Question 1

A tariff is a tax imposed by a government on its own exports.

Accepted Answer

A) True 
 B)False

Question 2

Table 19-1
 $$\begin{array} { | l | c | c | } 
\hline & \text { Bathing } & \text { Grooming } \
\hline \text { Linda } & 60 & 20 \
\hline \text { Sandy } & 50 & 25 \
\hline
\end{array}$$ 
Linda and Sandy own The Preppy Puppy, a dog grooming business.Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week.
-Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Sandy has a comparative advantage in dog grooming. 
B) Linda has a comparative advantage in dog grooming. 
C) Linda has a comparative advantage in dog grooming and dog bathing. 
D) Sandy has a comparative advantage in dog bathing. 
A) Sandy has a comparative advantage in dog grooming. 
B) Linda has a comparative advantage in dog grooming. 
C) Linda has a comparative advantage in dog grooming and dog bathing. 
D) Sandy has a comparative advantage in dog bathing.

Question 3

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.With the tariff in place,the United States produces

Accepted Answer

A) 18 million pounds of coffee. 
B) 20 million pounds of coffee. 
C) 26 million pounds of coffee. 
D) 38 million pounds of coffee. 
A) 18 million pounds of coffee. 
B) 20 million pounds of coffee. 
C) 26 million pounds of coffee. 
D) 38 million pounds of coffee.

Question 4

If a country has a ________ exchange rate,its central bank must buy and sell its holdings of currencies to maintain a given exchange rate.

Accepted Answer

A) floating 
B) flexible 
C) fixed 
D) all of the above 
A) floating 
B) flexible 
C) fixed 
D) all of the above

Question 5

Table 19-3
 $$\begin{array} { | l | l | l | } 
\hline & \text { Candles } & \text { Sapp } \
\hline \text { Bryce } & 150 & 450 \
\hline \text { Tiraa } & 200 & 450 \
\hline
\end{array}$$ 
Bryce and Tina are artisans who produce homemade candles and soap.Table 19-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 19-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Tina has a comparative advantage in making soap. 
B) Bryce has a comparative advantage in making soap. 
C) Tina has a comparative advantage in making candles and making soap. 
D) Neither Bryce nor Tina has a comparative advantage in making soap. 
A) Tina has a comparative advantage in making soap. 
B) Bryce has a comparative advantage in making soap. 
C) Tina has a comparative advantage in making candles and making soap. 
D) Neither Bryce nor Tina has a comparative advantage in making soap.

Question 6

A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country.

Accepted Answer

A) a tax on goods 
B) a minimum quantity of a good 
C) quality standards on goods 
D) a numerical limit on the quantity of a good 
A) a tax on goods 
B) a minimum quantity of a good 
C) quality standards on goods 
D) a numerical limit on the quantity of a good

Question 7

A rise in the dollar price of the Chinese yuan signals an appreciation of the yuan and a depreciation of the dollar.

Accepted Answer

A) True 
 B)False

Question 8

Article Summary
Roberto Azevedo, director-general of the World Trade Organization (WTO), reported that global trade growth estimates will be lowered for 2013 and 2014 because of increasing global protectionism. The current protectionism is based primarily in regulations rather than the more common tariffs and subsidies. Since 2008, almost 700 new trade restrictions have materialized - over 150 of those in 2012 alone - with Russia being singled out as one of the primary offenders.

-Refer to the Article Summary.The protectionism being granted to Russian firms is likely to cause

Accepted Answer

A) exporting countries to retaliate by placing trade barriers on Russian imports. 
B) Russian manufacturers to become more efficient. 
C) Russian consumers to pay lower prices for a wider variety of products. 
D) most countries to reduce their own trade barriers to be able to better compete with Russian imports at home. 
A) exporting countries to retaliate by placing trade barriers on Russian imports. 
B) Russian manufacturers to become more efficient. 
C) Russian consumers to pay lower prices for a wider variety of products. 
D) most countries to reduce their own trade barriers to be able to better compete with Russian imports at home.

Question 9

Which of the following statements is true?

Accepted Answer

A) Japan is more dependent on foreign trade than is the United States. 
B) Imports and exports account for over one-half of the GDP of Belgium. 
C) France is the leading exporting country, accounting for 10 percent of total world exports. 
D) Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops. 
A) Japan is more dependent on foreign trade than is the United States. 
B) Imports and exports account for over one-half of the GDP of Belgium. 
C) France is the leading exporting country, accounting for 10 percent of total world exports. 
D) Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops.

Question 10

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.The tariff causes domestic consumption of coffee

Accepted Answer

A) to fall by 27 million pounds. 
B) to fall by 7 million pounds. 
C) to rise by 6 million pounds. 
D) to rise by 20 million pounds. 
A) to fall by 27 million pounds. 
B) to fall by 7 million pounds. 
C) to rise by 6 million pounds. 
D) to rise by 20 million pounds.

Question 11

Which of the following is an example of a trade restriction?

Accepted Answer

A) Japan places a tax on all Korean automobiles. 
B) Domestic wine is more expensive than wine imported from Chile. 
C) The United States, Canada, and Mexico sign the NAFTA agreement. 
D) Consumers prefer German beer to domestic beer. 
A) Japan places a tax on all Korean automobiles. 
B) Domestic wine is more expensive than wine imported from Chile. 
C) The United States, Canada, and Mexico sign the NAFTA agreement. 
D) Consumers prefer German beer to domestic beer.

