Question 1

If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry; which of the following is being used?

Accepted Answer

A)  Save domestic jobs argument. 
B)  National security argument. 
C)  Dumping argument. 
D)  Infant-industry argument. 
E)  Protecting national culture argument. 
A)  Save domestic jobs argument. 
B)  National security argument. 
C)  Dumping argument. 
D)  Infant-industry argument. 
E)  Protecting national culture argument.

Question 2

-The above figure shows the domestic supply of and domestic demand for an imported good.The world price is $15 per unit.
a. At the world price of $15 per unit, what is the domestic consumption and domestic production?
b. At the world price of $15 per unit, what is the quantity imported?
c. If the government imposes a tariff of $5 per unit, what is the domestic consumption and domestic production?
d. With the $5 per unit tariff, what is the quantity imported?
e. How much revenue does the government collect with a tariff of $5 per unit?

Accepted Answer

a. Domestic consumption is 8 million uni

Question 3

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded Quantity supplied } \
\text { (units per day) }
\end{array} & \begin{array} { c } 
\text { (units per day) }
\end{array} \
\hline 2 & 20 & 14 \
4 & 19 & 16 \
6 & 18 & 18 \
8 & 17 & 20 \
10 & 16 & 22 \
12 & 15 & 24
\end{array}$$
-The table above has the domestic demand and domestic supply schedules for a good.If the world price of the good is $10, then according to the table

Accepted Answer

A)  domestic production is higher before trade than after trade. 
B)  the country imports 16 units a day. 
C)  the country imports 6 units a day. 
D)  the country exports 6 units a day. 
E)  the country exports 22 units a day. 
A)  domestic production is higher before trade than after trade. 
B)  the country imports 16 units a day. 
C)  the country imports 6 units a day. 
D)  the country exports 6 units a day. 
E)  the country exports 22 units a day.

Question 4

A specified maximum amount of the good that may be imported in a given period of time is a

Accepted Answer

A)  forcible limit. 
B)  quota. 
C)  tariff. 
D)  sanction. 
E)  dumping limit. 
A)  forcible limit. 
B)  quota. 
C)  tariff. 
D)  sanction. 
E)  dumping limit.

Question 5

Who gains from international trade?

Accepted Answer

A)  only the exporting nation 
B)  only the importing nation 
C)  both the importing and the exporting nations 
D)  neither the importing nor the exporting nations 
E)  The gains depends on which nation gets to keep the total revenue from the sale 
A)  only the exporting nation 
B)  only the importing nation 
C)  both the importing and the exporting nations 
D)  neither the importing nor the exporting nations 
E)  The gains depends on which nation gets to keep the total revenue from the sale

Question 6

-The above figure shows the U.S.market for replacement cell phone batteries. Area E is the

Accepted Answer

A)  producer surplus when there is free trade. 
B)  deadweight loss from tariff. 
C)  tariff revenue. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff. 
A)  producer surplus when there is free trade. 
B)  deadweight loss from tariff. 
C)  tariff revenue. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff.

Question 7

A nation has a comparative advantage in a good when it has a

Accepted Answer

A)  lower absolute cost of producing the good. 
B)  higher opportunity cost of producing the good. 
C)  lower opportunity cost of producing the good. 
D)  higher absolute cost of producing the good. 
E)  tariff in place protecting the producers of the good. 
A)  lower absolute cost of producing the good. 
B)  higher opportunity cost of producing the good. 
C)  lower opportunity cost of producing the good. 
D)  higher absolute cost of producing the good. 
E)  tariff in place protecting the producers of the good.

Question 8

Suevania opens its doors to trade with Barvania.Barvania has a comparative advantage in the production of machinery.Hence, once trade occurs Suevania's consumers will buy ________ machinery and pay ________ before.

