Question 1

What is the national security argument to support protection from international trade?

Accepted Answer

A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability. 
A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability.

Question 2

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

Accepted Answer

A)  save domestic jobs 
B)  national security 
C)  anti-dumping 
D)  infant-industry 
E)  penalizing lax environmental standards 
A)  save domestic jobs 
B)  national security 
C)  anti-dumping 
D)  infant-industry 
E)  penalizing lax environmental standards

Question 3

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A,then Country A will ________ corn,which will ________ consumer surplus,________ producer surplus,and ________ total surplus.

Accepted Answer

A)  import; increase; decrease; increase 
B)  import; decrease; increase; increase 
C)  export; increase; decrease; increase 
D)  export; decrease; increase; increase 
E)  export; decrease; increase; decrease 
A)  import; increase; decrease; increase 
B)  import; decrease; increase; increase 
C)  export; increase; decrease; increase 
D)  export; decrease; increase; increase 
E)  export; decrease; increase; decrease

Question 4

The United States exports a good if its no-trade U.S.price is ________ its world price.With international trade,U.S.production of the good ________ compared to the level of no-trade production.

Accepted Answer

A)  higher than; does not change 
B)  higher than; increases 
C)  lower than; increases 
D)  the same as; increases 
E)  the same as; does not change 
A)  higher than; does not change 
B)  higher than; increases 
C)  lower than; increases 
D)  the same as; increases 
E)  the same as; does not change

Question 5

The infant-industry argument is used by those who assert they want to

Accepted Answer

A)  limit imports to protect new industries. 
B)  increase exports to encourage growth of new industries. 
C)  limit exports. 
D)  increase imports to earn money to support new industries. 
E)  encourage foreign firms to dump in the United States. 
A)  limit imports to protect new industries. 
B)  increase exports to encourage growth of new industries. 
C)  limit exports. 
D)  increase imports to earn money to support new industries. 
E)  encourage foreign firms to dump in the United States.

Question 6

If a tariff is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will ________ and U.S.producer surplus from shrimp will ________.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  increase; not change 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  increase; not change

Question 7

When a nation exports a good or service in which it has a comparative advantage,employment in that industry

Accepted Answer

A)  decreases. 
B)  stays the same. 
C)  increases. 
D)  might change, but more information about what else the country exports is needed to determine if employment increases, decreases, or does not change. 
E)  might change, but more information about what the country imports is needed to determine if employment increases, decreases, or does not change. 
A)  decreases. 
B)  stays the same. 
C)  increases. 
D)  might change, but more information about what else the country exports is needed to determine if employment increases, decreases, or does not change. 
E)  might change, but more information about what the country imports is needed to determine if employment increases, decreases, or does not change.

Question 8

-The above figure shows the U.S.market for wheat.With international trade,________ is the transfer of surplus from consumers to producers.

Accepted Answer

A)  area B + area C 
B)  area D 
C)  area C + area F 
D)  area C + area D 
E)  area B + area C + area D 
A)  area B + area C 
B)  area D 
C)  area C + area F 
D)  area C + area D 
E)  area B + area C + area D

Question 9

All of the following statements about the United States are true EXCEPT:

Accepted Answer

A)  The largest imports are services like royalties, license fees, and financial services, and the largest exports are goods like crude oil, automobiles, and clothing. 
B)  The United States is the world's largest international trader. 
C)  The United States imports more than it exports. 
D)  Services account for a larger portion of U.S. exports than U.S. imports. 
E)  Imports are a larger percentage of total expenditure than exports are a percentage of total production. 
A)  The largest imports are services like royalties, license fees, and financial services, and the largest exports are goods like crude oil, automobiles, and clothing. 
B)  The United States is the world's largest international trader. 
C)  The United States imports more than it exports. 
D)  Services account for a larger portion of U.S. exports than U.S. imports. 
E)  Imports are a larger percentage of total expenditure than exports are a percentage of total production.

Question 10

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is higher than the equilibrium price of corn in Country A,then Country A will ________ corn,which will ________ consumer surplus,________ producer surplus,and ________ total surplus.

