Question 1

Which of the following is not a source of comparative advantage?

Accepted Answer

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

Question 2

Figure 9-3
   
Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.With a quota in place, what is the quantity consumed in the domestic market?

Accepted Answer

A) 10 million pounds 
B) 28 million pounds 
C) 34 million pounds 
D) 40 million pounds 
A) 10 million pounds 
B) 28 million pounds 
C) 34 million pounds 
D) 40 million pounds

Question 3

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 4

Figure 9-2
   
Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.Without the tariff in place, the United States produces

Accepted Answer

A) 9 million pounds of rice. 
B) 15 million pounds of rice. 
C) 31 million pounds of rice. 
D) 42 million pounds of rice. 
A) 9 million pounds of rice. 
B) 15 million pounds of rice. 
C) 31 million pounds of rice. 
D) 42 million pounds of rice.

Question 5

What is dumping? Who benefits and who loses from dumping?

Accepted Answer

Dumping refers to selling a product for

Question 6

Figure 9-2
   
Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.The tariff revenue collected by the government equals the area

Accepted Answer

A) D + E + F. 
B) E. 
C) B + D + E + F. 
D) C + D + E + F. 
A) D + E + F. 
B) E. 
C) B + D + E + F. 
D) C + D + E + F.

Question 7

Table 9-4
Output Per Hour of Work
   
Table 9-4 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand.
-Refer to Table 9-4.
a.Which country has an absolute advantage in the production of handbags and jackets?
b.Which country has a comparative advantage in the production of handbags?
c.Which country has a comparative advantage in the production of jackets?

Accepted Answer

a.Thailand has an absolute advantage in

Question 8

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   
Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.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 9

Which of the following is not an example of a trade restriction?

Accepted Answer

A) tariffs 
B) quotas and voluntary export restraints 
C) legislation requiring that cars sold in a country have a 50 percent domestic content 
D) consumer preferences for goods produced domestically 
A) tariffs 
B) quotas and voluntary export restraints 
C) legislation requiring that cars sold in a country have a 50 percent domestic content 
D) consumer preferences for goods produced domestically

Question 10

If a country has an absolute advantage in producing a product, it must also have a comparative advantage in producing that product.

Accepted Answer

A) True 
 B)False

Question 11

Table 9-2
   
Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Sarita has a comparative advantage in baking pies. 
B) Gabriel has a comparative advantage in baking cakes. 
C) Sarita has a comparative advantage in baking pies and baking cakes. 
D) Sarita has a comparative advantage in baking cakes. 
A) Sarita has a comparative advantage in baking pies. 
B) Gabriel has a comparative advantage in baking cakes. 
C) Sarita has a comparative advantage in baking pies and baking cakes. 
D) Sarita has a comparative advantage in baking cakes.

Question 12

A tariff is a tax imposed by a government on

Accepted Answer

A) exports. 
B) services. 
C) imports. 
D) luxury items. 
A) exports. 
B) services. 
C) imports. 
D) luxury items.

Question 13

Figure 9-2
   
Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.The tariff causes domestic consumption of rice

Accepted Answer

A) to fall by 27 million pounds. 
B) to fall by 11 million pounds. 
C) to rise by 6 million pounds. 
D) to rise by 16 million pounds. 
A) to fall by 27 million pounds. 
B) to fall by 11 million pounds. 
C) to rise by 6 million pounds. 
D) to rise by 16 million pounds.

Question 14

Figure 9-1
   
Figure 9-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 9-1.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 15

Which of the following statements is true?

Accepted Answer

A) Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B) Each year China exports about 50 percent of its wheat crop and 40 percent of its rice crop. 
C) Most of the leading exporting countries are large, high-income countries. 
D) All sectors of the U.S. economy are affected equally by international trade. 
A) Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B) Each year China exports about 50 percent of its wheat crop and 40 percent of its rice crop. 
C) Most of the leading exporting countries are large, high-income countries. 
D) All sectors of the U.S. economy are affected equally by international trade.

Question 16

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   
Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.All of the following are terms of trade that could possibly benefit both countries except

Accepted Answer

A) 1/5 of a hat : 1 clock 
B) 1/3 of a hat : 1 clock 
C) 1/2 of a hat : 1 clock 
D) 3/4 of a hat : 1 clock 
A) 1/5 of a hat : 1 clock 
B) 1/3 of a hat : 1 clock 
C) 1/2 of a hat : 1 clock 
D) 3/4 of a hat : 1 clock

Question 17

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

Accepted Answer

A) each country would be better off from trade if it had an absolute advantage in producing one of the goods. 
B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage. 
C) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods. 
D) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods. 
A) each country would be better off from trade if it had an absolute advantage in producing one of the goods. 
B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage. 
C) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods. 
D) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods.

Question 18

If a country has a comparative advantage in producing a product, it may or may not have an absolute advantage in producing that product.

Accepted Answer

A) True 
 B)False

Question 19

Table 9-2
   
Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Sarita has an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B) Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C) Sarita has an absolute advantage in baking pies and cakes. 
D) Gabriel has an absolute advantage in baking pies and cakes. 
A) Sarita has an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B) Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C) Sarita has an absolute advantage in baking pies and cakes. 
D) Gabriel has an absolute advantage in baking pies and cakes.

Question 20

Figure 9-1
   
Figure 9-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity of imports?

Accepted Answer

A) 5 units 
B) 10 units 
C) 15 units 
D) 20 units 
A) 5 units 
B) 10 units 
C) 15 units 
D) 20 units

Which of the following is not a source of comparative advantage?

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.With a quota in place, what is the quantity consumed in the domestic market?

A tariff is

Figure 9-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.Without the tariff in place, the United States produces

What is dumping? Who benefits and who loses from dumping?

Figure 9-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff revenue collected by the government equals the area

Which of the following is not an example of a trade restriction?

If a country has an absolute advantage in producing a product, it must also have a comparative advantage in producing that product.

Table 9-2 Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

A tariff is a tax imposed by a government on

Figure 9-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff causes domestic consumption of rice

Figure 9-1 Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky, the consumer surplus is

Which of the following statements is true?

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

If a country has a comparative advantage in producing a product, it may or may not have an absolute advantage in producing that product.

Table 9-2 Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Figure 9-1 Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity of imports?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters

Exam 9: Comparative Advantage and the Gains From International Trade

Which of the following is not a source of comparative advantage?

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.With a quota in place, what is the quantity consumed in the domestic market?

A tariff is

Figure 9-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.Without the tariff in place, the United States produces

What is dumping? Who benefits and who loses from dumping?

Figure 9-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff revenue collected by the government equals the area

Which of the following is not an example of a trade restriction?

If a country has an absolute advantage in producing a product, it must also have a comparative advantage in producing that product.

Table 9-2 Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

A tariff is a tax imposed by a government on

Figure 9-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff causes domestic consumption of rice

Figure 9-1 Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky, the consumer surplus is

Which of the following statements is true?

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

If a country has a comparative advantage in producing a product, it may or may not have an absolute advantage in producing that product.

Table 9-2 Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Figure 9-1 Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity of imports?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters