Question 1

Originally, GATT members had agreed to three items. One of those was to _____

Accepted Answer

A)  protect U.S. industries and decrease world trade. 
B)  manage legal and accounting requirements for U.S. tariffs and quotas. 
C)  reduce import quotas. 
D)  increase trade restrictions, after OPEC significantly raised oil prices. 
E)  develop a free trade zone across 50 states. 
A)  protect U.S. industries and decrease world trade. 
B)  manage legal and accounting requirements for U.S. tariffs and quotas. 
C)  reduce import quotas. 
D)  increase trade restrictions, after OPEC significantly raised oil prices. 
E)  develop a free trade zone across 50 states.

Question 2

The cost of the resources used by domestic producer groups, including lobbying fees, propaganda, and legal restrictions, is collectively referred to as the cost of _____

Accepted Answer

A)  enforcement and implementation. 
B)  rent seeking. 
C)  retaliation. 
D)  collective action. 
E)  import substitution. 
A)  enforcement and implementation. 
B)  rent seeking. 
C)  retaliation. 
D)  collective action. 
E)  import substitution.

Question 3

International trade equalizes the opportunity cost of producing any good around the world.

Accepted Answer

A) True 
 B)False

Question 4

Suppose one worker in New Ralph Island can produce 40 walking sticks or 10 boomerangs each hour. The opportunity cost of producing 1 walking stick is _____

Accepted Answer

A)  40 boomerangs. 
B)  0.01 hour of labor. 
C)  4 boomerangs. 
D)  0.25 boomerangs. 
E)  0.5 hours of labor. 
A)  40 boomerangs. 
B)  0.01 hour of labor. 
C)  4 boomerangs. 
D)  0.25 boomerangs. 
E)  0.5 hours of labor.

Question 5

The third largest category of U.S. exports in 2016 was _____, which accounted for _____ of total exports.

Accepted Answer

A)  capital goods; 24 percent 
B)  services; 31 percent 
C)  industrial supplies; 18 percent 
D)  consumer goods; 9 percent 
E)  food; 31 percent 
A)  capital goods; 24 percent 
B)  services; 31 percent 
C)  industrial supplies; 18 percent 
D)  consumer goods; 9 percent 
E)  food; 31 percent

Question 6

International trade is most likely to occur whenever _____

Accepted Answer

A)  nations have an absolute advantage in the production of goods. 
B)  all of the trading nations are self-sufficient. 
C)  world production equals world consumption. 
D)  each of the trading nations gains from trade. 
E)  labor is cheaper abroad. 
A)  nations have an absolute advantage in the production of goods. 
B)  all of the trading nations are self-sufficient. 
C)  world production equals world consumption. 
D)  each of the trading nations gains from trade. 
E)  labor is cheaper abroad.

Question 7

Relative to quotas, tariffs lead to a greater change in the quantity of a good demanded by consumers.

Accepted Answer

A) True 
 B)False

Question 8

U.S. exports 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 9

Originally, GATT members had agreed to three items. One of those was to _____

Accepted Answer

A)  protect U.S. industries and decrease world trade. 
B)  manage legal and accounting requirements for U.S. tariffs and quotas. 
C)  reduce tariffs through multinational negotiations. 
D)  increase trade restrictions, after OPEC significantly raised oil prices. 
E)  develop a free trade zone across 50 states. 
A)  protect U.S. industries and decrease world trade. 
B)  manage legal and accounting requirements for U.S. tariffs and quotas. 
C)  reduce tariffs through multinational negotiations. 
D)  increase trade restrictions, after OPEC significantly raised oil prices. 
E)  develop a free trade zone across 50 states.

Question 10

In determining comparative advantage, the cost of producing a good is measured in terms of _____

Accepted Answer

A)  foreign currency. 
B)  domestic currency. 
C)  only gold. 
D)  marginal cost of the resources employed. 
E)  opportunities forgone. 
A)  foreign currency. 
B)  domestic currency. 
C)  only gold. 
D)  marginal cost of the resources employed. 
E)  opportunities forgone.

Question 11

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 Cambria has a comparative advantage in the production of rice.

Accepted Answer

A) True 
 B)False

Question 12

A charge levied on imports in terms of a fixed percentage of value is known as a(n) _____

Accepted Answer

A)  specific tariff. 
B)  ad valorem tariff. 
C)  import quota. 
D)  import concession. 
E)  import substitution. 
A)  specific tariff. 
B)  ad valorem tariff. 
C)  import quota. 
D)  import concession. 
E)  import substitution.