Question 12

You're traveling in Ireland and are thinking about buying a new digital camera.You've decided you'd be willing to pay $125 for a new camera,but cameras in Ireland are all priced in euros.If the camera you're looking at costs 115 euros,under which of the following exchange rates would you be willing to purchase the camera? (Assume no taxes or duties are associated with the purchase.)

Accepted Answer

A) 0.56 euros per dollar 
B) 0.89 euros per dollar 
C) 0.92 euros per dollar 
D) You would purchase the new camera at any of the above exchange rates. 
A) 0.56 euros per dollar 
B) 0.89 euros per dollar 
C) 0.92 euros per dollar 
D) You would purchase the new camera at any of the above exchange rates.

Question 13

Table 19-11
Production and
Consumption Production
Without Trade With Trade
 $$\begin{array} { | l | l | l | l | l | l | } 
\hline & \text { Clucks } & \text { Huts } & & \text { Clocks } & \text { Hats } \
\hline \text { Derrnark } & 900 & 150 && 1,200 & 0 \
\hline \text { Belize } & 150 & 100 && 0 & 400 \
\hline
\end{array}$$ 
Denmark and Belize can produce both clocks and hats.Table 19-11 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-11.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Belize gain compared to the "without trade"numbers?

Accepted Answer

A) -100 
B) 0 
C) 150 
D) 250 
A) -100 
B) 0 
C) 150 
D) 250

Question 14

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following describes the national security argument for protectionism?

Accepted Answer

A) Nearly all industries can make some claim to strategic importance so such trade restrictions can get out of hand. 
B) Increases in economic surplus outweigh the decreases in consumer surplus that result from protectionism. 
C) Some goods should be insulated from foreign competition to ensure an adequate supply of these goods in the event of an international conflict. 
D) Private companies (for example, Coca-Cola)should not be forced to reveal their trade secrets to foreign companies. 
A) Nearly all industries can make some claim to strategic importance so such trade restrictions can get out of hand. 
B) Increases in economic surplus outweigh the decreases in consumer surplus that result from protectionism. 
C) Some goods should be insulated from foreign competition to ensure an adequate supply of these goods in the event of an international conflict. 
D) Private companies (for example, Coca-Cola)should not be forced to reveal their trade secrets to foreign companies.

Question 16

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.Which country has a comparative advantage in producing belts?

Accepted Answer

A) Estonia 
B) Morocco 
C) both countries 
D) neither country 
A) Estonia 
B) Morocco 
C) both countries 
D) neither country

Question 17

If Finland has an absolute advantage in the production of two goods compared to Latvia,Finland can still benefit from trade with Latvia.

Accepted Answer

A) True 
 B)False

Question 18

The process of countries becoming more open to foreign trade and investment is known as

Accepted Answer

A) autarky. 
B) foreign exchange. 
C) globalization. 
D) protectionism. 
A) autarky. 
B) foreign exchange. 
C) globalization. 
D) protectionism.

Question 19

Table 19-11
Production and
Consumption Production
Without Trade With Trade
 $$\begin{array} { | l | l | l | l | l | l | } 
\hline & \text { Clucks } & \text { Huts } & & \text { Clocks } & \text { Hats } \
\hline \text { Derrnark } & 900 & 150 && 1,200 & 0 \
\hline \text { Belize } & 150 & 100 && 0 & 400 \
\hline
\end{array}$$ 
Denmark and Belize can produce both clocks and hats.Table 19-11 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-11.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Denmark consume?

Accepted Answer

A) 270 
B) 900 
C) 930 
D) 1,200 
A) 270 
B) 900 
C) 930 
D) 1,200

Question 20

A decrease in the demand for American-made goods will

Accepted Answer

A) increase the supply of dollars in the foreign exchange market. 
B) decrease the supply of dollars in the foreign exchange market. 
C) increase the demand for dollars in the foreign exchange market. 
D) decrease the demand for dollars in the foreign exchange market. 
A) increase the supply of dollars in the foreign exchange market. 
B) decrease the supply of dollars in the foreign exchange market. 
C) increase the demand for dollars in the foreign exchange market. 
D) decrease the demand for dollars in the foreign exchange market.

A tariff is a tax imposed by a government on its own exports.

Table 19-1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business.Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

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.With the tariff in place,the United States produces

If a country has a ________ exchange rate,its central bank must buy and sell its holdings of currencies to maintain a given exchange rate.

A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country.

A rise in the dollar price of the Chinese yuan signals an appreciation of the yuan and a depreciation of the dollar.

Which of the following statements is true?

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.The tariff causes domestic consumption of coffee

Which of the following is an example of a trade restriction?

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Which of the following describes the national security argument for protectionism?

If Finland has an absolute advantage in the production of two goods compared to Latvia,Finland can still benefit from trade with Latvia.

The process of countries becoming more open to foreign trade and investment is known as

A decrease in the demand for American-made goods will

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

A tariff is a tax imposed by a government on its own exports.

Table 19-1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business.Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

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.With the tariff in place,the United States produces

If a country has a ________ exchange rate,its central bank must buy and sell its holdings of currencies to maintain a given exchange rate.

A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country.

A rise in the dollar price of the Chinese yuan signals an appreciation of the yuan and a depreciation of the dollar.

Which of the following statements is true?

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.The tariff causes domestic consumption of coffee

Which of the following is an example of a trade restriction?

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Which of the following describes the national security argument for protectionism?

If Finland has an absolute advantage in the production of two goods compared to Latvia,Finland can still benefit from trade with Latvia.

The process of countries becoming more open to foreign trade and investment is known as

A decrease in the demand for American-made goods will

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