Question 1

Which of the following is not an argument in favor of restricting trade?

Accepted Answer

A)  It preserves national security. 
B)  It prevents dumping. 
C)  It increases consumer surplus. 
D)  It protects infant industries. 
E)  It protects declining industries. 
A)  It preserves national security. 
B)  It prevents dumping. 
C)  It increases consumer surplus. 
D)  It protects infant industries. 
E)  It protects declining industries.

Question 2

An import quota is a tax on imports.

Accepted Answer

A) True 
 B)False

Question 3

Exhibit 17.3
  
-Refer to Exhibit 17.3, which shows the supply of and demand for baseballs in the United States. If the world price is $3 per baseball and a tariff of $1 per baseball is imposed, then the number of baseballs purchased in the United States is _____

Accepted Answer

A)  4,000 
B)  6,000 
C)  8,000 
D)  10,000 
E)  12,000 
A)  4,000 
B)  6,000 
C)  8,000 
D)  10,000 
E)  12,000

Question 4

Suppose workers in Transylvania can produce only two goods-yo-yos or sweat socks. If the Transylvanian currency is the daler, then the opportunity cost of producing yo-yos is measured in terms of _____

Accepted Answer

A)  dalers. 
B)  dalers per yo-yo. 
C)  dalers per sweat sock. 
D)  yo-yos. 
E)  sweat socks. 
A)  dalers. 
B)  dalers per yo-yo. 
C)  dalers per sweat sock. 
D)  yo-yos. 
E)  sweat socks.

Question 5

The basis of the benefits of specialization is _____

Accepted Answer

A)  comparative advantage. 
B)  absolute advantage. 
C)  the size of the country. 
D)  identical production costs between two countries. 
E)  the stock of natural resources. 
A)  comparative advantage. 
B)  absolute advantage. 
C)  the size of the country. 
D)  identical production costs between two countries. 
E)  the stock of natural resources.

Question 6

The largest regional trading bloc is the _____

Accepted Answer

A)  North American Free Trade Agreement. 
B)  European Community. 
C)  Latin American Free Trade Agreement. 
D)  Asian Free Trade Agreement. 
E)  East Asian Cooperation Council. 
A)  North American Free Trade Agreement. 
B)  European Community. 
C)  Latin American Free Trade Agreement. 
D)  Asian Free Trade Agreement. 
E)  East Asian Cooperation Council.

Question 7

Exhibit 17.2
  
-Refer to Exhibit 17.2, which shows U.S. demand for and domestic supply of a good. Suppose the world price of the good is $1.00 per unit, and a specific tariff of $0.50 per unit is imposed on each unit of the imported good. In such a case, the government revenue from a tariff of $0.50 per unit is represented by area _____

Accepted Answer

A)  c. 
B)  e + g. 
C)  i + e + f. 
D)  d + e. 
E)  e. 
A)  c. 
B)  e + g. 
C)  i + e + f. 
D)  d + e. 
E)  e.

Question 8

Exhibit 17.4
  
-Refer to Exhibit 17.4, which shows the market for wheat for the country of Palatino. SD is the domestic supply of wheat, and DD is the domestic demand for wheat. Suppose the world price of wheat is $9 per bushel and a specific tariff of $6 is imposed on each bushel of wheat imported. The total loss in consumer surplus after the tariff is shown by area(s) _____

Accepted Answer

A)  F and E. 
B)  G. 
C)  A, B, C, and D. 
D)  I. 
E)  H. 
A)  F and E. 
B)  G. 
C)  A, B, C, and D. 
D)  I. 
E)  H.

Question 9

If a manufacturer sells goods abroad for a lesser price than what they sell for at home, it implies that _____

Accepted Answer

A)  an embargo has been established. 
B)  a quota has been imposed. 
C)  the manufacturer is engaged in dumping. 
D)  there has been an improvement in the terms of trade. 
E)  tariffs have been reduced. 
A)  an embargo has been established. 
B)  a quota has been imposed. 
C)  the manufacturer is engaged in dumping. 
D)  there has been an improvement in the terms of trade. 
E)  tariffs have been reduced.

Question 10

Which of the following was one of the objectives of the North American Free Trade Agreement (NAFTA)?