Question 13

For each watch the country of Marina produces, it gives up the opportunity to make 50 pounds of cheese. Cambria can produce one watch for every 100 pounds of cheese it produces. If specialization and trade were to occur between these two countries, which of the following is true of opportunity costs in the two countries?

Accepted Answer

A)  The opportunity cost of producing watches is higher in Marina than in Cambria. 
B)  The opportunity cost of producing cheese is higher in Marina than in Cambria. 
C)  The opportunity cost of producing cheese is identical in both countries. 
D)  The opportunity cost of producing watches is lower in Cambria than in Marina. 
E)  In both countries, the opportunity cost of one watch is 150 pounds of cheese. 
A)  The opportunity cost of producing watches is higher in Marina than in Cambria. 
B)  The opportunity cost of producing cheese is higher in Marina than in Cambria. 
C)  The opportunity cost of producing cheese is identical in both countries. 
D)  The opportunity cost of producing watches is lower in Cambria than in Marina. 
E)  In both countries, the opportunity cost of one watch is 150 pounds of cheese.

Question 14

Which of the following is a difference between the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)?

Accepted Answer

A)  The GATT was involved only in merchandise trade, while the WTO covers services and trade-related aspects of intellectual property. 
B)  The GATT was involved in settling disputes quickly, while the WTO relies on voluntary cooperation. 
C)  The GATT was developed to support Mexico's efforts to become more market-oriented, while the WTO aims to launch new provisions against dumping. 
D)  The GATT resolved more trade disputes in its first decade, while the WTO is susceptible to blockage. 
E)  The GATT was the institutional foundation for world trade, while the WTO is based on multilateral agreements with no institutional foundation. 
A)  The GATT was involved only in merchandise trade, while the WTO covers services and trade-related aspects of intellectual property. 
B)  The GATT was involved in settling disputes quickly, while the WTO relies on voluntary cooperation. 
C)  The GATT was developed to support Mexico's efforts to become more market-oriented, while the WTO aims to launch new provisions against dumping. 
D)  The GATT resolved more trade disputes in its first decade, while the WTO is susceptible to blockage. 
E)  The GATT was the institutional foundation for world trade, while the WTO is based on multilateral agreements with no institutional foundation.

Question 15

Exports account for _____ of the gross domestic product (GDP) in Japan.

Accepted Answer

A)  one-sixth 
B)  one-third 
C)  one-quarter 
D)  half 
E)  two-thirds 
A)  one-sixth 
B)  one-third 
C)  one-quarter 
D)  half 
E)  two-thirds

Question 16

Exhibit 17.1
  
-Refer to Exhibit 17.1 which shows the market equilibrium for corn in the United States. If the world price of corn is $6 and there are no trade restrictions, the United States will _____

Accepted Answer

A)  produce 7,000 bushels of corn, consume 3,000 bushels of corn, and import 4,000 bushels of corn. 
B)  produce 7,000 bushels of corn, consume 3,000 bushels of corn, and export 4,000 bushels of corn. 
C)  have an excess demand for corn. 
D)  produce 3,000 bushels of corn, consume 7,000 bushels of corn, and import 4,000 bushels of corn. 
E)  produce 3,000 bushels of corn, consume 7,000 bushels of corn, and export 4,000 bushels of corn. 
A)  produce 7,000 bushels of corn, consume 3,000 bushels of corn, and import 4,000 bushels of corn. 
B)  produce 7,000 bushels of corn, consume 3,000 bushels of corn, and export 4,000 bushels of corn. 
C)  have an excess demand for corn. 
D)  produce 3,000 bushels of corn, consume 7,000 bushels of corn, and import 4,000 bushels of corn. 
E)  produce 3,000 bushels of corn, consume 7,000 bushels of corn, and export 4,000 bushels of corn.

Question 17

The top trading partner for U.S. exports in 2016 was _____

Accepted Answer

A)  Canada. 
B)  China. 
C)  Ireland. 
D)  Japan. 
E)  Brazil. 
A)  Canada. 
B)  China. 
C)  Ireland. 
D)  Japan. 
E)  Brazil.

Question 18

Which of the following is not a reason for international specialization?

Accepted Answer

A)  Some countries have educated, trained workers, while other countries have unskilled workers. 
B)  Tastes and preferences tend to be different in different countries. 
C)  Economies of scale can allow larger, more specialized producers to operate at lower average costs. 
D)  People prefer having a choice of products. 
E)  The world price of a good is determined by the world supply and demand for it. 
A)  Some countries have educated, trained workers, while other countries have unskilled workers. 
B)  Tastes and preferences tend to be different in different countries. 
C)  Economies of scale can allow larger, more specialized producers to operate at lower average costs. 
D)  People prefer having a choice of products. 
E)  The world price of a good is determined by the world supply and demand for it.

