a trade practice in which countries sell goods in a foreign market at cheaper prices than the goods can be produced domestically.

Accepted Answer

A) True 
 B)False

Question 18

When can a country gain a price advantage on imports by imposing a tariff?

Accepted Answer

A)  when it is the largest country with absolute advantage in all goods 
B)  when it has a comparative advantage in the production of all goods 
C)  when it can do so without other countries retaliating with tariffs 
D)  when trade agreements prohibit quotas but permit tariffs 
A)  when it is the largest country with absolute advantage in all goods 
B)  when it has a comparative advantage in the production of all goods 
C)  when it can do so without other countries retaliating with tariffs 
D)  when trade agreements prohibit quotas but permit tariffs

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

Suppose that a tariff 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 tariff is paid by the buyers of the minivans?

Accepted Answer

Answe: Figure 18-12
 @#IMG-DLM& 
See Figure 18-12.

____ is a doctrine that holds that exports are good for a country,whereas imports are harmful.

What is an export subsidy? Discuss some of the recent examples where such subsidies were controversial.

A complicating factor in international trade is that

The logic of why international trade increases well-being is

Table 18-4 -Table 18-4 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?

Are there impediments to international movement of labor and capital?

Unequal distribution of resources is one of the main reasons for international trade.

Why is comparative advantage rather than absolute advantage the basis for trade?

Cheap labor is the source of comparative advantages.

William Safire argues that a unilateral free trade policy is a disaster if

The effect of a tariff or a quota is to

Trade between nations usually means 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?

The trade philosophy of the Clinton administration is best characterized as

Comparative advantage is illustrated by the slopes of production possibilities frontiers.

Which of the following observations is t of the principle of comparative advantage?

Dumping is a trade practice in which countries sell goods in a foreign market at cheaper prices than the goods can be produced domestically.

When can a country gain a price advantage on imports by imposing a tariff?

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

Suppose that a tariff 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 tariff is paid by the buyers of the minivans?

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

____ is a doctrine that holds that exports are good for a country,whereas imports are harmful.

What is an export subsidy? Discuss some of the recent examples where such subsidies were controversial.

A complicating factor in international trade is that

The logic of why international trade increases well-being is

Table 18-4 -Table 18-4 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?

Are there impediments to international movement of labor and capital?

Unequal distribution of resources is one of the main reasons for international trade.

Why is comparative advantage rather than absolute advantage the basis for trade?

Cheap labor is the source of comparative advantages.

William Safire argues that a unilateral free trade policy is a disaster if

The effect of a tariff or a quota is to

Trade between nations usually means 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?

The trade philosophy of the Clinton administration is best characterized as

Comparative advantage is illustrated by the slopes of production possibilities frontiers.

Which of the following observations is t of the principle of comparative advantage?

Dumping is a trade practice in which countries sell goods in a foreign market at cheaper prices than the goods can be produced domestically.

When can a country gain a price advantage on imports by imposing a tariff?

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

Suppose that a tariff 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 tariff is paid by the buyers of the minivans?

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