Accepted Answer

A)  to gain increased access to Mexico's huge oil reserves 
B)  to achieve political union with Mexico 
C)  to use it as a stepping stone to the formation of a free-trade bloc in the Western Hemisphere 
D)  to appease Canada 
E)  to increase immigration into the United States 
A)  to gain increased access to Mexico's huge oil reserves 
B)  to achieve political union with Mexico 
C)  to use it as a stepping stone to the formation of a free-trade bloc in the Western Hemisphere 
D)  to appease Canada 
E)  to increase immigration into the United States

Question 11

Exhibit 17.b
  
-Refer to Exhibit 17.b, which shows the supply of a product in the United States. With a quota of Q' or more per month, the U.S. price would _____

Accepted Answer

A)  change from P to P'. 
B)  change from P' to P. 
C)  be at P. 
D)  be at P'. 
E)  fall to zero. 
A)  change from P to P'. 
B)  change from P' to P. 
C)  be at P. 
D)  be at P'. 
E)  fall to zero.

Question 12

Which argument has been used to protect U.S. industries from import competition because their output is vital for national defense?

Accepted Answer

A)  the national defense argument 
B)  the infant industry argument 
C)  the antidumping argument 
D)  the jobs and income argument 
E)  the declining industries argument 
A)  the national defense argument 
B)  the infant industry argument 
C)  the antidumping argument 
D)  the jobs and income argument 
E)  the declining industries argument

Question 13

The international treaty established to negotiate lower trade restrictions is known as the _____

Accepted Answer

A)  World Bank Act. 
B)  General Agreement on Tariffs and Trade (GATT). 
C)  International Association for Free Trade (IAFT). 
D)  Countries United for Free Trade (CUFT). 
E)  International Development Fund. 
A)  World Bank Act. 
B)  General Agreement on Tariffs and Trade (GATT). 
C)  International Association for Free Trade (IAFT). 
D)  Countries United for Free Trade (CUFT). 
E)  International Development Fund.

Question 14

Unless there are barriers to prevent free international trade, a country becomes an importer _____

Accepted Answer

A)  when the world price exceeds the domestic price. 
B)  when the domestic price exceeds the world price. 
C)  when there is an excess supply in the domestic market. 
D)  when it wants to expand its scale of operation. 
E)  when the opportunity cost of producing a good is lower relative to other countries. 
A)  when the world price exceeds the domestic price. 
B)  when the domestic price exceeds the world price. 
C)  when there is an excess supply in the domestic market. 
D)  when it wants to expand its scale of operation. 
E)  when the opportunity cost of producing a good is lower relative to other countries.

Question 15

Exhibit 17.2
  
-Refer to Exhibit 17.2, which shows U.S. demand for and domestic supply of a good. Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of the imported good. In such a case, _____

Accepted Answer

A)  25 units will be exported. 
B)  25 units will be imported. 
C)  50 units will be exported. 
D)  50 units will be imported. 
E)  10 units will be exported. 
A)  25 units will be exported. 
B)  25 units will be imported. 
C)  50 units will be exported. 
D)  50 units will be imported. 
E)  10 units will be exported.

Question 16

U.S. imports of goods and services amounted to _____ in 2016, or _____ of GDP.

Accepted Answer

A)  $2.0 trillion; 12 percent 
B)  $2.0 trillion; 6 percent 
C)  $1.0 trillion; 12 percent 
D)  $1.0 trillion; 6 percent 
E)  $2.7 trillion; 15 percent 
A)  $2.0 trillion; 12 percent 
B)  $2.0 trillion; 6 percent 
C)  $1.0 trillion; 12 percent 
D)  $1.0 trillion; 6 percent 
E)  $2.7 trillion; 15 percent

Question 17

Consumer goods accounted for _____ of U.S. imports in 2016.

Accepted Answer

A)  22 percent 
B)  19 percent 
C)  16 percent 
D)  13 percent 
E)  5 percent 
A)  22 percent 
B)  19 percent 
C)  16 percent 
D)  13 percent 
E)  5 percent

Question 18

Which of the following is not a type of trade restriction?

Accepted Answer

A)  Nigeria protecting chicken growers by banning chicken imports 
B)  foreign producers transferring their technological know-how to a Chinese partner to gain access to Chinese markets 
C)  purity laws in Germany barring many non-German beers 
D)  European countries prohibiting imports of beef from hormone-fed cattle 
E)  allowing sugar imports from Mexico 
A)  Nigeria protecting chicken growers by banning chicken imports 
B)  foreign producers transferring their technological know-how to a Chinese partner to gain access to Chinese markets 
C)  purity laws in Germany barring many non-German beers 
D)  European countries prohibiting imports of beef from hormone-fed cattle 
E)  allowing sugar imports from Mexico

Question 19

Which of the following is true of an export subsidy?

