Question 1

What is the national security argument to support protection from international trade?

Accepted Answer

A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability. 
A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability.

Question 2

As a result of U.S.tariffs on fishnets produced in other nations, the quantity of fishnets purchased in the United States has

Accepted Answer

A)  not been affected. 
B)  increased. 
C)  decreased but not to zero. 
D)  fallen to zero. 
E)  probably changed but whether it has increased or decreased is ambiguous. 
A)  not been affected. 
B)  increased. 
C)  decreased but not to zero. 
D)  fallen to zero. 
E)  probably changed but whether it has increased or decreased is ambiguous.

Question 3

The difference between a tariff and a quota is that the tariff revenue goes to the

Accepted Answer

A)  domestic consumer. 
B)  domestic producer. 
C)  domestic government. 
D)  holder of the quota license. 
E)  foreign government. 
A)  domestic consumer. 
B)  domestic producer. 
C)  domestic government. 
D)  holder of the quota license. 
E)  foreign government.

Question 4

Which of the following is true?
i.Compared to a no-trade situation, exports make consumers better off.
ii.Tariffs make consumers worse off.
iii.Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

Accepted Answer

A)  Only i 
B)  Only ii 
C)  Only iii 
D)  i and iii 
E)  ii and iii 
A)  Only i 
B)  Only ii 
C)  Only iii 
D)  i and iii 
E)  ii and iii

Question 5

International trade benefits

Accepted Answer

A)  only the exporter. 
B)  only the importer. 
C)  both the exporter and the importer. 
D)  neither the exporter nor the importer. 
E)  the exporter at all times and sometimes also the importer. 
A)  only the exporter. 
B)  only the importer. 
C)  both the exporter and the importer. 
D)  neither the exporter nor the importer. 
E)  the exporter at all times and sometimes also the importer.

Question 6

A nation will export a good if its

Accepted Answer

A)  no-trade, domestic price is equal to the world price. 
B)  no-trade, domestic price is less than the world price 
C)  no-trade, domestic price is greater than the world price. 
D)  no-trade, domestic quantity is less than the world quantity. 
E)  no-trade, domestic quantity is greater than the world quantity. 
A)  no-trade, domestic price is equal to the world price. 
B)  no-trade, domestic price is less than the world price 
C)  no-trade, domestic price is greater than the world price. 
D)  no-trade, domestic quantity is less than the world quantity. 
E)  no-trade, domestic quantity is greater than the world quantity.

Question 7

What is the dumping argument for protection from international trade?

Accepted Answer

A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability. 
A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability.

Question 8

As a result of importing a good, domestic consumers ________ the quantity consumed and the price of the good ________.

Accepted Answer

A)  increase; rises 
B)  increase; falls 
C)  decrease; rises 
D)  decrease; falls 
E)  increase; does not change 
A)  increase; rises 
B)  increase; falls 
C)  decrease; rises 
D)  decrease; falls 
E)  increase; does not change

Question 9

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, cherry farmers would receive ________ per pound of cherries.

Accepted Answer

A)  $0.50 
B)  $1.50 
C)  $2.50 
D)  $2.00 
E)  $1.00 
A)  $0.50 
B)  $1.50 
C)  $2.50 
D)  $2.00 
E)  $1.00

Question 10

Which of the following methods of restricting trade does NOT create a deadweight loss?

Accepted Answer

A)  a tariff 
B)  a quota 
C)  a voluntary export restraint 
D)  Both answers A and B are correct. 
E)  None of the above answers are correct because all the methods create a deadweight loss 
A)  a tariff 
B)  a quota 
C)  a voluntary export restraint 
D)  Both answers A and B are correct. 
E)  None of the above answers are correct because all the methods create a deadweight loss

Question 11

Why do governments in less-developed nations impose tariffs?

Accepted Answer

A)  The government gains revenue from the tariff. 
B)  The government's low-paid workers are protected from high-paid foreign workers. 
C)  The nation's total income will be increased. 
D)  The national security of the country definitely is improved. 
E)  The government diversify its economy. 
A)  The government gains revenue from the tariff. 
B)  The government's low-paid workers are protected from high-paid foreign workers. 
C)  The nation's total income will be increased. 
D)  The national security of the country definitely is improved. 
E)  The government diversify its economy.

Question 12

Comparing developed and developing nations in their use of tariffs, we see that

Accepted Answer

A)  the developing nations' governments get very little revenue from tariffs. 
B)  both governments get large amounts of revenue from tariffs. 
C)  many developing nations' governments get a large portion of their revenue from tariffs. 
D)  developing nations almost never impose tariffs because they want their people to obtain goods and services at the lowest possible price. 
E)  developed nations rely much more than developing nations on tariff revenue. 
A)  the developing nations' governments get very little revenue from tariffs. 
B)  both governments get large amounts of revenue from tariffs. 
C)  many developing nations' governments get a large portion of their revenue from tariffs. 
D)  developing nations almost never impose tariffs because they want their people to obtain goods and services at the lowest possible price. 
E)  developed nations rely much more than developing nations on tariff revenue.

Question 13

-The figure above shows the U.S.demand and U.S.supply curves for cherries.Suppose the world price of cherries is $2 per pound.At this price, U.S.consumption of cherries will equal

Accepted Answer

A)  200,000 pounds. 
B)  400,000 pounds. 
C)  600,000 pounds. 
D)  800,000 pounds. 
E)  0 pounds. 
A)  200,000 pounds. 
B)  400,000 pounds. 
C)  600,000 pounds. 
D)  800,000 pounds. 
E)  0 pounds.

Question 14

A tariff is

Accepted Answer

A)  the domestic price charged by an exporting firm. 
B)  a tax on an imported good imposed by the importing country. 
C)  a licensing regulation that limits imports. 
D)  price dumping by a firm engaging in international trade. 
E)  the world price of a good or service. 
A)  the domestic price charged by an exporting firm. 
B)  a tax on an imported good imposed by the importing country. 
C)  a licensing regulation that limits imports. 
D)  price dumping by a firm engaging in international trade. 
E)  the world price of a good or service.

Question 15

A few years ago, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil.Would it make sense for the United States to try to become totally self-reliant in the production of oil?
 Why or why not?

Accepted Answer

It would be foolish for the United State

Question 16

The fundamental force that generates international trade is

Accepted Answer

A)  the need for more goods and services. 
B)  absolute advantage. 
C)  the sea rule. 
D)  comparative advantage. 
E)  the existence of tariffs. 
A)  the need for more goods and services. 
B)  absolute advantage. 
C)  the sea rule. 
D)  comparative advantage. 
E)  the existence of tariffs.

Question 17

If the United States imposes a tariff on foreign chocolate, how are U.S.buyers of chocolate affected?

Accepted Answer

A)  The price they pay for chocolate rises. 
B)  Their demand for chocolate increases because the U.S.production chocolate increases. 
C)  The quantity they consume is unchanged. 
D)  The price they pay for chocolate falls but they consume less chocolate because less is imported. 
E)  The price they pay for chocolate falls and they consume more chocolate. 
A)  The price they pay for chocolate rises. 
B)  Their demand for chocolate increases because the U.S.production chocolate increases. 
C)  The quantity they consume is unchanged. 
D)  The price they pay for chocolate falls but they consume less chocolate because less is imported. 
E)  The price they pay for chocolate falls and they consume more chocolate.

Question 18

The infant-industry argument is used by those who assert they want to

Accepted Answer

A)  limit imports to protect new industries. 
B)  increase exports to encourage growth of new industries. 
C)  limit exports. 
D)  increase imports to earn money to support new industries. 
E)  encourage foreign firms to dump in the United States. 
A)  limit imports to protect new industries. 
B)  increase exports to encourage growth of new industries. 
C)  limit exports. 
D)  increase imports to earn money to support new industries. 
E)  encourage foreign firms to dump in the United States.

Question 19

Of the following, who gains with a quota?

Accepted Answer

A)  domestic buyers of the good or service 
B)  the importer of the good or service 
C)  the foreign exporter of the good or service 
D)  the government of the importing nation 
E)  the government of the exporting nation 
A)  domestic buyers of the good or service 
B)  the importer of the good or service 
C)  the foreign exporter of the good or service 
D)  the government of the importing nation 
E)  the government of the exporting nation

Question 20

Most t-shirts bought by Americans are made in Asia.As a result of free trade, the production of t-shirts in America has

Accepted Answer

A)  increased. 
B)  stayed the same. 
C)  decreased. 
D)  been taken over by the government. 
E)  might change, but more information about what else the United States imports is needed to determine if U.S.production increased, decreased, or did not change. 
A)  increased. 
B)  stayed the same. 
C)  decreased. 
D)  been taken over by the government. 
E)  might change, but more information about what else the United States imports is needed to determine if U.S.production increased, decreased, or did not change.

What is the national security argument to support protection from international trade?

As a result of U.S.tariffs on fishnets produced in other nations, the quantity of fishnets purchased in the United States has

The difference between a tariff and a quota is that the tariff revenue goes to the

Which of the following is true? i.Compared to a no-trade situation, exports make consumers better off. ii.Tariffs make consumers worse off. iii.Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

International trade benefits

A nation will export a good if its

What is the dumping argument for protection from international trade?

As a result of importing a good, domestic consumers the quantity consumed and the price of the good .

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, cherry farmers would receive ________ per pound of cherries.

Which of the following methods of restricting trade does NOT create a deadweight loss?

Why do governments in less-developed nations impose tariffs?

Comparing developed and developing nations in their use of tariffs, we see that

-The figure above shows the U.S.demand and U.S.supply curves for cherries.Suppose the world price of cherries is $2 per pound.At this price, U.S.consumption of cherries will equal

A tariff is

A few years ago, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil.Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

The fundamental force that generates international trade is

If the United States imposes a tariff on foreign chocolate, how are U.S.buyers of chocolate affected?

The infant-industry argument is used by those who assert they want to

Of the following, who gains with a quota?

Most t-shirts bought by Americans are made in Asia.As a result of free trade, the production of t-shirts in America has

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

What is the national security argument to support protection from international trade?

As a result of U.S.tariffs on fishnets produced in other nations, the quantity of fishnets purchased in the United States has

The difference between a tariff and a quota is that the tariff revenue goes to the

Which of the following is true? i.Compared to a no-trade situation, exports make consumers better off. ii.Tariffs make consumers worse off. iii.Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

International trade benefits

A nation will export a good if its

What is the dumping argument for protection from international trade?

As a result of importing a good, domestic consumers ________ the quantity consumed and the price of the good ________.

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, cherry farmers would receive ________ per pound of cherries.

Which of the following methods of restricting trade does NOT create a deadweight loss?

Why do governments in less-developed nations impose tariffs?

Comparing developed and developing nations in their use of tariffs, we see that

-The figure above shows the U.S.demand and U.S.supply curves for cherries.Suppose the world price of cherries is $2 per pound.At this price, U.S.consumption of cherries will equal

A tariff is

A few years ago, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil.Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

The fundamental force that generates international trade is

If the United States imposes a tariff on foreign chocolate, how are U.S.buyers of chocolate affected?

The infant-industry argument is used by those who assert they want to

Of the following, who gains with a quota?

Most t-shirts bought by Americans are made in Asia.As a result of free trade, the production of t-shirts in America has

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

As a result of importing a good, domestic consumers the quantity consumed and the price of the good .