Question 19

Exhibit 17.3
  
-Refer to Exhibit 17.3, which shows the supply of and the demand for baseballs in the United States. If the world price of a baseball is $3, then the quantity of baseballs demanded 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 20

Table 17.1
​ $$\begin{array}{l}
\text { Table } 17.1\
\begin{array} { l l l } 
& \begin{array} { l } 
\text { Computers } \
\text { (units) }
\end{array} & \begin{array} { l } 
\text { Shoes } \
\text { (pairs) }
\end{array} \
\text { Aharoni } & 600 & 300 \
\text { Kalinga } & 200 & 400
\end{array}
\end{array}$$
-Refer to Table 17.1. Suppose Aharoni and Kalinga are the only two countries in the world and they produce computers and shoes. Aharoni has 100 workers, and Kalinga has 200 workers. The table below shows the per-day production possibilities for each country. Aharoni has

Accepted Answer

A)  an absolute advantage in computers only. 
B)  an absolute advantage in shoes only. 
C)  a comparative advantage in computers. 
D)  a comparative advantage in shoes. 
E)  neither an absolute advantage nor a comparative advantage in computers. 
A)  an absolute advantage in computers only. 
B)  an absolute advantage in shoes only. 
C)  a comparative advantage in computers. 
D)  a comparative advantage in shoes. 
E)  neither an absolute advantage nor a comparative advantage in computers.

Originally, GATT members had agreed to three items. One of those was to _____

The cost of the resources used by domestic producer groups, including lobbying fees, propaganda, and legal restrictions, is collectively referred to as the cost of _____

International trade equalizes the opportunity cost of producing any good around the world.

Suppose one worker in New Ralph Island can produce 40 walking sticks or 10 boomerangs each hour. The opportunity cost of producing 1 walking stick is _____

The third largest category of U.S. exports in 2016 was _, which accounted for _ of total exports.

International trade is most likely to occur whenever _____

Relative to quotas, tariffs lead to a greater change in the quantity of a good demanded by consumers.

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

Originally, GATT members had agreed to three items. One of those was to _____

In determining comparative advantage, the cost of producing a good is measured in terms of _____

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 Cambria has a comparative advantage in the production of rice.

A charge levied on imports in terms of a fixed percentage of value is known as a(n) _____

Which of the following is a difference between the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)?

Exports account for _____ of the gross domestic product (GDP) in Japan.

Exhibit 17.1 -Refer to Exhibit 17.1 which shows the market equilibrium for corn in the United States. If the world price of corn is $6 and there are no trade restrictions, the United States will _____

The top trading partner for U.S. exports in 2016 was _____

Which of the following is not a reason for international specialization?

Exhibit 17.3 -Refer to Exhibit 17.3, which shows the supply of and the demand for baseballs in the United States. If the world price of a baseball is $3, then the quantity of baseballs demanded is _____.

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.

Originally, GATT members had agreed to three items. One of those was to _____

The cost of the resources used by domestic producer groups, including lobbying fees, propaganda, and legal restrictions, is collectively referred to as the cost of _____

International trade equalizes the opportunity cost of producing any good around the world.

Suppose one worker in New Ralph Island can produce 40 walking sticks or 10 boomerangs each hour. The opportunity cost of producing 1 walking stick is _____

The third largest category of U.S. exports in 2016 was _____, which accounted for _____ of total exports.

International trade is most likely to occur whenever _____

Relative to quotas, tariffs lead to a greater change in the quantity of a good demanded by consumers.

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

Originally, GATT members had agreed to three items. One of those was to _____

In determining comparative advantage, the cost of producing a good is measured in terms of _____

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 Cambria has a comparative advantage in the production of rice.

A charge levied on imports in terms of a fixed percentage of value is known as a(n) _____

Which of the following is a difference between the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)?

Exports account for _____ of the gross domestic product (GDP) in Japan.

Exhibit 17.1 -Refer to Exhibit 17.1 which shows the market equilibrium for corn in the United States. If the world price of corn is $6 and there are no trade restrictions, the United States will _____

The top trading partner for U.S. exports in 2016 was _____

Which of the following is not a reason for international specialization?

Exhibit 17.3 -Refer to Exhibit 17.3, which shows the supply of and the demand for baseballs in the United States. If the world price of a baseball is $3, then the quantity of baseballs demanded is _____.

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

The third largest category of U.S. exports in 2016 was _, which accounted for _ of total exports.

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