Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Figure 19-10
  
-Refer to Figure 19-10.The appreciation of the euro is represented as a movement from ________.

Accepted Answer

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

Question 3

If the demand for the yen increases relative to the dollar,which of the following would occur?

Accepted Answer

A) The dollar will appreciate. 
B) The yen will depreciate. 
C) The dollar will depreciate. 
D) The demand for the dollar will increase. 
A) The dollar will appreciate. 
B) The yen will depreciate. 
C) The dollar will depreciate. 
D) The demand for the dollar will increase.

Question 4

Disagreements about whether the U.S.government should regulate international trade

Accepted Answer

A) began during the Great Depression. 
B) began after World War I when government officials no longer believed in isolationism. 
C) date back to the beginning of the country. 
D) did not occur until the end of the Mexican War in 1848. 
A) began during the Great Depression. 
B) began after World War I when government officials no longer believed in isolationism. 
C) date back to the beginning of the country. 
D) did not occur until the end of the Mexican War in 1848.

Question 5

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to limit their exports to a country.What are these types of agreements called?

Accepted Answer

A) involuntary export restraints 
B) voluntary export restraints 
C) implicit quotas 
D) sanctions 
A) involuntary export restraints 
B) voluntary export restraints 
C) implicit quotas 
D) sanctions

Question 6

Which of the following statements is true?

Accepted Answer

A) All individuals in both countries are made better off as a result of international trade. 
B) Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall. 
C) Although some individuals are made better off as a result of international trade, both countries may be made worse off overall. 
D) Each country as a whole is made better off as a result of international trade, but individuals within each country may be made worse off. 
A) All individuals in both countries are made better off as a result of international trade. 
B) Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall. 
C) Although some individuals are made better off as a result of international trade, both countries may be made worse off overall. 
D) Each country as a whole is made better off as a result of international trade, but individuals within each country may be made worse off.

Question 7

Which of the following countries is not one of the top three exporting countries in the world?

Accepted Answer

A) China 
B) Germany 
C) South Korea 
D) the United States 
A) China 
B) Germany 
C) South Korea 
D) the United States

Question 8

Table 19-8
 $$\begin{array} { | l | c | c | } 
\hline & \text { Buws } & \text { Arrows } \
\hline \text { Ahrnet } & \mathbf { 2 0 } & \mathbf { 8 0 } \
\hline \text { MyLirih } & \mathbf { 2 5 } & 75 \
\hline
\end{array}$$ 
Table 19-8 shows the output per week for bows and arrows by Ahmet and MyLinh.
-Refer to Table 19-8.
a.Which person has an absolute advantage in the production of bows? arrows?
b.Which person has a comparative advantage in the production of bows?
c.Which person has a comparative advantage in the production of arrows?

Accepted Answer

a.MyLinh has an absolute advantage in th

Question 9

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

Accepted Answer

A) almost all jobs; economic growth 
B) well over half of the jobs; price decreases 
C) relatively few jobs; job losses 
D) no jobs; increased productivity 
A) almost all jobs; economic growth 
B) well over half of the jobs; price decreases 
C) relatively few jobs; job losses 
D) no jobs; increased productivity

Question 10

All of the following are sources of comparative advantage except

Accepted Answer

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

Question 11

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.Which country has a comparative advantage in producing clocks?

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country 
A) Denmark 
B) Belize 
C) both countries 
D) neither country

Question 12

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

Accepted Answer

A) a limit imposed by the U.S.government on the number of cell phones that the United States can import from Korea 
B) a subsidy granted by the U.S.government to domestic cell phone manufacturers so they can compete more effectively with foreign cell phone manufacturers 
C) a limit set by the Korean government on the number of cell phones that the United States can import fro Korea 
D) a $50 per-cell phone-fee imposed on all cell phones vehicles imported into the United States 
A) a limit imposed by the U.S.government on the number of cell phones that the United States can import from Korea 
B) a subsidy granted by the U.S.government to domestic cell phone manufacturers so they can compete more effectively with foreign cell phone manufacturers 
C) a limit set by the Korean government on the number of cell phones that the United States can import fro Korea 
D) a $50 per-cell phone-fee imposed on all cell phones vehicles imported into the United States

Question 13

Which of the following is common to both tariffs and quotas?

Accepted Answer

A) Tariffs and quotas are both used as a means to increase government revenue. 
B) Tariffs and quotas both increase economic efficiency. 
C) Tariffs and quotas are both designed to reduce foreign competition faced by domestic firms. 
D) Tariffs and quotas are both examples of voluntary export restraints. 
A) Tariffs and quotas are both used as a means to increase government revenue. 
B) Tariffs and quotas both increase economic efficiency. 
C) Tariffs and quotas are both designed to reduce foreign competition faced by domestic firms. 
D) Tariffs and quotas are both examples of voluntary export restraints.

Question 14

Free trade ________ living standards by ________ economic efficiency.

Accepted Answer

A) raises; increasing 
B) lowers; decreasing 
C) raises; equalizing 
D) lowers; eliminating 
A) raises; increasing 
B) lowers; decreasing 
C) raises; equalizing 
D) lowers; eliminating

Question 15

Figure 19-7
  
-Refer to Figure 19-7.Fenwick currently both produces and imports pistachios.The government of Fenwick decides to restrict international trade in pistachios by imposing a quota that allows imports of only 5 million pounds each year.Figure 19-7 shows the estimated demand and supply curves for pistachios in Fenwick and the results of imposing the quota.Answer questions a-j using the figure.
a.If there is no quota what is the domestic price of pistachios and what is the quantity of pistachios demanded by consumers?
b.If there is no quota how many pounds of pistachios would domestic producers supply and what quantity would be imported?
c.If there is no quota what is the dollar value of consumer surplus?
d.If there is no quota what is the dollar value of producer surplus received by producers in Fenwick?
e.If there is no quota what is the revenue received by foreign producers who supply pistachios to Fenwick?
f.With a quota in place what is the price that consumers of Fenwick must now pay and what is the quantity demanded?
g.With a quota in place what is the dollar value of consumer surplus? Are consumers better off?
h.With a quota in place what is the dollar value of producer surplus received by producers in Fenwick? Are domestic producers better off?
i.Calculate the revenue to foreign producers who are granted permission to sell in Fenwick after the imposition of the quota.
j.Calculate the deadweight loss as a result of the quota.

Accepted Answer

a. Price without a quota = $4 per pound;

Question 16

A tariff is

Accepted Answer

A) a limit placed on the quantity of goods that can be imported into a country. 
B) a tax imposed by a government on goods imported into a country. 
C) a subsidy granted to importers of a vital input. 
D) a health and safety restriction imposed on an imported product. 
A) a limit placed on the quantity of goods that can be imported into a country. 
B) a tax imposed by a government on goods imported into a country. 
C) a subsidy granted to importers of a vital input. 
D) a health and safety restriction imposed on an imported product.

Question 17

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 candles. 
B) Bryce has an absolute advantage in making soap. 
C) Bryce has a comparative advantage in making candles. 
D) Bryce has a comparative advantage in making candles and making soap. 
A) Tina has a comparative advantage in making candles. 
B) Bryce has an absolute advantage in making soap. 
C) Bryce has a comparative advantage in making candles. 
D) Bryce has a comparative advantage in making candles and making soap.

Question 18

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.Which country has an absolute advantage in producing hats?

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country 
A) Denmark 
B) Belize 
C) both countries 
D) neither country

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 belts will Morocco gain compared to the "without trade"numbers?

Accepted Answer

A) 10 
B) 20 
C) 70 
D) 80 
A) 10 
B) 20 
C) 70 
D) 80

Question 20

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 domestic producer surplus?

Accepted Answer

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

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

Figure 19-10 -Refer to Figure 19-10.The appreciation of the euro is represented as a movement from ________.

If the demand for the yen increases relative to the dollar,which of the following would occur?

Disagreements about whether the U.S.government should regulate international trade

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to limit their exports to a country.What are these types of agreements called?

Which of the following statements is true?

Which of the following countries is not one of the top three exporting countries in the world?

Trade restrictions tend to preserve in the protected industries and lead to in other industries.

All of the following are sources of comparative advantage except

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

Which of the following is common to both tariffs and quotas?

Free trade living standards by economic efficiency.

A tariff is

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 domestic producer surplus?

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

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

Figure 19-10 -Refer to Figure 19-10.The appreciation of the euro is represented as a movement from ________.

If the demand for the yen increases relative to the dollar,which of the following would occur?

Disagreements about whether the U.S.government should regulate international trade

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to limit their exports to a country.What are these types of agreements called?

Which of the following statements is true?

Which of the following countries is not one of the top three exporting countries in the world?

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

All of the following are sources of comparative advantage except

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

Which of the following is common to both tariffs and quotas?

Free trade ________ living standards by ________ economic efficiency.

A tariff is

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 domestic producer surplus?

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

Trade restrictions tend to preserve in the protected industries and lead to in other industries.

Free trade living standards by economic efficiency.