Question 1

Which of the following statements about the importance of trade to the U.S.economy is true?

Accepted Answer

A) Since 1950, both exports and imports have steadily decreased as a fraction of U.S.gross domestic product. 
B) Overall, about 80 percent of U.S.manufacturing jobs depend directly or indirectly on exports. 
C) The United States is the second largest exporter in the world. 
D) The U.S.economy is highly dependent on international trade for growth in its gross domestic product. 
A) Since 1950, both exports and imports have steadily decreased as a fraction of U.S.gross domestic product. 
B) Overall, about 80 percent of U.S.manufacturing jobs depend directly or indirectly on exports. 
C) The United States is the second largest exporter in the world. 
D) The U.S.economy is highly dependent on international trade for growth in its gross domestic product.

Question 2

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

Accepted Answer

A) tariff. 
B) quota. 
C) quantity floor. 
D) barricade. 
A) tariff. 
B) quota. 
C) quantity floor. 
D) barricade.

Question 3

Free trade refers to trade between countries without government restrictions.

Accepted Answer

A) True 
 B)False

Question 4

In the United States,imports and exports make up more than half of GDP.

Accepted Answer

A) True 
 B)False

Question 5

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.If there was no quota,how many pounds of peanuts would be imported?

Accepted Answer

A) 16 million 
B) 28 million 
C) 30 million 
D) 40 million 
A) 16 million 
B) 28 million 
C) 30 million 
D) 40 million

Question 6

What effect does a depreciation of the dollar have on real GDP in the United States in the short run?

Accepted Answer

A) Real GDP will fall. 
B) Real GDP will rise. 
C) Real GDP will be unaffected by the depreciation of the dollar. 
D) Real GDP will be unchanged, but nominal GDP will rise. 
A) Real GDP will fall. 
B) Real GDP will rise. 
C) Real GDP will be unaffected by the depreciation of the dollar. 
D) Real GDP will be unchanged, but nominal GDP will rise.

Question 7

Figure 19-1
   
Figure 19-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 19-1.Under autarky,the consumer surplus is

Accepted Answer

A) $195. 
B) $260. 
C) $300. 
D) $555. 
A) $195. 
B) $260. 
C) $300. 
D) $555.

Question 8

Protectionism

Accepted Answer

A) is the use of cheap labor to protect firms from paying high wages. 
B) is the use of trade barriers to protect domestic firms from foreign competition. 
C) refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D) refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts. 
A) is the use of cheap labor to protect firms from paying high wages. 
B) is the use of trade barriers to protect domestic firms from foreign competition. 
C) refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D) refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts.

Question 9

In 1995 ________,which was established in 1948,was replaced by ________.

Accepted Answer

A) the GATT; the WTO 
B) the WTO; NAFTA 
C) the Smoot-Hawley Tariff; the GATT 
D) NAFTA; the Smoot-Hawley Tariff 
A) the GATT; the WTO 
B) the WTO; NAFTA 
C) the Smoot-Hawley Tariff; the GATT 
D) NAFTA; the Smoot-Hawley Tariff

Question 10

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent ________ on imported tires and ________ on U.S.-produced tires.

Accepted Answer

A) more; more 
B) more; less 
C) less; more 
D) less; less 
A) more; more 
B) more; less 
C) less; more 
D) less; less

Question 11

Distinguish between a voluntary export restraint and a quota.

Accepted Answer

A voluntary export restraint is an agree

Question 12

Table 19-10
 $$\begin{array} { | l | c | c | } 
\hline & \text { Pens } & \text { Pencils } \
\hline \text { Trarl } & 40 & 160 \
\hline \text { Faral } & 50 & 150 \
\hline
\end{array}$$ 
Table 19-10 shows the output per week for pens and pencils by Tran and Farah.
-Refer to Table 19-10.
a.Which person has an absolute advantage in the production of pens? pencils?
b.Which person has a comparative advantage in the production of pens?
c.Which person has a comparative advantage in the production of pencils?

Accepted Answer

a.Farah has an absolute advantage in the

Question 13

Figure 19-11
  
-Refer to Figure 19-11.Consider the market for U.S.Dollars against the British pound shown in the graph above.From this graph we can conclude that the dollar price of a British pound has ________ to ________ dollars per pound

Accepted Answer

A) decreased; 0.46 
B) increased; 2.17 
C) decreased; 2.00 
D) increased; 0.50 
A) decreased; 0.46 
B) increased; 2.17 
C) decreased; 2.00 
D) increased; 0.50

Question 14

Figure 19-10
  
-Refer to Figure 19-10.The French fall in love with California wines and triple their purchases of this beverage.Assuming all else remains constant,this would be represented as a movement from ________.

Accepted Answer

A) B to A 
B) C to D 
C) B to C 
D) A to D 
E) A to B 
A) B to A 
B) C to D 
C) B to C 
D) A to D 
E) A to B

Question 15

When exchange rates are ________,we say that the country's exchange rate is fixed.

