Question 1

In industrial countries, there is more reliance on ________, as opposed to ________ for government revenue.

Accepted Answer

A) tariffs; tax collection 
B) import quotas; tariffs 
C) tariffs; import quotas 
D) import quotas; tax collection 
E) tax collection; tariffs 
A) tariffs; tax collection 
B) import quotas; tariffs 
C) tariffs; import quotas 
D) import quotas; tax collection 
E) tax collection; tariffs E

Question 2

The winners from a tariff on imports are

Accepted Answer

A) producers and government. 
B) producers only. 
C) consumers only. 
D) consumers, producers, and government. 
E) government only. 
A) producers and government. 
B) producers only. 
C) consumers only. 
D) consumers, producers, and government. 
E) government only. A

Question 3

Table 31.1.1
Glazeland's Doughnut Market
  
-Table 31.1.1 shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.60, then Glazeland will produce ________ doughnuts and will ________ doughnuts.

Accepted Answer

A) 2 million; import 3 million 
B) 4 million; import 1 million 
C) 4 million; export 1 million 
D) 5 million; import 3 million 
E) 5 million; export 3 million 
A) 2 million; import 3 million 
B) 4 million; import 1 million 
C) 4 million; export 1 million 
D) 5 million; import 3 million 
E) 5 million; export 3 million E

Question 4

Tariffs and import quotas differ in that

Accepted Answer

A) one is a form of trade restriction, while the other is not. 
B) one is a tax, while the other is a limit. 
C) one is imposed by the government, while the other is imposed by the private sector. 
D) one is legal, while the other is not. 
E) one increases imports, while the other decreases imports. 
A) one is a form of trade restriction, while the other is not. 
B) one is a tax, while the other is a limit. 
C) one is imposed by the government, while the other is imposed by the private sector. 
D) one is legal, while the other is not. 
E) one increases imports, while the other decreases imports.

Question 5

If a government imposes a quota on imports of a popular doll, the price of the doll in the country ________ and the quantity purchased in the country ________.

Accepted Answer

A) rises; increases 
B) rises; decreases 
C) falls; increases 
D) falls; decreases 
E) rises; does not change 
A) rises; increases 
B) rises; decreases 
C) falls; increases 
D) falls; decreases 
E) rises; does not change

Question 6

Table 31.1.3
  
-Refer to Table 31.1.3. The table shows a country's demand and supply schedules. At what world price would the country export?

Accepted Answer

A) at only $8 a unit 
B) any price below $8 
C) a price of $6 a unit 
D) a price of $4 a unit 
E) any price above $8 a unit 
A) at only $8 a unit 
B) any price below $8 
C) a price of $6 a unit 
D) a price of $4 a unit 
E) any price above $8 a unit

Question 7

If Canada imposes a tariff on imported steel, the tariff

Accepted Answer

A) raises the Canadian price of imported steel. 
B) decreases the Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) all of the above 
A) raises the Canadian price of imported steel. 
B) decreases the Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) all of the above

Question 8

Import quotas ________ the price of imported goods and ________ the quantity consumed in the country imposing the quota.

Accepted Answer

A) raise; increase 
B) raise; decrease 
C) lower; increase 
D) lower; decrease 
E) raise; do not change 
A) raise; increase 
B) raise; decrease 
C) lower; increase 
D) lower; decrease 
E) raise; do not change

Question 9

Dumping occurs when a foreign firm

Accepted Answer

A) pollutes international waters. 
B) disposes of waste material internationally. 
C) sells inferior output to foreigners. 
D) sells its exports at a lower price than its cost of production. 
E) sells its output at a lower price in a foreign country than in the country where it produces the good. 
A) pollutes international waters. 
B) disposes of waste material internationally. 
C) sells inferior output to foreigners. 
D) sells its exports at a lower price than its cost of production. 
E) sells its output at a lower price in a foreign country than in the country where it produces the good.

Question 10

Table 31.1.2
  
-Refer to Table 31.1.2. The table shows a country's demand and supply schedules. At what world price would the country import?

Accepted Answer

A) at exactly $8 a unit 
B) any price above $8 a unit 
C) a price of $10 a unit 
D) a price of $20 a unit 
E) a price below $8 a unit 
A) at exactly $8 a unit 
B) any price above $8 a unit 
C) a price of $10 a unit 
D) a price of $20 a unit 
E) a price below $8 a unit

Question 11

The effects of offshoring from opening up call centres in India are similar to the effects from

Accepted Answer

A) free trade. 
B) tariffs. 
C) import quota. 
D) voluntary export restraints. 
E) export subsidies. 
A) free trade. 
B) tariffs. 
C) import quota. 
D) voluntary export restraints. 
E) export subsidies.

Question 12

International trade benefits the

Accepted Answer

A) exporting country but not the importing country. 
B) importing country but not the exporting country. 
C) government of the importing country. 
D) government of the exporting country. 
E) exporting country and the importing country. 
A) exporting country but not the importing country. 
B) importing country but not the exporting country. 
C) government of the importing country. 
D) government of the exporting country. 
E) exporting country and the importing country.

Question 13

Which of the following is a Canadian service export?

Accepted Answer

A) A Canadian buys dinner while travelling in Switzerland. 
B) A Swiss buys dinner while travelling in Canada. 
C) A Canadian buys a clock made in Switzerland. 
D) A Swiss buys a computer made in Canada. 
E) A Canadian buys a Canadian computer in Switzerland. 
A) A Canadian buys dinner while travelling in Switzerland. 
B) A Swiss buys dinner while travelling in Canada. 
C) A Canadian buys a clock made in Switzerland. 
D) A Swiss buys a computer made in Canada. 
E) A Canadian buys a Canadian computer in Switzerland.

