Question 1

If the U.S.put an import quota on vacuum cleaners,it would

Accepted Answer

A) raise U.S.net exports of vacuum cleaners and raise net exports of other U.S.goods. 
B) raise U.S.net exports of vacuum cleaners and lower net exports of other U.S.goods. 
C) lower U.S.net exports of vacuum cleaners and raise net exports of other U.S.goods. 
D) lower U.S.net exports of vacuum cleaners and lower net exports of other U.S.goods. 
A) raise U.S.net exports of vacuum cleaners and raise net exports of other U.S.goods. 
B) raise U.S.net exports of vacuum cleaners and lower net exports of other U.S.goods. 
C) lower U.S.net exports of vacuum cleaners and raise net exports of other U.S.goods. 
D) lower U.S.net exports of vacuum cleaners and lower net exports of other U.S.goods.

Question 2

Firms in a high-wage nation such as the U.S.can compete effectively with imports from low-wage nations if

Accepted Answer

A) skill levels are identical in the nations 
B) the U.S.reduces tariffs on imports 
C) low-wage nations impose tariffs on U.S.made goods 
D) labor productivity is higher in the low-wage nation 
E) labor productivity is higher in the U.S. 
A) skill levels are identical in the nations 
B) the U.S.reduces tariffs on imports 
C) low-wage nations impose tariffs on U.S.made goods 
D) labor productivity is higher in the low-wage nation 
E) labor productivity is higher in the U.S.

Question 3

Figure 17-10
  
-Refer to Figure 17-10.Producer surplus with trade and without a tariff is

Accepted Answer

A) G. 
B) C + G. 
C) A + C + G. 
D) A + B + C + G. 
A) G. 
B) C + G. 
C) A + C + G. 
D) A + B + C + G.

Question 4

What are the effects of a tariff,and who benefits and who loses when tariffs are imposed? What are the effects of a quota,and who benefits and who loses when quotas are imposed?

Accepted Answer

A tariff raises the domestic price of th

Question 5

When the nation of Econoland allows trade and as a result becomes an exporter of televisions,

Accepted Answer

A) residents who produce televisions become worse off;residents who buy televisions become better off;and the economic well-being of Econoland rises. 
B) residents who produce televisions become worse off;residents who buy televisions become better off;and the economic well-being of Econoland falls. 
C) residents who produce televisions become better off;residents who buy televisions become worse off;and the economic well-being of Econoland rises. 
D) residents who produce televisions become better off;residents who buy televisions become worse off;and the economic well-being of Econoland falls. 
A) residents who produce televisions become worse off;residents who buy televisions become better off;and the economic well-being of Econoland rises. 
B) residents who produce televisions become worse off;residents who buy televisions become better off;and the economic well-being of Econoland falls. 
C) residents who produce televisions become better off;residents who buy televisions become worse off;and the economic well-being of Econoland rises. 
D) residents who produce televisions become better off;residents who buy televisions become worse off;and the economic well-being of Econoland falls.

Question 6

Figure 17-13
  
-Figure 17-13 shows domestic supply and demand for baseballs in the United States.The world price of a baseball is $3.With free trade,how many baseballs will be purchased in the United States?

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 7

When a country allows trade and becomes an exporter of a good,

Accepted Answer

A) the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good. 
B) the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good. 
C) the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good. 
D) the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good. 
A) the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good. 
B) the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good. 
C) the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good. 
D) the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good.

Question 8

Trade restrictions that limit the sale of low-price foreign goods in the U.S.market

Accepted Answer

A) increase the real income of Americans. 
B) benefit domestic producers in the protected industries at the expense of consumers and domestic producers in export industries. 
C) help channel more of our resources into producing goods for which we are a low-cost producer. 
D) reduce unemployment and increase the productivity of American workers. 
A) increase the real income of Americans. 
B) benefit domestic producers in the protected industries at the expense of consumers and domestic producers in export industries. 
C) help channel more of our resources into producing goods for which we are a low-cost producer. 
D) reduce unemployment and increase the productivity of American workers.