Accepted Answer

A)  import; increase; decrease; increase 
B)  import; decrease; increase; increase 
C)  export; increase; decrease; increase 
D)  export; decrease; increase; increase 
E)  export; decrease; increase; decrease 
A)  import; increase; decrease; increase 
B)  import; decrease; increase; increase 
C)  export; increase; decrease; increase 
D)  export; decrease; increase; increase 
E)  export; decrease; increase; decrease

Question 11

If a nation imports a good that can be domestically produced,what happens to the quantity consumed of the good and why?

Accepted Answer

A)  The quantity consumed increases because the market price decreases. 
B)  The quantity consumed decreases because the market price increases. 
C)  The quantity consumed remains constant because the price is unchanged. 
D)  The quantity consumed increases because the nation produces more of the good. 
E)  The quantity consumed decreases because the market price decreases. 
A)  The quantity consumed increases because the market price decreases. 
B)  The quantity consumed decreases because the market price increases. 
C)  The quantity consumed remains constant because the price is unchanged. 
D)  The quantity consumed increases because the nation produces more of the good. 
E)  The quantity consumed decreases because the market price decreases.

Question 12

When a nation exports a good,its ________ surplus decreases and its ________ surplus increases.

Accepted Answer

A)  consumer; total 
B)  consumer; consumer 
C)  producer; producer 
D)  producer; consumer 
E)  total; consumer 
A)  consumer; total 
B)  consumer; consumer 
C)  producer; producer 
D)  producer; consumer 
E)  total; consumer

Question 13

Which of the following is NOT a major argument for restricting international trade?

Accepted Answer

A)  the promotion of dumping in America 
B)  the national security argument 
C)  the infant industry argument 
D)  the prevention of dumping argument 
E)  saves U.S. jobs argument 
A)  the promotion of dumping in America 
B)  the national security argument 
C)  the infant industry argument 
D)  the prevention of dumping argument 
E)  saves U.S. jobs argument

Question 14

When a nation exports a good or service in which it has a comparative advantage,production of the good or service

Accepted Answer

A)  decreases. 
B)  stays the same. 
C)  increases. 
D)  might change, but more information about what the country imports is needed to determine if production increases, decreases, or does not change. 
E)  might change, but more information about what else the country exports is needed to determine if production increases, decreases, or does not change. 
A)  decreases. 
B)  stays the same. 
C)  increases. 
D)  might change, but more information about what the country imports is needed to determine if production increases, decreases, or does not change. 
E)  might change, but more information about what else the country exports is needed to determine if production increases, decreases, or does not change.

Question 15

As a result of importing a good,domestic consumers ________ the quantity consumed and the price of the good ________.

Accepted Answer

A)  increase; rises 
B)  increase; falls 
C)  decrease; rises 
D)  decrease; falls 
E)  increase; does not change 
A)  increase; rises 
B)  increase; falls 
C)  decrease; rises 
D)  decrease; falls 
E)  increase; does not change

Question 16

-The above figure shows the U.S.market for replacement cell phone batteries.Area B + area D is the

Accepted Answer

A)  tariff revenue. 
B)  decrease in consumer surplus due to the tariff. 
C)  deadweight loss from tariff. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff. 
A)  tariff revenue. 
B)  decrease in consumer surplus due to the tariff. 
C)  deadweight loss from tariff. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff.

Question 17

-The above figure shows the U.S.market for wheat.With international trade,consumer surplus is equal to ________.

Accepted Answer

A)  area A + area B + area C 
B)  area E + area F 
C)  area B + area C + area D 
D)  area A + area B + area C + area D 
E)  area A 
A)  area A + area B + area C 
B)  area E + area F 
C)  area B + area C + area D 
D)  area A + area B + area C + area D 
E)  area A

Question 18

Dumping is defined as the situation in which

Accepted Answer

A)  domestic producers sell a product at prices below the cost of production. 
B)  foreign producers sell a product at a price below the cost of production. 
C)  foreign producers sell a product at a price above a fair level. 
D)  domestic producers cut production to drive up domestic prices. 
E)  domestic producers are protected by tariffs. 
A)  domestic producers sell a product at prices below the cost of production. 
B)  foreign producers sell a product at a price below the cost of production. 
C)  foreign producers sell a product at a price above a fair level. 
D)  domestic producers cut production to drive up domestic prices. 
E)  domestic producers are protected by tariffs.