Question 14

Refer to the figure below to answer the following questions.
   
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 31.3.1
-Refer to Figure 31.3.1. The Canadian government's revenue from the tariff is

Accepted Answer

A) $64 million. 
B) $32 million. 
C) $128 million. 
D) $48 million. 
E) $480 million. 
A) $64 million. 
B) $32 million. 
C) $128 million. 
D) $48 million. 
E) $480 million.

Question 15

Refer to the figure below to answer the following questions.
   
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 31.3.1
-Refer to Figure 31.3.1. With the tariff, Canadians buy ________ million shirts per year.

Accepted Answer

A) 48 
B) 32 
C) 16 
D) 24 
E) 40 
A) 48 
B) 32 
C) 16 
D) 24 
E) 40

Question 16

A country opens up to trade. In an import industry,

Accepted Answer

A) domestic producers lose and domestic consumers gain. 
B) domestic consumers lose and domestic producers gain. 
C) the government loses and domestic consumers gain. 
D) domestic producers lose and the government gains. 
E) none of the above 
A) domestic producers lose and domestic consumers gain. 
B) domestic consumers lose and domestic producers gain. 
C) the government loses and domestic consumers gain. 
D) domestic producers lose and the government gains. 
E) none of the above

Question 17

Among the following, the domestic government gains the most revenue when it

Accepted Answer

A) imposes an import quota. 
B) eliminates an import quota. 
C) encourages freer trade. 
D) imposes a tariff. 
E) increases the demand for a domestically-produced good. 
A) imposes an import quota. 
B) eliminates an import quota. 
C) encourages freer trade. 
D) imposes a tariff. 
E) increases the demand for a domestically-produced good.

Question 18

Prior to international trade, if the price of good X is lower in country A than in country B,

Accepted Answer

A) country B has an absolute advantage in the production of good X. 
B) country B has a comparative advantage in the production of good X. 
C) country A has an absolute advantage in the production of good X. 
D) country A has a comparative advantage in the production of good X. 
E) country B should stop producing good A. 
A) country B has an absolute advantage in the production of good X. 
B) country B has a comparative advantage in the production of good X. 
C) country A has an absolute advantage in the production of good X. 
D) country A has a comparative advantage in the production of good X. 
E) country B should stop producing good A.

Question 19

The proposition that protection is necessary to allow an infant industry to grow into a mature industry so that it can compete in world markets is the

Accepted Answer

A) infant-maturity argument. 
B) infant-industry argument. 
C) new industry proposition. 
D) growth proposition. 
E) dynamic comparative advantage argument. 
A) infant-maturity argument. 
B) infant-industry argument. 
C) new industry proposition. 
D) growth proposition. 
E) dynamic comparative advantage argument.

Question 20

Table 31.1.1
Glazeland's Doughnut Market
  
-Canada produces both lumber and wine. Canada exports lumber and imports wine. The rest of the world imports Canadian lumber and exports wine to Canada. If Canada did not trade with the rest of the world, then the equilibrium price of lumber would be ________ in Canada than the rest of the world, and the equilibrium price of wine would be ________ in Canada than the rest of the world.

Accepted Answer

A) lower; higher 
B) higher; lower 
C) higher; higher 
D) lower; lower 
E) the same or lower; the same or higher 
A) lower; higher 
B) higher; lower 
C) higher; higher 
D) lower; lower 
E) the same or lower; the same or higher

Exam 31: Macro Only: International Trade Policy

In industrial countries, there is more reliance on ________, as opposed to ________ for government revenue.

The winners from a tariff on imports are

Table 31.1.1 Glazeland's Doughnut Market -Table 31.1.1 shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.60, then Glazeland will produce ________ doughnuts and will ________ doughnuts.

Tariffs and import quotas differ in that

If a government imposes a quota on imports of a popular doll, the price of the doll in the country ________ and the quantity purchased in the country ________.

Table 31.1.3 -Refer to Table 31.1.3. The table shows a country's demand and supply schedules. At what world price would the country export?

If Canada imposes a tariff on imported steel, the tariff

Import quotas ________ the price of imported goods and ________ the quantity consumed in the country imposing the quota.

Dumping occurs when a foreign firm

Table 31.1.2 -Refer to Table 31.1.2. The table shows a country's demand and supply schedules. At what world price would the country import?

The effects of offshoring from opening up call centres in India are similar to the effects from

International trade benefits the

Which of the following is a Canadian service export?

A country opens up to trade. In an import industry,

Among the following, the domestic government gains the most revenue when it

Prior to international trade, if the price of good X is lower in country A than in country B,

The proposition that protection is necessary to allow an infant industry to grow into a mature industry so that it can compete in world markets is the

What Is Economics

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Demand and Supply

Elasticity

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Governments Actions in Markets

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The Business Cycle, Inflation, and Deflation

Fiscal Policy

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Filters

In industrial countries, there is more reliance on , as opposed to for government revenue.

Table 31.1.1 Glazeland's Doughnut Market -Table 31.1.1 shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.60, then Glazeland will produce doughnuts and will doughnuts.

If a government imposes a quota on imports of a popular doll, the price of the doll in the country and the quantity purchased in the country .

Import quotas the price of imported goods and the quantity consumed in the country imposing the quota.