Question 1

The advantage of trade,both for individuals and countries

Accepted Answer

A)  always nets out to zero. 
B)  disappears when one has an absolute advantage over the other. 
C)  is that trade permits specialization and specialization increases output. 
D)  is increased when tariffs are imposed. 
E)  can benefit only one party in the transaction. 
A)  always nets out to zero. 
B)  disappears when one has an absolute advantage over the other. 
C)  is that trade permits specialization and specialization increases output. 
D)  is increased when tariffs are imposed. 
E)  can benefit only one party in the transaction.

Question 2

The terms of trade is the

Accepted Answer

A)  amount of goods a country can consume without diminishing its supply of gold. 
B)  quantity of imported goods a country can obtain in exchange for a unit of domestic goods exported. 
C)  ratio of the increase in the domestic rate of unemployment for every 1 percent increase in imports. 
D)  change in the value of one currency relative to another. 
E)  ratio of net exports to the GDP. 
A)  amount of goods a country can consume without diminishing its supply of gold. 
B)  quantity of imported goods a country can obtain in exchange for a unit of domestic goods exported. 
C)  ratio of the increase in the domestic rate of unemployment for every 1 percent increase in imports. 
D)  change in the value of one currency relative to another. 
E)  ratio of net exports to the GDP.

Question 3

Under free trade,a country's producers can tell whether they have a comparative advantage in the production of a certain commodity by

Accepted Answer

A)  estimating its production possibilities curve. 
B)  seeing whether it is profitable to export that product. 
C)  seeing whether the price of that commodity is in equilibrium. 
D)  examining relative production costs. 
E)  examining absolute production costs. 
A)  estimating its production possibilities curve. 
B)  seeing whether it is profitable to export that product. 
C)  seeing whether the price of that commodity is in equilibrium. 
D)  examining relative production costs. 
E)  examining absolute production costs.

Question 4

The following question are based on the following graphs for men's shirts in South Korea and the United States. The exchange rate is 1,200 won equals $1.00.
  
-If the United States imposes a tariff on imported men's shirts,the price of a man's shirt in the United States probably is

Accepted Answer

A)  below $30. 
B)  $30. 
C)  between $30 and $40. 
D)  $40. 
E)  over $40. 
A)  below $30. 
B)  $30. 
C)  between $30 and $40. 
D)  $40. 
E)  over $40.

Question 5

If a country maintains its level of exports to another country under free trade,even after its world price is equalized and there are no international shortages or surpluses,it must have a

Accepted Answer

A)  comparative advantage in that good. 
B)  comparative disadvantage in that good. 
C)  lower domestic price for the good than would be the case if trade were not permitted. 
D)  higher rate of domestic consumption of the good than would be the case if trade were not permitted. 
E)  persistent domestic shortage of the good that necessitates a tariff on it. 
A)  comparative advantage in that good. 
B)  comparative disadvantage in that good. 
C)  lower domestic price for the good than would be the case if trade were not permitted. 
D)  higher rate of domestic consumption of the good than would be the case if trade were not permitted. 
E)  persistent domestic shortage of the good that necessitates a tariff on it.

Question 6

The goal of an export subsidy is to

Accepted Answer

A)  increase exports. 
B)  reduce domestic employment in the subsidized industry. 
C)  shift the demand curve for the exported good to the left. 
D)  raise the domestic price of goods produced abroad. 
E)  make it impossible for an importing country to keep out foreign goods. 
A)  increase exports. 
B)  reduce domestic employment in the subsidized industry. 
C)  shift the demand curve for the exported good to the left. 
D)  raise the domestic price of goods produced abroad. 
E)  make it impossible for an importing country to keep out foreign goods.

Question 7

A secondary reason for a government to impose a tariff is to

Accepted Answer

A)  limit its exports. 
B)  reduce domestic prices. 
C)  promote free trade. 
D)  eliminate shortages. 
E)  raise revenue. 
A)  limit its exports. 
B)  reduce domestic prices. 
C)  promote free trade. 
D)  eliminate shortages. 
E)  raise revenue.

Question 8

The quantity of domestic goods that a country must give up to get a unit of imported goods is called

Accepted Answer

A)  absolute advantage. 
B)  comparative advantage. 
C)  export subsidies. 
D)  terms of trade. 
E)  a quota. 
A)  absolute advantage. 
B)  comparative advantage. 
C)  export subsidies. 
D)  terms of trade. 
E)  a quota.