Question 19

A tariff is

Accepted Answer

A)  the domestic price charged by an exporting firm. 
B)  a tax on an imported good imposed by the importing country. 
C)  a licensing regulation that limits imports. 
D)  price dumping by a firm engaging in international trade. 
E)  the world price of a good or service. 
A)  the domestic price charged by an exporting firm. 
B)  a tax on an imported good imposed by the importing country. 
C)  a licensing regulation that limits imports. 
D)  price dumping by a firm engaging in international trade. 
E)  the world price of a good or service.

Question 20

Airlines in other countries buy airplanes from Boeing because

Accepted Answer

A)  it is illegal to produce airplanes in many other countries. 
B)  Boeing's prices are less than what the airlines would pay for planes built in their own country. 
C)  trade treaties require such purchases. 
D)  these nations must buy something from the United States. 
E)  None of the above answers is correct. 
A)  it is illegal to produce airplanes in many other countries. 
B)  Boeing's prices are less than what the airlines would pay for planes built in their own country. 
C)  trade treaties require such purchases. 
D)  these nations must buy something from the United States. 
E)  None of the above answers is correct.

What is the national security argument to support protection from international trade?

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A,then Country A will corn,which will consumer surplus, producer surplus,and total surplus.

The United States exports a good if its no-trade U.S.price is its world price.With international trade,U.S.production of the good compared to the level of no-trade production.

The infant-industry argument is used by those who assert they want to

If a tariff is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will and U.S.producer surplus from shrimp will .

When a nation exports a good or service in which it has a comparative advantage,employment in that industry

-The above figure shows the U.S.market for wheat.With international trade,________ is the transfer of surplus from consumers to producers.

All of the following statements about the United States are true EXCEPT:

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is higher than the equilibrium price of corn in Country A,then Country A will corn,which will consumer surplus, producer surplus,and total surplus.

If a nation imports a good that can be domestically produced,what happens to the quantity consumed of the good and why?

When a nation exports a good,its surplus decreases and its surplus increases.

Which of the following is NOT a major argument for restricting international trade?

When a nation exports a good or service in which it has a comparative advantage,production of the good or service

As a result of importing a good,domestic consumers the quantity consumed and the price of the good .

-The above figure shows the U.S.market for replacement cell phone batteries.Area B + area D is the

-The above figure shows the U.S.market for wheat.With international trade,consumer surplus is equal to ________.

Dumping is defined as the situation in which

A tariff is

Airlines in other countries buy airplanes from Boeing because

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 9: Global Markets in Action

What is the national security argument to support protection from international trade?

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A,then Country A will ________ corn,which will ________ consumer surplus,________ producer surplus,and ________ total surplus.

The United States exports a good if its no-trade U.S.price is ________ its world price.With international trade,U.S.production of the good ________ compared to the level of no-trade production.

The infant-industry argument is used by those who assert they want to

If a tariff is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will ________ and U.S.producer surplus from shrimp will ________.

When a nation exports a good or service in which it has a comparative advantage,employment in that industry

-The above figure shows the U.S.market for wheat.With international trade,________ is the transfer of surplus from consumers to producers.

All of the following statements about the United States are true EXCEPT:

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is higher than the equilibrium price of corn in Country A,then Country A will ________ corn,which will ________ consumer surplus,________ producer surplus,and ________ total surplus.

If a nation imports a good that can be domestically produced,what happens to the quantity consumed of the good and why?

When a nation exports a good,its ________ surplus decreases and its ________ surplus increases.

Which of the following is NOT a major argument for restricting international trade?

When a nation exports a good or service in which it has a comparative advantage,production of the good or service

As a result of importing a good,domestic consumers ________ the quantity consumed and the price of the good ________.

-The above figure shows the U.S.market for replacement cell phone batteries.Area B + area D is the

-The above figure shows the U.S.market for wheat.With international trade,consumer surplus is equal to ________.

Dumping is defined as the situation in which

A tariff is

Airlines in other countries buy airplanes from Boeing because

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A,then Country A will corn,which will consumer surplus, producer surplus,and total surplus.

The United States exports a good if its no-trade U.S.price is its world price.With international trade,U.S.production of the good compared to the level of no-trade production.

If a tariff is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will and U.S.producer surplus from shrimp will .

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is higher than the equilibrium price of corn in Country A,then Country A will corn,which will consumer surplus, producer surplus,and total surplus.

When a nation exports a good,its surplus decreases and its surplus increases.

As a result of importing a good,domestic consumers the quantity consumed and the price of the good .