Accepted Answer

A)  It increases the price of a good in the domestic market. 
B)  It limits free trade. 
C)  It gives rise to unsustainable government deficits. 
D)  It promotes free international trade. 
E)  It specifies that a certain portion of a final good must be produced domestically. 
A)  It increases the price of a good in the domestic market. 
B)  It limits free trade. 
C)  It gives rise to unsustainable government deficits. 
D)  It promotes free international trade. 
E)  It specifies that a certain portion of a final good must be produced domestically.

Question 20

Table 17.1
  
-Refer to Table 17.1, which shows the per-day production data of rice and T-shirts for two countries, Cambria and Bodoni. Based on the table, it can be said that trade between Bodoni and Cambria will benefit Cambria but not Bodoni.

Accepted Answer

A) True 
 B)False

Which of the following is not an argument in favor of restricting trade?

An import quota is a tax on imports.

Exhibit 17.3 -Refer to Exhibit 17.3, which shows the supply of and demand for baseballs in the United States. If the world price is $3 per baseball and a tariff of $1 per baseball is imposed, then the number of baseballs purchased in the United States is _____

Suppose workers in Transylvania can produce only two goods-yo-yos or sweat socks. If the Transylvanian currency is the daler, then the opportunity cost of producing yo-yos is measured in terms of _____

The basis of the benefits of specialization is _____

The largest regional trading bloc is the _____

If a manufacturer sells goods abroad for a lesser price than what they sell for at home, it implies that _____

Which of the following was one of the objectives of the North American Free Trade Agreement (NAFTA)?

Exhibit 17.b -Refer to Exhibit 17.b, which shows the supply of a product in the United States. With a quota of Q' or more per month, the U.S. price would _____

Which argument has been used to protect U.S. industries from import competition because their output is vital for national defense?

The international treaty established to negotiate lower trade restrictions is known as the _____

Unless there are barriers to prevent free international trade, a country becomes an importer _____

Exhibit 17.2 -Refer to Exhibit 17.2, which shows U.S. demand for and domestic supply of a good. Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of the imported good. In such a case, _____

U.S. imports of goods and services amounted to _ in 2016, or _ of GDP.

Consumer goods accounted for _____ of U.S. imports in 2016.

Which of the following is not a type of trade restriction?

Which of the following is true of an export subsidy?

Table 17.1 -Refer to Table 17.1, which shows the per-day production data of rice and T-shirts for two countries, Cambria and Bodoni. Based on the table, it can be said that trade between Bodoni and Cambria will benefit Cambria but not Bodoni.

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Finance.

Economic Development.

Filters

Exam 17: International Trade.

Which of the following is not an argument in favor of restricting trade?

An import quota is a tax on imports.

Exhibit 17.3 -Refer to Exhibit 17.3, which shows the supply of and demand for baseballs in the United States. If the world price is $3 per baseball and a tariff of $1 per baseball is imposed, then the number of baseballs purchased in the United States is _____

Suppose workers in Transylvania can produce only two goods-yo-yos or sweat socks. If the Transylvanian currency is the daler, then the opportunity cost of producing yo-yos is measured in terms of _____

The basis of the benefits of specialization is _____

The largest regional trading bloc is the _____

If a manufacturer sells goods abroad for a lesser price than what they sell for at home, it implies that _____

Which of the following was one of the objectives of the North American Free Trade Agreement (NAFTA)?

Exhibit 17.b -Refer to Exhibit 17.b, which shows the supply of a product in the United States. With a quota of Q' or more per month, the U.S. price would _____

Which argument has been used to protect U.S. industries from import competition because their output is vital for national defense?

The international treaty established to negotiate lower trade restrictions is known as the _____

Unless there are barriers to prevent free international trade, a country becomes an importer _____

Exhibit 17.2 -Refer to Exhibit 17.2, which shows U.S. demand for and domestic supply of a good. Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of the imported good. In such a case, _____

U.S. imports of goods and services amounted to _____ in 2016, or _____ of GDP.

Consumer goods accounted for _____ of U.S. imports in 2016.

Which of the following is not a type of trade restriction?

Which of the following is true of an export subsidy?

Table 17.1 -Refer to Table 17.1, which shows the per-day production data of rice and T-shirts for two countries, Cambria and Bodoni. Based on the table, it can be said that trade between Bodoni and Cambria will benefit Cambria but not Bodoni.

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Finance.

Economic Development.

Filters

U.S. imports of goods and services amounted to _ in 2016, or _ of GDP.