Accepted Answer

A) determined in the market 
B) set by a country's central bank 
C) determined by supply and demand 
D) relatively stable 
A) determined in the market 
B) set by a country's central bank 
C) determined by supply and demand 
D) relatively stable

Question 16

Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries.This protectionism will cause the greatest harm to

Accepted Answer

A) Canadian manufacturers. 
B) the Canadian government. 
C) manufacturers who export to Canada. 
D) Canadian consumers. 
A) Canadian manufacturers. 
B) the Canadian government. 
C) manufacturers who export to Canada. 
D) Canadian consumers.

Question 17

Table 19-4
 $$\begin{array} { | l | l | l | } 
\hline & \text { Berries } & \text { Fish } \
\hline \text { Rob } & 20 & 80 \
\hline \text { Bill } & 30 & 60 \
\hline
\end{array}$$ 
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and make their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced.
-Refer to Table 19-4.Use the table above to select the statement that accurately interprets the data in the table.

Accepted Answer

A) Bill has a comparative advantage in catching fish. 
B) Rob has a comparative advantage in picking berries. 
C) Rob has a comparative advantage in catching fish and picking berries. 
D) Bill has a comparative advantage in picking berries. 
A) Bill has a comparative advantage in catching fish. 
B) Rob has a comparative advantage in picking berries. 
C) Rob has a comparative advantage in catching fish and picking berries. 
D) Bill has a comparative advantage in picking berries.

Question 18

Which of the following is the best example of a quota?

Accepted Answer

A) a limit imposed on the number of sport 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 sport utility vehicles sold in the domestic market 
D) a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States 
A) a limit imposed on the number of sport 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 sport utility vehicles sold in the domestic market 
D) a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States

Question 19

A tax imposed by a government on imports of a good into a country is called

Accepted Answer

A) an import levy. 
B) an import fine. 
C) a tariff. 
D) an import quota. 
A) an import levy. 
B) an import fine. 
C) a tariff. 
D) an import quota.

Question 20

Explain whether it is possible for a country to have a comparative advantage in the production of a product without having an absolute advantage in the production of that product.

Accepted Answer

A country can have a comparative advanta

Which of the following statements about the importance of trade to the U.S.economy is true?

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

Free trade refers to trade between countries without government restrictions.

In the United States,imports and exports make up more than half of GDP.

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.If there was no quota,how many pounds of peanuts would be imported?

What effect does a depreciation of the dollar have on real GDP in the United States in the short run?

Figure 19-1 Figure 19-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 19-1.Under autarky,the consumer surplus is

Protectionism

In 1995 ,which was established in 1948,was replaced by .

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent on imported tires and on U.S.-produced tires.

Distinguish between a voluntary export restraint and a quota.

Figure 19-11 -Refer to Figure 19-11.Consider the market for U.S.Dollars against the British pound shown in the graph above.From this graph we can conclude that the dollar price of a British pound has to dollars per pound

Figure 19-10 -Refer to Figure 19-10.The French fall in love with California wines and triple their purchases of this beverage.Assuming all else remains constant,this would be represented as a movement from ________.

When exchange rates are ________,we say that the country's exchange rate is fixed.

Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries.This protectionism will cause the greatest harm to

Which of the following is the best example of a quota?

A tax imposed by a government on imports of a good into a country is called

Explain whether it is possible for a country to have a comparative advantage in the production of a product without having an absolute advantage in the production of that product.

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

Which of the following statements about the importance of trade to the U.S.economy is true?

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

Free trade refers to trade between countries without government restrictions.

In the United States,imports and exports make up more than half of GDP.

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.If there was no quota,how many pounds of peanuts would be imported?

What effect does a depreciation of the dollar have on real GDP in the United States in the short run?

Figure 19-1 Figure 19-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 19-1.Under autarky,the consumer surplus is

Protectionism

In 1995 ________,which was established in 1948,was replaced by ________.

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent ________ on imported tires and ________ on U.S.-produced tires.

Distinguish between a voluntary export restraint and a quota.

Figure 19-11 -Refer to Figure 19-11.Consider the market for U.S.Dollars against the British pound shown in the graph above.From this graph we can conclude that the dollar price of a British pound has ________ to ________ dollars per pound

Figure 19-10 -Refer to Figure 19-10.The French fall in love with California wines and triple their purchases of this beverage.Assuming all else remains constant,this would be represented as a movement from ________.

When exchange rates are ________,we say that the country's exchange rate is fixed.

Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries.This protectionism will cause the greatest harm to

Which of the following is the best example of a quota?

A tax imposed by a government on imports of a good into a country is called

Explain whether it is possible for a country to have a comparative advantage in the production of a product without having an absolute advantage in the production of that product.

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

In 1995 ,which was established in 1948,was replaced by .

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent on imported tires and on U.S.-produced tires.

Figure 19-11 -Refer to Figure 19-11.Consider the market for U.S.Dollars against the British pound shown in the graph above.From this graph we can conclude that the dollar price of a British pound has to dollars per pound