Question 9

An import quota on a product protects domestic industries by

Accepted Answer

A) reducing the foreign supply to the domestic market and,thereby,raising the domestic price. 
B) increasing the foreign supply to the domestic market and,thereby,lowering the domestic price. 
C) increasing the domestic demand for the product and,thereby,increasing its price. 
D) providing the incentive for domestic producers to improve the efficiency of their operation and,thereby,reduce their per-unit costs of production. 
A) reducing the foreign supply to the domestic market and,thereby,raising the domestic price. 
B) increasing the foreign supply to the domestic market and,thereby,lowering the domestic price. 
C) increasing the domestic demand for the product and,thereby,increasing its price. 
D) providing the incentive for domestic producers to improve the efficiency of their operation and,thereby,reduce their per-unit costs of production.

Question 10

Figure 17-7
The domestic country is Jamaica.
  
-Refer to Figure 17-7.With trade,Jamaica

Accepted Answer

A) imports 150 calculators. 
B) imports 250 calculators. 
C) exports 100 calculators. 
D) exports 250 calculators. 
A) imports 150 calculators. 
B) imports 250 calculators. 
C) exports 100 calculators. 
D) exports 250 calculators.

Question 11

The primary source of purchasing power used to buy imported goods is

Accepted Answer

A) the monetary sector. 
B) the balance of payments deficit. 
C) the exports of a nation. 
D) taxation and other revenue-generating activities. 
A) the monetary sector. 
B) the balance of payments deficit. 
C) the exports of a nation. 
D) taxation and other revenue-generating activities.

Question 12

Suppose that the United States eliminated its tariff on automobiles,granting foreign-produced automobiles free entry into the U.S.market.Which of the following would be most likely to occur?

Accepted Answer

A) The price of automobiles to U.S.consumers would decline,and the demand for U.S.export products would increase. 
B) The price of automobiles to U.S.consumers would increase,and the demand for U.S.export products would decline. 
C) The price of automobiles to U.S.consumers would decline,and the demand for U.S.export products would decline. 
D) The price of automobiles to U.S.consumers would increase,and the demand for U.S.export products would increase. 
A) The price of automobiles to U.S.consumers would decline,and the demand for U.S.export products would increase. 
B) The price of automobiles to U.S.consumers would increase,and the demand for U.S.export products would decline. 
C) The price of automobiles to U.S.consumers would decline,and the demand for U.S.export products would decline. 
D) The price of automobiles to U.S.consumers would increase,and the demand for U.S.export products would increase.

Question 13

Economists consider tariffs to be

Accepted Answer

A) necessary for the protection of domestic industries and the achievement of full employment. 
B) harmful to domestic consumers. 
C) obstacles that hinder voluntary exchange and gains from trade. 
D) both b and c above 
A) necessary for the protection of domestic industries and the achievement of full employment. 
B) harmful to domestic consumers. 
C) obstacles that hinder voluntary exchange and gains from trade. 
D) both b and c above

Question 14

Dumping is

Accepted Answer

A) the sale of a good by a foreign supplier in another country at a price below that charged by the supplier in its home market. 
B) an inappropriate method for getting rid of byproducts from a production process. 
C) a method to increase competitiveness in a market. 
D) all of the above. 
E) both a and c above. 
A) the sale of a good by a foreign supplier in another country at a price below that charged by the supplier in its home market. 
B) an inappropriate method for getting rid of byproducts from a production process. 
C) a method to increase competitiveness in a market. 
D) all of the above. 
E) both a and c above.

Question 15

Measured as a share of the economy,the size of the trade sector (exports plus imports)of the United States has

Accepted Answer

A) been increasing since 1980,but it declined during 1960-1980. 
B) been relatively constant during the last four decades. 
C) increased by about 10 percent during the last four decades. 
D) approximately doubled since 1980 and tripled since 1960. 
A) been increasing since 1980,but it declined during 1960-1980. 
B) been relatively constant during the last four decades. 
C) increased by about 10 percent during the last four decades. 
D) approximately doubled since 1980 and tripled since 1960.

Question 16

Public choice theory indicates that tariffs,quotas,and other trade restrictions are primarily the result of the

Accepted Answer

A) political clout of foreigners. 
B) political clout of domestic consumers. 
C) political power of the special interest groups. 
D) attractiveness of sound economic policies to elected political officials. 
A) political clout of foreigners. 
B) political clout of domestic consumers. 
C) political power of the special interest groups. 
D) attractiveness of sound economic policies to elected political officials.

Question 17

According to the law of comparative advantage,a nation will benefit from international trade when it

Accepted Answer

A) imports more than it exports. 
B) exports more than it imports. 
C) imports goods for which it is a high opportunity-cost producer,while exporting goods for which it is a low opportunity-cost producer. 
D) exports goods for which it is a high opportunity-cost producer,while importing those goods for which it is a low opportunity-cost producer. 
A) imports more than it exports. 
B) exports more than it imports. 
C) imports goods for which it is a high opportunity-cost producer,while exporting goods for which it is a low opportunity-cost producer. 
D) exports goods for which it is a high opportunity-cost producer,while importing those goods for which it is a low opportunity-cost producer.

Question 18

The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan.
 
Which of the following is true?

Accepted Answer

A) Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production. 
B) Since Japanese workers produce more of both food and clothing than U.S.workers,no gains from trade are possible. 
C) Joint output would be maximized if the United States specialized in producing clothing and Japan in producing food. 
D) The Japanese are the low-cost producers of both food and clothing. 
A) Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production. 
B) Since Japanese workers produce more of both food and clothing than U.S.workers,no gains from trade are possible. 
C) Joint output would be maximized if the United States specialized in producing clothing and Japan in producing food. 
D) The Japanese are the low-cost producers of both food and clothing.

Question 19

If all tariffs (and quotas)between countries on the North American continent were eliminated,

Accepted Answer

A) small Central American countries would be hurt because they would be unable to compete with larger nations. 
B) the United States would gain at the expense of the less-developed North American countries. 
C) the combined wealth of the countries would increase because elimination of trade restrictions would permit greater gains from specialization. 
D) wage rates in the United States would decline to the average for the North American continent. 
A) small Central American countries would be hurt because they would be unable to compete with larger nations. 
B) the United States would gain at the expense of the less-developed North American countries. 
C) the combined wealth of the countries would increase because elimination of trade restrictions would permit greater gains from specialization. 
D) wage rates in the United States would decline to the average for the North American continent.

Question 20

Which of the following is a partially valid economic argument for restricting free trade?

Accepted Answer

A) Restrictions on foreign trade will increase employment and permanently reduce unemployment. 
B) Removal of restrictions that have existed for years will initially cause inflation. 
C) Infant industries need permanent protection to develop and gain productive efficiency. 
D) A nation needs to protect industries that are vital to national defense in case of future international conflict. 
A) Restrictions on foreign trade will increase employment and permanently reduce unemployment. 
B) Removal of restrictions that have existed for years will initially cause inflation. 
C) Infant industries need permanent protection to develop and gain productive efficiency. 
D) A nation needs to protect industries that are vital to national defense in case of future international conflict.

Exam 18: Gaining From International Trade

If the U.S.put an import quota on vacuum cleaners,it would

Firms in a high-wage nation such as the U.S.can compete effectively with imports from low-wage nations if

Figure 17-10 -Refer to Figure 17-10.Producer surplus with trade and without a tariff is

What are the effects of a tariff,and who benefits and who loses when tariffs are imposed? What are the effects of a quota,and who benefits and who loses when quotas are imposed?

When the nation of Econoland allows trade and as a result becomes an exporter of televisions,

Figure 17-13 -Figure 17-13 shows domestic supply and demand for baseballs in the United States.The world price of a baseball is $3.With free trade,how many baseballs will be purchased in the United States?

When a country allows trade and becomes an exporter of a good,

Trade restrictions that limit the sale of low-price foreign goods in the U.S.market

An import quota on a product protects domestic industries by

Figure 17-7 The domestic country is Jamaica. -Refer to Figure 17-7.With trade,Jamaica

The primary source of purchasing power used to buy imported goods is

Suppose that the United States eliminated its tariff on automobiles,granting foreign-produced automobiles free entry into the U.S.market.Which of the following would be most likely to occur?

Economists consider tariffs to be

Dumping is

Measured as a share of the economy,the size of the trade sector (exports plus imports)of the United States has

Public choice theory indicates that tariffs,quotas,and other trade restrictions are primarily the result of the

According to the law of comparative advantage,a nation will benefit from international trade when it

The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan. Which of the following is true?

If all tariffs (and quotas)between countries on the North American continent were eliminated,

Which of the following is a partially valid economic argument for restricting free trade?

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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