Question 1

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 2

Figure 18-9
  
-In Figure 18-9,Pestoland exports pasta to Pastaland.Equilibrium will occur when

Accepted Answer

A)  points E and B are reached simultaneously. 
B)  either E or B is reached. 
C)  exports equal imports. 
D)  exports are maximized. 
A)  points E and B are reached simultaneously. 
B)  either E or B is reached. 
C)  exports equal imports. 
D)  exports are maximized.

Question 3

Workers in high-wage countries cannot improve their real income when they trade with low-wage countries.

Accepted Answer

A) True 
 B)False

Question 4

Colombia produces coffee with less labor and land than any other country; it therefore surely has

Accepted Answer

A)  an absolute advantage in coffee production. 
B)  a comparative advantage in coffee production. 
C)  absolute efficiency in coffee production. 
D)  a comparatively absolute advantage in coffee production. 
A)  an absolute advantage in coffee production. 
B)  a comparative advantage in coffee production. 
C)  absolute efficiency in coffee production. 
D)  a comparatively absolute advantage in coffee production.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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,what will be the equilibrium price in the world market for television sets?

Accepted Answer

A)  $100 
B)  $200 
C)  $300 
D)  $400 
A)  $100 
B)  $200 
C)  $300 
D)  $400

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

An example of a quota that protects an American industry is the quota on

Accepted Answer

A)  tourists entering the country. 
B)  sugar imports. 
C)  sales of oil products to foreign countries. 
D)  purchases of military hardware to foreign dictators. 
E)  All of the above are examples of protective quotas. 
A)  tourists entering the country. 
B)  sugar imports. 
C)  sales of oil products to foreign countries. 
D)  purchases of military hardware to foreign dictators. 
E)  All of the above are examples of protective quotas.

Question 9

Figure 18-3
  
-In Figure 18-3,the solid lines represent the respective production possibilities curves for the United States and Mexico.Which graphs show the correct consumption possibilities curves (dashed lines)after an agreement is reached to trade 1 unit of wheat for 1 unit of petroleum?

Accepted Answer

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

Question 10

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 11

Figure 18-5
  
-From the graph in Figure 18-5 (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 12

The economic effects of a quota are identical to those of a tariff.

Accepted Answer

A) True 
 B)False

Question 13

Specialization is a major obstacle to international trade.

Accepted Answer

A) True 
 B)False

Question 14

One country has an absolute advantage over another country if it can produce a good using smaller quantities of resources.

Accepted Answer

A) True 
 B)False

Question 15

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 16

A tariff is a limitation on the amount of a good that can be imported.

Accepted Answer

A) True 
 B)False

Question 17

David Ricardo discovered that two countries can still gain by trading even if one country is more efficient in the production of every commodity.Ricardo's discovery is called the law of

Accepted Answer

A)  comparative advantage. 
B)  absolute advantage. 
C)  compensating balances. 
D)  increasing returns. 
A)  comparative advantage. 
B)  absolute advantage. 
C)  compensating balances. 
D)  increasing returns.

Question 18

A tariff is a tax on imports imposed by the country that is importing the goods.

Accepted Answer

A) True 
 B)False

Question 19

The essential logic behind international trade is not different from that underlying trade among different states.Why,then,do we study international trade as a special subject?

Accepted Answer

There are at least three reasons.
1.Dome

Question 20

Table 18-4
  
-Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If there is no trade between these countries,what are the equilibrium price and quantity in the United States?

Accepted Answer

A)  P = $100, Q = 100 
B)  P = $200, Q = 85 
C)  P = $300, Q = 70 
D)  P = $500, Q = 50 
A)  P = $100, Q = 100 
B)  P = $200, Q = 85 
C)  P = $300, Q = 70 
D)  P = $500, Q = 50

Tariffs and quotas are effective in protecting industry

Figure 18-9 -In Figure 18-9,Pestoland exports pasta to Pastaland.Equilibrium will occur when

Workers in high-wage countries cannot improve their real income when they trade with low-wage countries.

Colombia produces coffee with less labor and land than any other country; it therefore surely has

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

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,what will be the equilibrium price in the world market for television sets?

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

An example of a quota that protects an American industry is the quota on

Figure 18-3 -In Figure 18-3,the solid lines represent the respective production possibilities curves for the United States and Mexico.Which graphs show the correct consumption possibilities curves (dashed lines)after an agreement is reached to trade 1 unit of wheat for 1 unit of petroleum?

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

Figure 18-5 -From the graph in Figure 18-5 (curves show output per unit of labor input),one can infer that

The economic effects of a quota are identical to those of a tariff.

Specialization is a major obstacle to international trade.

One country has an absolute advantage over another country if it can produce a good using smaller quantities of resources.

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.

A tariff is a limitation on the amount of a good that can be imported.

David Ricardo discovered that two countries can still gain by trading even if one country is more efficient in the production of every commodity.Ricardo's discovery is called the law of

A tariff is a tax on imports imposed by the country that is importing the goods.

The essential logic behind international trade is not different from that underlying trade among different states.Why,then,do we study international trade as a special subject?

Table 18-4 -Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If there is no trade between these countries,what are the equilibrium price and quantity in the United States?

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

Exam 18: International Trade and Comparative Advantage

Tariffs and quotas are effective in protecting industry

Figure 18-9 -In Figure 18-9,Pestoland exports pasta to Pastaland.Equilibrium will occur when

Workers in high-wage countries cannot improve their real income when they trade with low-wage countries.

Colombia produces coffee with less labor and land than any other country; it therefore surely has

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

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,what will be the equilibrium price in the world market for television sets?

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

An example of a quota that protects an American industry is the quota on

Figure 18-3 -In Figure 18-3,the solid lines represent the respective production possibilities curves for the United States and Mexico.Which graphs show the correct consumption possibilities curves (dashed lines)after an agreement is reached to trade 1 unit of wheat for 1 unit of petroleum?

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

Figure 18-5 -From the graph in Figure 18-5 (curves show output per unit of labor input),one can infer that

The economic effects of a quota are identical to those of a tariff.

Specialization is a major obstacle to international trade.

One country has an absolute advantage over another country if it can produce a good using smaller quantities of resources.

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.

A tariff is a limitation on the amount of a good that can be imported.

David Ricardo discovered that two countries can still gain by trading even if one country is more efficient in the production of every commodity.Ricardo's discovery is called the law of

A tariff is a tax on imports imposed by the country that is importing the goods.

The essential logic behind international trade is not different from that underlying trade among different states.Why,then,do we study international trade as a special subject?

Table 18-4 -Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If there is no trade between these countries,what are the equilibrium price and quantity in the United States?

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