Question 1

According to William Safire, "helpfulism" is basically protectionism.

Accepted Answer

A) True 
 B)False

Question 2

Figure 22-9
  
-In Figure 22-9, at price OC total quantity demanded exceeds quantity supplied and price will rise to

Accepted Answer

A) OJ in Pastaland. 
B) OA in Pestoland. 
C) OA in both countries. 
D) OJ in both countries. 
A) OJ in Pastaland. 
B) OA in Pestoland. 
C) OA in both countries. 
D) OJ in both countries.

Question 3

A tariff is a tax on imports imposed by the country that is importing the goods.

Accepted Answer

A) True 
 B)False

Question 4

Many fear that cheap foreign labor will destroy American jobs; in reality, wages in

Accepted Answer

A) the United States have risen spectacularly in the last 33 years as trade grew. 
B) countries that export to the United States are very low relative to the United States and show no sign of rising. 
C) countries that export to the United States have risen spectacularly in the last 33 years. 
D) United States export industries are very low relative to wages in the same industry in other countries. 
E) All of the above are correct. 
A) the United States have risen spectacularly in the last 33 years as trade grew. 
B) countries that export to the United States are very low relative to the United States and show no sign of rising. 
C) countries that export to the United States have risen spectacularly in the last 33 years. 
D) United States export industries are very low relative to wages in the same industry in other countries. 
E) All of the above are correct.

Question 5

Figure 22-5
  
-From the graph in Figure 22-5 (curves show output per unit of labor input), one can infer that

Accepted Answer

A) Japan has an absolute advantage in TVs and computers, but a comparative advantage only in TVs. 
B) Japan has only a comparative advantage in TVs. 
C) Japan has an absolute advantage in both TVs and computers, but a comparative advantage only in computers. 
D) China has a comparative advantage in computers. 
A) Japan has an absolute advantage in TVs and computers, but a comparative advantage only in TVs. 
B) Japan has only a comparative advantage in TVs. 
C) Japan has an absolute advantage in both TVs and computers, but a comparative advantage only in computers. 
D) China has a comparative advantage in computers.

Question 6

What matters most in determining efficient distribution of production over the world is

Accepted Answer

A) absolute advantage. 
B) efficiency. 
C) the stock of resources. 
D) comparative advantage. 
A) absolute advantage. 
B) efficiency. 
C) the stock of resources. 
D) comparative advantage.

Question 7

Figure 22-9
  
-In Figure 22-9, hostilities break out between Pastaland and Pestoland after Pestoland violates the Treaty of Basil.Consequently, trade stops and the price of pasta

Accepted Answer

A) rises to OJ in both countries. 
B) falls to OC in both countries. 
C) falls to OC in Pastaland and rises to OJ in Pestoland. 
D) rises to OJ in Pastaland and falls to OC in Pestoland. 
A) rises to OJ in both countries. 
B) falls to OC in both countries. 
C) falls to OC in Pastaland and rises to OJ in Pestoland. 
D) rises to OJ in Pastaland and falls to OC in Pestoland.

Question 8

Nothing raises the standard of living more than a greater

Accepted Answer

A) abundance of goods. 
B) effort of production. 
C) population. 
D) number of import tariffs. 
E) All of the above are true. 
A) abundance of goods. 
B) effort of production. 
C) population. 
D) number of import tariffs. 
E) All of the above are true.

Question 9

Why does equilibrium in the market for a traded good not occur where that country's quantity demanded equals quantity supplied?

Accepted Answer

A) Because equilibrium occurs where demand equals supply. 
B) Because markets are never in equilibrium. 
C) Because some of the good is imported or exported. 
D) Because there are several demand curves, and the market can't choose between them. 
E) All of the above are correct. 
A) Because equilibrium occurs where demand equals supply. 
B) Because markets are never in equilibrium. 
C) Because some of the good is imported or exported. 
D) Because there are several demand curves, and the market can't choose between them. 
E) All of the above are correct.

Question 10

One reason why nations trade is because

Accepted Answer

A) trading provides opportunities to earn profits. 
B) the rate of interest is not the same in all countries. 
C) resources are not equally distributed to all nations. 
D) some nations like to build one thing while others like to build another. 
A) trading provides opportunities to earn profits. 
B) the rate of interest is not the same in all countries. 
C) resources are not equally distributed to all nations. 
D) some nations like to build one thing while others like to build another.

