Question 1

Tastes for products such as beer differ.As a result

Accepted Answer

A) we see countries specializing completely in the production of beer. 
B) consumers of beer have difficulty deciding what type of imported beer to buy. 
C) the quality of imported beer is less than it could be. 
D) different countries may each have a comparative advantage in producing different types of beer. 
A) we see countries specializing completely in the production of beer. 
B) consumers of beer have difficulty deciding what type of imported beer to buy. 
C) the quality of imported beer is less than it could be. 
D) different countries may each have a comparative advantage in producing different types of beer.

Question 2

Figure 19-3
   
Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota.
-Refer to Figure 19-3.What is the value of the deadweight loss as a result of the quota?

Accepted Answer

A) $5.25 million 
B) $8 million 
C) $17.25 million 
D) $20 million 
A) $5.25 million 
B) $8 million 
C) $17.25 million 
D) $20 million

Question 3

Table 19-5
 $$\begin{array} { | l | l | l | } 
\hline & \text { Bmpanadns } & \text { Tacus } \
\hline \text { Madison } & 30 & 50 \
\hline \text { Austir } & 24 & 32 \
\hline
\end{array}$$ 
Madison and Austin own Cafe Ole'.Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
-Refer to Table 19-5.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Madison has a greater opportunity cost than Austin for making tacos. 
B) Madison's opportunity cost for making tacos is less than Austin's. 
C) Austin has a greater opportunity cost than Madison for making empanadas. 
D) Austin's opportunity cost for making tacos and making empanadas are both greater than Madison's. 
A) Madison has a greater opportunity cost than Austin for making tacos. 
B) Madison's opportunity cost for making tacos is less than Austin's. 
C) Austin has a greater opportunity cost than Madison for making empanadas. 
D) Austin's opportunity cost for making tacos and making empanadas are both greater than Madison's.

Question 4

Figure 19-2
   
Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.The increase in domestic producer surplus as a result of the tariff is equal to the area

Accepted Answer

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

Question 5

Although the United States is the second largest exporting country,international trade is less important to the U.S.than it is to most other countries.

Accepted Answer

A) True 
 B)False

Question 6

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

Accepted Answer

A) The criticisms of economists are based on theory.In fact, protectionism increases consumer and producer surplus as well as employment. 
B) Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C) Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D) Supporters of protectionism believe that free trade will lead to inflation. 
A) The criticisms of economists are based on theory.In fact, protectionism increases consumer and producer surplus as well as employment. 
B) Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C) Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D) Supporters of protectionism believe that free trade will lead to inflation.

Question 7

Which of the following is not a source of comparative advantage?

Accepted Answer

A) relative abundance of labor and capital 
B) technology 
C) climate and natural resources 
D) a strong foreign currency exchange rate 
A) relative abundance of labor and capital 
B) technology 
C) climate and natural resources 
D) a strong foreign currency exchange rate

Question 8

Figure 19-3
   
Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota.
-Refer to Figure 19-3.What is the area that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Accepted Answer

A) I + J 
B) E + I + J + M 
C) I + J + K+ L 
D) G + H + I + J 
A) I + J 
B) E + I + J + M 
C) I + J + K+ L 
D) G + H + I + J

Question 9

What was the GATT,why was it established,and why and with what was it replaced?

Accepted Answer

By the end of World War II in 1945,gover

Question 10

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then

Accepted Answer

A) the average cost of production for sugar cane is lower in Brazil than in Cuba. 
B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba. 
C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba. 
D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba. 
A) the average cost of production for sugar cane is lower in Brazil than in Cuba. 
B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba. 
C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba. 
D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba.

Question 11

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed it

Accepted Answer

A) eliminated all tariffs among its member countries. 
B) completed a trade treaty (NAFT
A) that reduced tariff rates between the EU and North American countries. 
C) greatly decreased imports and exports among its member countries. 
D) barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets from Airbus, a European company. 
A) eliminated all tariffs among its member countries. 
B) completed a trade treaty (NAFT
A) that reduced tariff rates between the EU and North American countries. 
C) greatly decreased imports and exports among its member countries. 
D) barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets from Airbus, a European company.