Accepted Answer

A)  more; a higher price than 
B)  more; a lower price than 
C)  less; a higher price than 
D)  less; a lower price than 
E)  the same amount of; the same price as 
A)  more; a higher price than 
B)  more; a lower price than 
C)  less; a higher price than 
D)  less; a lower price than 
E)  the same amount of; the same price as

Question 9

If the United States negotiates a voluntary export restraint with international sugar producing nations, then

Accepted Answer

A)  U.S.sugar buyers pay a lower price for sugar. 
B)  U.S.sugar producers produce a smaller quantity. 
C)  imports of sugar increase. 
D)  the U.S.government collects less revenue than if it imposed a tariff on sugar. 
E)  the foreign governments collect more revenue than if a tariff is imposed on sugar. 
A)  U.S.sugar buyers pay a lower price for sugar. 
B)  U.S.sugar producers produce a smaller quantity. 
C)  imports of sugar increase. 
D)  the U.S.government collects less revenue than if it imposed a tariff on sugar. 
E)  the foreign governments collect more revenue than if a tariff is imposed on sugar.

Question 10

Since the mid-1970s, the average U.S.tariff rate is

Accepted Answer

A)  less than 5 percent. 
B)  between 6 percent and 15 percent. 
C)  between 16 percent and 25 percent. 
D)  between 26 percent and 35 percent. 
E)  larger than 36 percent. 
A)  less than 5 percent. 
B)  between 6 percent and 15 percent. 
C)  between 16 percent and 25 percent. 
D)  between 26 percent and 35 percent. 
E)  larger than 36 percent.

Question 11

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per television set) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (millions of sets per year) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (millions of sets per year) }
\end{array} \
\hline 400 & 1 & 10 \
600 & 2 & 8 \
800 & 3 & 6 \
1,000 & 4 & 4 \
1,200 & 5 & 2 \
\hline
\end{array}$$
-The United States imports television sets from Japan.The table above contains the U.S.demand and U.S.supply schedules for television sets.The world price of a television set is $600 per set.
a. With no trade, what is the domestic price and quantity of television sets?
b. At the world price, what is the quantity of sets demanded in the United States?
c. At the world price, how many sets are produced in the United States?
d. At the world price, how many sets are imported into the United States?
e. What is the opportunity cost of producing the 4-millionth television set in the United States?
 In Japan?

Accepted Answer

a. In the absence of trade, the price is

Question 12

What is dumping?

Accepted Answer

Dumping is the situation in wh

Question 13

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per dose) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (thous ands of doses per day) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (thous ands of doses per day) }
\end{array} \
\hline 16 & 7 & 12 \
20 & 10 & 10 \
24 & 13 & 8 \
28 & 16 & 6 \
\hline
\end{array}$$
-Merck, an American pharmaceutical company, produces a vaccination that is used against chicken pox.The table shows the domestic demand for, and supply of, this medication, measured in thousands of doses per day.The world price of this medicine is $24 per dose.
a. With no trade, what is the U.S.price and quantity of the vaccine?
b. At the world price, how many doses are demanded in the United States?
c. At the world price, how many doses are produced in the United States?
d. At the world price, how many doses are exported?

Accepted Answer

a. With no trade, the U.S.price is $20 a

Question 14

-The above figure shows the U.S.market for wheat. With international trade, U.S.consumers buy ________ tons of wheat and U.S.producers produce ________ tons of wheat.

Accepted Answer

A)  700,000; 300,000 
B)  500,000; 500,000 
C)  300,000; 500,000 
D)  300,000; 700,000 
E)  500,000; 700,000 
A)  700,000; 300,000 
B)  500,000; 500,000 
C)  300,000; 500,000 
D)  300,000; 700,000 
E)  500,000; 700,000

Question 15

The country with a comparative advantage in the production of a good has a

Accepted Answer

A)  lower opportunity cost of production. 
B)  higher opportunity cost of production. 
C)  horizontal production possibilities frontier. 
D)  vertical production possibilities frontier. 
E)  linear production possibilities frontier. 
A)  lower opportunity cost of production. 
B)  higher opportunity cost of production. 
C)  horizontal production possibilities frontier. 
D)  vertical production possibilities frontier. 
E)  linear production possibilities frontier.

Question 16

Who gains from exports?
 How do they gain?
 Who loses?
 How do they lose?
 Does the overall economy gain or lose from exports?

Accepted Answer

Producers of the good being exported gai

Question 17

$\begin{array}{ccc}
\text { Price } & \begin{array}{c}
\text { Quantity s upplied } \
\text { (thous ands of } \
\text { pounds per year) }
\end{array} & \begin{array}{c}
\text { Quantity demanded } \
\text { (thous ands of } \
\text { pounds per year) }
\end{array} \
\hline 21 & 120 & 60 \
18 & 100 & 100 \
15 & 80 & 140 \
12 & 60 & 180 \
9 & 40 & 220
\end{array}$
-The United States imports cheese from a variety of countries.The table above gives the domestic supply of, and demand for, cheese in the United States.The world price of cheese is $12 per pound, and trade is unrestricted.
a. How many pounds of cheese are consumed in the United States?
b. How many pounds of cheese are produced in the United States?
c. How many pounds of cheese are imported into the United States?
If a $3 per pound tariff is imposed,
d. How many pounds of cheese are consumed in the United States?
e. How many pounds of cheese are produced in the United States?
f. How many pounds of cheese are imported into the United States?
g. How much will the U.S.government collect in tariff revenue?
h. Who benefits from the tariff?
 Who loses?

Accepted Answer

a. 180,000 pounds of cheese are consumed

Question 18

Who gains from imports?
 How do they gain?
 Who loses?
 How do they lose?
 Does the overall economy gain or lose from imports?

Accepted Answer

Consumers of the good being imported gai

If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry; which of the following is being used?

Price (dollars per unit) Quantity demanded Quantity supplied (units per day) (units per day) 2 20 14 4 19 16 6 18 18 8 17 20 10 16 22 12 15 24 -The table above has the domestic demand and domestic supply schedules for a good.If the world price of the good is $10, then according to the table

A specified maximum amount of the good that may be imported in a given period of time is a

Who gains from international trade?

-The above figure shows the U.S.market for replacement cell phone batteries. Area E is the

A nation has a comparative advantage in a good when it has a

Suevania opens its doors to trade with Barvania.Barvania has a comparative advantage in the production of machinery.Hence, once trade occurs Suevania's consumers will buy machinery and pay before.

If the United States negotiates a voluntary export restraint with international sugar producing nations, then

Since the mid-1970s, the average U.S.tariff rate is

What is dumping?

-The above figure shows the U.S.market for wheat. With international trade, U.S.consumers buy tons of wheat and U.S.producers produce tons of wheat.

The country with a comparative advantage in the production of a good has a

Who gains from exports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from exports?

Who gains from imports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from imports?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Finance

Filters

Exam 18: International Trade Policy

If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry; which of the following is being used?

Price (dollars per unit) Quantity demanded Quantity supplied (units per day) (units per day) 2 20 14 4 19 16 6 18 18 8 17 20 10 16 22 12 15 24 -The table above has the domestic demand and domestic supply schedules for a good.If the world price of the good is $10, then according to the table

A specified maximum amount of the good that may be imported in a given period of time is a

Who gains from international trade?

-The above figure shows the U.S.market for replacement cell phone batteries. Area E is the

A nation has a comparative advantage in a good when it has a

Suevania opens its doors to trade with Barvania.Barvania has a comparative advantage in the production of machinery.Hence, once trade occurs Suevania's consumers will buy ________ machinery and pay ________ before.

If the United States negotiates a voluntary export restraint with international sugar producing nations, then

Since the mid-1970s, the average U.S.tariff rate is

What is dumping?

-The above figure shows the U.S.market for wheat. With international trade, U.S.consumers buy ________ tons of wheat and U.S.producers produce ________ tons of wheat.

The country with a comparative advantage in the production of a good has a

Who gains from exports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from exports?

Who gains from imports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from imports?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Finance

Filters

Suevania opens its doors to trade with Barvania.Barvania has a comparative advantage in the production of machinery.Hence, once trade occurs Suevania's consumers will buy machinery and pay before.

-The above figure shows the U.S.market for wheat. With international trade, U.S.consumers buy tons of wheat and U.S.producers produce tons of wheat.