Question 11

Suppose that a quota is imposed on imports of minivans.Show graphically what the effect is in terms of price and quantity of imports.Be sure that your graph is completely and correctly labeled.What determines how much of the quota is paid by the buyers of the minivans?

Accepted Answer

Figure 22-13
 @#IMG-DLM& 
See Figure 22-13.The quo

Question 12

Capital, labor, and other factors of production move more freely from country to country than they do within a country.

Accepted Answer

A) True 
 B)False

Question 13

If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to

Accepted Answer

A) raise the price and reduce the quantity of imports. 
B) raise the price and the quantity of imports. 
C) lower the price and the quantity of imports. 
D) raise the quantity and reduce the price of imports. 
A) raise the price and reduce the quantity of imports. 
B) raise the price and the quantity of imports. 
C) lower the price and the quantity of imports. 
D) raise the quantity and reduce the price of imports.

Question 14

Are there impediments to international movement of labor and capital?

Accepted Answer

A) Yes, but they apply to labor only, capital mobility is almost completely free. 
B) Yes, although these apply to capital, and not to labor. 
C) Yes, there are significant (often prohibitive) restrictions on labor and capital mobility. 
D) No, these have been removed with the passage of recent trade legislation. 
A) Yes, but they apply to labor only, capital mobility is almost completely free. 
B) Yes, although these apply to capital, and not to labor. 
C) Yes, there are significant (often prohibitive) restrictions on labor and capital mobility. 
D) No, these have been removed with the passage of recent trade legislation.

Question 15

Quotas increase the profits of importers but decrease the profits of exporters.

Accepted Answer

A) True 
 B)False

Question 16

Quotas and tariffs provide the same outcome: restriction of international trade and higher prices for consumers.

Accepted Answer

A) True 
 B)False

Question 17

The essential logic behind international trade is not different from that underlying trade among different states.Why, then, do we study international trade as a special subject?

Accepted Answer

There are

Question 18

Suppose the South had won the Civil War, and trade no longer took place between Northern and Southern states.Explain whether the sum of the North and South GDPs would have been higher or lower than with the current United States.

Accepted Answer

North and South added together would hav

Question 19

One country has an absolute advantage over another country if it can produce a good using smaller quantities of resources.

Accepted Answer

A) True 
 B)False

Question 20

A nation can gain from imposing a tariff on imports if it forces exporting countries

Accepted Answer

A) to raise their prices to pay the tariff. 
B) to lower their prices to avoid stocks of unsold goods. 
C) to produce at diseconomies of scale. 
D) to accept some imports from the tariff-imposing nation. 
A) to raise their prices to pay the tariff. 
B) to lower their prices to avoid stocks of unsold goods. 
C) to produce at diseconomies of scale. 
D) to accept some imports from the tariff-imposing nation.

Exam 35: International Trade and Comparative Advantage

According to William Safire, "helpfulism" is basically protectionism.

Figure 22-9 -In Figure 22-9, at price OC total quantity demanded exceeds quantity supplied and price will rise to

A tariff is a tax on imports imposed by the country that is importing the goods.

Many fear that cheap foreign labor will destroy American jobs; in reality, wages in

Figure 22-5 -From the graph in Figure 22-5 (curves show output per unit of labor input), one can infer that

What matters most in determining efficient distribution of production over the world is

Figure 22-9 -In Figure 22-9, hostilities break out between Pastaland and Pestoland after Pestoland violates the Treaty of Basil.Consequently, trade stops and the price of pasta

Nothing raises the standard of living more than a greater

Why does equilibrium in the market for a traded good not occur where that country's quantity demanded equals quantity supplied?

One reason why nations trade is because

Suppose that a quota is imposed on imports of minivans.Show graphically what the effect is in terms of price and quantity of imports.Be sure that your graph is completely and correctly labeled.What determines how much of the quota is paid by the buyers of the minivans?

Capital, labor, and other factors of production move more freely from country to country than they do within a country.

If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to

Are there impediments to international movement of labor and capital?

Quotas increase the profits of importers but decrease the profits of exporters.

Quotas and tariffs provide the same outcome: restriction of international trade and higher prices for consumers.

The essential logic behind international trade is not different from that underlying trade among different states.Why, then, do we study international trade as a special subject?

Suppose the South had won the Civil War, and trade no longer took place between Northern and Southern states.Explain whether the sum of the North and South GDPs would have been higher or lower than with the current United States.

One country has an absolute advantage over another country if it can produce a good using smaller quantities of resources.

A nation can gain from imposing a tariff on imports if it forces exporting countries

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

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