Question 12

Explain why international trade is less important to the United States than it is to many other countries.

Accepted Answer

In the United States,international trade

Question 13

Figure 19-5
   
Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 19-5 shows the impact of this tariff.
-Refer to Figure 19-5.Without the tariff in place,the United States produces

Accepted Answer

A) 12 million pounds of coffee. 
B) 26 million pounds of coffee. 
C) 33 million pounds of coffee. 
D) 45 million pounds of coffee. 
A) 12 million pounds of coffee. 
B) 26 million pounds of coffee. 
C) 33 million pounds of coffee. 
D) 45 million pounds of coffee.

Question 14

Costa Rica is a leading exporter of bananas.What explains the comparative advantage of this country in banana production?

Accepted Answer

A) climate and soil conditions in Costa Rica which are well-suited for banana production 
B) investment by multinational firms such as Chiquita Brands International and the Dole Food Company 
C) a large supply of unskilled labor 
D) positive externalities 
A) climate and soil conditions in Costa Rica which are well-suited for banana production 
B) investment by multinational firms such as Chiquita Brands International and the Dole Food Company 
C) a large supply of unskilled labor 
D) positive externalities

Question 15

Over the past several decades there has been a rapid growth in international trade.This growth has been due to all except one of the following factors.Which factor has not contributed to the growth of international trade?

Accepted Answer

A) the spread of reliable communications 
B) a change in the tariffs charged on many goods 
C) a reduction in shipping costs 
D) favorable changes in government policies 
A) the spread of reliable communications 
B) a change in the tariffs charged on many goods 
C) a reduction in shipping costs 
D) favorable changes in government policies

Question 16

In 1995,the General Agreement on Tariffs and Trade (GATT),which was established in 1948,was replaced by the World Trade Organization (WTO).Why did members of the GATT push for the establishment of the WTO?

Accepted Answer

A) The GATT agreement only covered trade in goods.The WTO was created to cover trade in goods, services and intellectual property. 
B) The charter of the GATT had run out and a new organization was needed to promote international trade. 
C) The creation of the European Union (EU)made the GATT obsolete.The WTO was formed to regulate trade between the EU and other nations. 
D) By 1995 tariffs had been eliminated.The WTO was created to reduce non-tariff trade barriers. 
A) The GATT agreement only covered trade in goods.The WTO was created to cover trade in goods, services and intellectual property. 
B) The charter of the GATT had run out and a new organization was needed to promote international trade. 
C) The creation of the European Union (EU)made the GATT obsolete.The WTO was formed to regulate trade between the EU and other nations. 
D) By 1995 tariffs had been eliminated.The WTO was created to reduce non-tariff trade barriers.

Question 17

Figure 19-4
   
Figure 19-4 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 19-4.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents consumer surplus?

Accepted Answer

A) R + S 
B) R + S + T + U 
C) V + W + X + Y 
D) R + S + V 
A) R + S 
B) R + S + T + U 
C) V + W + X + Y 
D) R + S + V

Question 18

If the opportunity cost of production for two goods is different between two countries,then

Accepted Answer

A) trade cannot benefit either country. 
B) only one country can be made better off by trade. 
C) mutually beneficial trade is possible. 
D) trade will only benefit both countries if one can lower its opportunity costs. 
A) trade cannot benefit either country. 
B) only one country can be made better off by trade. 
C) mutually beneficial trade is possible. 
D) trade will only benefit both countries if one can lower its opportunity costs.

Question 19

Table 19-12
Production and
Consumption Production
Without Trade With Trade
 $$\begin{array} { | l | l | l | l | l | l | } 
\hline & \text { Swards } & \text { Beltr } & & \text { Svards } & \text { Beltr } \
\hline \text { Estoria } & 100 & 50 && 200 & 0 \
\hline \text { Morocco } & 50 & 40 && 0 & 120 \
\hline
\end{array}$$ 
Estonia and Morocco can produce both swords and belts.Table 19-12 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-12.If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,how many swords will Estonia gain compared to the "without trade"numbers?