Question 9

A quota is

Accepted Answer

A)  a tariff on exports. 
B)  a quantitative limit on the amount of a good that may be imported. 
C)  the same as a nonprohibitive tariff. 
D)  the amount of exports a country needs to finance its imports. 
E)  a per unit cash rebate to an exporter. 
A)  a tariff on exports. 
B)  a quantitative limit on the amount of a good that may be imported. 
C)  the same as a nonprohibitive tariff. 
D)  the amount of exports a country needs to finance its imports. 
E)  a per unit cash rebate to an exporter.

Question 10

When free trade prevails,the

Accepted Answer

A)  domestic prices of imported items rise and of exported items decline. 
B)  domestic prices of both imported and exported items rise. 
C)  domestic prices of exported items rise in the exporting country and decline in the importing country. 
D)  domestic prices of imported and exported items remain the same. 
E)  laws of supply and demand are replaced by the law of comparative advantage. 
A)  domestic prices of imported items rise and of exported items decline. 
B)  domestic prices of both imported and exported items rise. 
C)  domestic prices of exported items rise in the exporting country and decline in the importing country. 
D)  domestic prices of imported and exported items remain the same. 
E)  laws of supply and demand are replaced by the law of comparative advantage.

The advantage of trade,both for individuals and countries

The terms of trade is the

Under free trade,a country's producers can tell whether they have a comparative advantage in the production of a certain commodity by

The following question are based on the following graphs for men's shirts in South Korea and the United States. The exchange rate is 1,200 won equals $1.00. -If the United States imposes a tariff on imported men's shirts,the price of a man's shirt in the United States probably is

If a country maintains its level of exports to another country under free trade,even after its world price is equalized and there are no international shortages or surpluses,it must have a

The goal of an export subsidy is to

A secondary reason for a government to impose a tariff is to

The quantity of domestic goods that a country must give up to get a unit of imported goods is called

A quota is

When free trade prevails,the

What is Economics

Markets and Prices

The Business Firm: Organization,motivation,and Optimal Input Decisions

Getting Behind the Demand and Supply Curves

Market Demand and Price Elasticity

Economic Efficiency,market Supply,and Perfect Competition

Monopoly and Its Regulation

Monopolistic Competition,oligopoly,and Antitrust Policy

Pollution and the Environment

The Supply and Demand for Labor

Interest,rent,and Profit

Poverty,income Inequality,and Discrimination

Economic Growth

Public Goods and the Role of the Government

National Income and Product

Business Fluctuations and Unemployment

The Determination of National Output and the Keynesian Multiplier

Fiscal Policy and National Output

Inflation

Money and the Banking System

The Federal Reserve and Monetary Policy

Supply Shocks and Inflation

Productivity,growth,and Technology Policy

Surpluses,deficits,public Debt,and the Federal Budget

Monetary Policy,interest Rates,and Economic Activity

Controversies Over Stabilization Policy

Exchange Rates and the Balance of Payments

Filters

Exam 27: International Trade

The advantage of trade,both for individuals and countries

The terms of trade is the

Under free trade,a country's producers can tell whether they have a comparative advantage in the production of a certain commodity by

The following question are based on the following graphs for men's shirts in South Korea and the United States. The exchange rate is 1,200 won equals $1.00. -If the United States imposes a tariff on imported men's shirts,the price of a man's shirt in the United States probably is

If a country maintains its level of exports to another country under free trade,even after its world price is equalized and there are no international shortages or surpluses,it must have a

The goal of an export subsidy is to

A secondary reason for a government to impose a tariff is to

The quantity of domestic goods that a country must give up to get a unit of imported goods is called

A quota is

When free trade prevails,the

What is Economics

Markets and Prices

The Business Firm: Organization,motivation,and Optimal Input Decisions

Getting Behind the Demand and Supply Curves

Market Demand and Price Elasticity

Economic Efficiency,market Supply,and Perfect Competition

Monopoly and Its Regulation

Monopolistic Competition,oligopoly,and Antitrust Policy

Pollution and the Environment

The Supply and Demand for Labor

Interest,rent,and Profit

Poverty,income Inequality,and Discrimination

Economic Growth

Public Goods and the Role of the Government

National Income and Product

Business Fluctuations and Unemployment

The Determination of National Output and the Keynesian Multiplier

Fiscal Policy and National Output

Inflation

Money and the Banking System

The Federal Reserve and Monetary Policy

Supply Shocks and Inflation

Productivity,growth,and Technology Policy

Surpluses,deficits,public Debt,and the Federal Budget

Monetary Policy,interest Rates,and Economic Activity

Controversies Over Stabilization Policy

Exchange Rates and the Balance of Payments

Filters