Accepted Answer

A) 5 
B) 45 
C) 100 
D) 105 
A) 5 
B) 45 
C) 100 
D) 105

Question 20

Which of the following is the best example of a voluntary export restraint?

Accepted Answer

A) a limit set by the Japanese government on the number of sports utility vehicles that the United States can import from Japan 
B) a subsidy granted by the U.S.government to domestic garment manufacturers so they can compete more effectively with foreign garment manufacturers 
C) a tax placed on all sports utility vehicles sold in the domestic market 
D) a $5,000 per-car fee imposed on all sports utility vehicles imported into the United States 
A) a limit set by the Japanese government on the number of sports utility vehicles that the United States can import from Japan 
B) a subsidy granted by the U.S.government to domestic garment manufacturers so they can compete more effectively with foreign garment manufacturers 
C) a tax placed on all sports utility vehicles sold in the domestic market 
D) a $5,000 per-car fee imposed on all sports utility vehicles imported into the United States

Tastes for products such as beer differ.As a result

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the value of the deadweight loss as a result of the quota?

Table 19-5 Bmpanadns Tacus Madison 30 50 Austir 24 32 Madison and Austin own Cafe Ole'.Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 19-5.Select the statement that accurately interprets the data in the table.

Figure 19-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.The increase in domestic producer surplus as a result of the tariff is equal to the area

Although the United States is the second largest exporting country,international trade is less important to the U.S.than it is to most other countries.

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

Which of the following is not a source of comparative advantage?

What was the GATT,why was it established,and why and with what was it replaced?

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed it

Explain why international trade is less important to the United States than it is to many other countries.

Figure 19-5 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 19-5 shows the impact of this tariff. -Refer to Figure 19-5.Without the tariff in place,the United States produces

Costa Rica is a leading exporter of bananas.What explains the comparative advantage of this country in banana production?

Over the past several decades there has been a rapid growth in international trade.This growth has been due to all except one of the following factors.Which factor has not contributed to the growth of international trade?

In 1995,the General Agreement on Tariffs and Trade (GATT),which was established in 1948,was replaced by the World Trade Organization (WTO).Why did members of the GATT push for the establishment of the WTO?

Figure 19-4 Figure 19-4 shows the U.S.demand and supply for leather footwear. -Refer to Figure 19-4.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents consumer surplus?

If the opportunity cost of production for two goods is different between two countries,then

Which of the following is the best example of a voluntary export restraint?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters

Exam 19: Comparative Advantage, international Trade, and Exchange Rates

Tastes for products such as beer differ.As a result

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the value of the deadweight loss as a result of the quota?

Table 19-5 Bmpanadns Tacus Madison 30 50 Austir 24 32 Madison and Austin own Cafe Ole'.Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 19-5.Select the statement that accurately interprets the data in the table.

Figure 19-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.The increase in domestic producer surplus as a result of the tariff is equal to the area

Although the United States is the second largest exporting country,international trade is less important to the U.S.than it is to most other countries.

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

Which of the following is not a source of comparative advantage?

What was the GATT,why was it established,and why and with what was it replaced?

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed it

Explain why international trade is less important to the United States than it is to many other countries.

Figure 19-5 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 19-5 shows the impact of this tariff. -Refer to Figure 19-5.Without the tariff in place,the United States produces

Costa Rica is a leading exporter of bananas.What explains the comparative advantage of this country in banana production?

Over the past several decades there has been a rapid growth in international trade.This growth has been due to all except one of the following factors.Which factor has not contributed to the growth of international trade?

In 1995,the General Agreement on Tariffs and Trade (GATT),which was established in 1948,was replaced by the World Trade Organization (WTO).Why did members of the GATT push for the establishment of the WTO?

Figure 19-4 Figure 19-4 shows the U.S.demand and supply for leather footwear. -Refer to Figure 19-4.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents consumer surplus?

If the opportunity cost of production for two goods is different between two countries,then

Which of the following is the best example of a voluntary export restraint?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters