Question 1

The members of NAFTA are the United States,Canada,and

Accepted Answer

A)  France. 
B)  Japan. 
C)  Chile. 
D)  Mexico. 
A)  France. 
B)  Japan. 
C)  Chile. 
D)  Mexico.

Question 2

Suppose the United States imposes a ban on imported steel from China because the Chinese steel was made with factories that pollute the environment.If China complains to the WTO regarding the U.S.ban,the WTO will side with

Accepted Answer

A)  China, because the pollution in China does not harm the United States directly. 
B)  China, because the WTO is in favor of industries that generate pollution. 
C)  the United States, because a country can determine what goods can and cannot enter its borders. 
D)  the United States, because U.S. factories have to comply with U.S. environmental standards. 
A)  China, because the pollution in China does not harm the United States directly. 
B)  China, because the WTO is in favor of industries that generate pollution. 
C)  the United States, because a country can determine what goods can and cannot enter its borders. 
D)  the United States, because U.S. factories have to comply with U.S. environmental standards.

Question 3

Daily Output of Scotland and Poland
   
Table 18.1
-Refer to Table 18.1.If Scotland produces and consumes 5 accordions and 40 bagpipes while Poland produces and consumes 25 bagpipes and 100 accordions,then we say that Poland and Scotland are

Accepted Answer

A)  in autarky. 
B)  specializing and trading. 
C)  in limited trade. 
D)  fully utilizing the benefits of their comparative advantage. 
A)  in autarky. 
B)  specializing and trading. 
C)  in limited trade. 
D)  fully utilizing the benefits of their comparative advantage.

Question 4

Suppose that the United States has comparative advantage in the production of cars while Japan has comparative advantage in the production of TVs.Assume that both countries produce both goods in autarky.If both countries open their economies to trade,identify the workers in each country who will be hurt by free trade.

Accepted Answer

Once both countries open their borders t

Question 5

The importers of a good may prefer a quota over a tariff because

Accepted Answer

A)  a quota generates additional profits for importers. 
B)  a tariff, but not a quota, generates additional profits for importers, not the government. 
C)  the government gives subsidies to those who import from other countries. 
D)  a quota may have more loopholes in its implementation than a tariff. 
A)  a quota generates additional profits for importers. 
B)  a tariff, but not a quota, generates additional profits for importers, not the government. 
C)  the government gives subsidies to those who import from other countries. 
D)  a quota may have more loopholes in its implementation than a tariff.

Question 6

Suppose Japan produces only two goods,rice and electronics.If Japan has a comparative advantage in electronics,a move toward free trade will

Accepted Answer

A)  harm electronics workers, benefit rice workers, but benefit the nation as a whole. 
B)  benefit electronics workers, harm rice workers, but benefit the nation as a whole. 
C)  harm electronics workers, harm rice workers, but benefit the nation as a whole. 
D)  benefit electronics workers, harm rice workers, but harm the nation as a whole. 
A)  harm electronics workers, benefit rice workers, but benefit the nation as a whole. 
B)  benefit electronics workers, harm rice workers, but benefit the nation as a whole. 
C)  harm electronics workers, harm rice workers, but benefit the nation as a whole. 
D)  benefit electronics workers, harm rice workers, but harm the nation as a whole.

Question 7

According to the data presented in the text,the effect of Japan's voluntary export restraints on cars in 1984

Accepted Answer

A)  increased the price of Japanese cars in the United States. 
B)  decreased the price of Japanese cars in the United States. 
C)  increased the number of Japanese cars imported in the United States. 
D)  caused Japanese car companies to delay building plants in the United States. 
A)  increased the price of Japanese cars in the United States. 
B)  decreased the price of Japanese cars in the United States. 
C)  increased the number of Japanese cars imported in the United States. 
D)  caused Japanese car companies to delay building plants in the United States.

Question 8

If Nation A can produce shirts at a lower opportunity cost than any other nation,Nation A is said to have a(n)________ in the production of shirts.

Accepted Answer

A)  autarky 
B)  comparative advantage 
C)  absolute advantage 
D)  comparative disadvantage 
A)  autarky 
B)  comparative advantage 
C)  absolute advantage 
D)  comparative disadvantage

Question 9

Daily Output of Scotland and Poland
   
Table 18.1
-Refer to Table 18.1.The opportunity cost of an accordion in Poland is

Accepted Answer

A)  1/3 of a bagpipe. 
B)  1/2 of a bagpipe. 
C)  3 bagpipes. 
D)  6 bagpipes. 
A)  1/3 of a bagpipe. 
B)  1/2 of a bagpipe. 
C)  3 bagpipes. 
D)  6 bagpipes.

Question 10

If a country bans the importation of a particular good,the market equilibrium is shown by the intersection of the demand and domestic supply curves.

Accepted Answer

A) True 
 B)False

Question 11

The first major international agreement after World War II was the

Accepted Answer

A)  General Agreement on Tariffs and Trade. 
B)  North American Free Trade Area. 
C)  World Trade Organization. 
D)  European Union. 
A)  General Agreement on Tariffs and Trade. 
B)  North American Free Trade Area. 
C)  World Trade Organization. 
D)  European Union.

Question 12

Recall the Application about the World Trade Organization (WTO) to answer the following question(s).
-According to the Application,________ were opposed to the 2014 U.S.tariffs imposed on solar panels imported from Taiwan and China.

Accepted Answer

A)  most U.S. installers of solar equipment 
B)  no U.S. installers of solar equipment 
C)  all global manufacturers of solar equipment 
D)  only Taiwanese manufacturers of solar equipment 
A)  most U.S. installers of solar equipment 
B)  no U.S. installers of solar equipment 
C)  all global manufacturers of solar equipment 
D)  only Taiwanese manufacturers of solar equipment

Question 13

What are some of the reasons why people protest against free trade?

Accepted Answer

A)  People believe that trade can cause income inequality. 
B)  Trading with other countries, as opposed to self-sufficiency, diminishes our independence and sovereignty. 
C)  Trading with other countries causes us to lose our cultural identity. 
D)  All of the above are correct. 
A)  People believe that trade can cause income inequality. 
B)  Trading with other countries, as opposed to self-sufficiency, diminishes our independence and sovereignty. 
C)  Trading with other countries causes us to lose our cultural identity. 
D)  All of the above are correct.

Question 14

The increase in the U.S trade deficit with Mexico after NAFTA went into effect was most likely the result of

Accepted Answer

A)  predatory dumping by U.S. companies. 
B)  the devaluation of the peso. 
C)  the appreciation of the peso. 
D)  predatory dumping by Mexican companies. 
A)  predatory dumping by U.S. companies. 
B)  the devaluation of the peso. 
C)  the appreciation of the peso. 
D)  predatory dumping by Mexican companies.

Question 15

If a firm charges a foreign market a lower price than it charges the domestic market that firm is said to be ________ its product.

Accepted Answer

A)  disposing of 
B)  dumping 
C)  transferring 
D)  stumping 
A)  disposing of 
B)  dumping 
C)  transferring 
D)  stumping

Question 16

During the 1980s,firms from ________ were accused of dumping VCRs in Europe.

Accepted Answer

A)  Taiwan 
B)  Japan 
C)  Mexico 
D)  Korea 
A)  Taiwan 
B)  Japan 
C)  Mexico 
D)  Korea

Question 17

Suppose Nation A produces only two goods,apples and oranges.If Nation A produces only apples,it can make 16 apples per day.If Nation A produces only oranges,it can make 4 oranges per day.If the country has a constant production trade-off between apples and oranges,then the opportunity cost of one apple in Nation A is

Accepted Answer

A)  0.25 oranges. 
B)  2 oranges. 
C)  4 oranges. 
D)  16 oranges. 
A)  0.25 oranges. 
B)  2 oranges. 
C)  4 oranges. 
D)  16 oranges.

Question 18

Which of the following is an example of a firm that received protection from the government because the government wants the domestic firm to establish a monopoly in the world market?

Accepted Answer

A)  Airbus 
B)  Apple 
C)  Harley-Davidson 
D)  Ford 
A)  Airbus 
B)  Apple 
C)  Harley-Davidson 
D)  Ford

Question 19

Figure 18.5
-For the good in Figure 18.5,with free trade,the people in the country will buy

Accepted Answer

A)  Q₂. 
B)  Q₃. 
C)  Q₄. 
D)  Q₅. 
A)  Q₂. 
B)  Q₃. 
C)  Q₄. 
D)  Q₅.

Question 20

Which of the following trade agreements took effect in 1994 and,over a 15-year period,will eliminate all tariffs and other trade barriers between its members?

Accepted Answer

A)  North American Free Trade Agreement 
B)  World Trade Organization 
C)  Asian Pacific Economic Cooperation 
D)  GATT 
A)  North American Free Trade Agreement 
B)  World Trade Organization 
C)  Asian Pacific Economic Cooperation 
D)  GATT

The members of NAFTA are the United States,Canada,and

Suppose the United States imposes a ban on imported steel from China because the Chinese steel was made with factories that pollute the environment.If China complains to the WTO regarding the U.S.ban,the WTO will side with

Daily Output of Scotland and Poland Table 18.1 -Refer to Table 18.1.If Scotland produces and consumes 5 accordions and 40 bagpipes while Poland produces and consumes 25 bagpipes and 100 accordions,then we say that Poland and Scotland are

The importers of a good may prefer a quota over a tariff because

Suppose Japan produces only two goods,rice and electronics.If Japan has a comparative advantage in electronics,a move toward free trade will

According to the data presented in the text,the effect of Japan's voluntary export restraints on cars in 1984

If Nation A can produce shirts at a lower opportunity cost than any other nation,Nation A is said to have a(n)________ in the production of shirts.

Daily Output of Scotland and Poland Table 18.1 -Refer to Table 18.1.The opportunity cost of an accordion in Poland is

If a country bans the importation of a particular good,the market equilibrium is shown by the intersection of the demand and domestic supply curves.

The first major international agreement after World War II was the

Recall the Application about the World Trade Organization (WTO) to answer the following question(s). -According to the Application,________ were opposed to the 2014 U.S.tariffs imposed on solar panels imported from Taiwan and China.

What are some of the reasons why people protest against free trade?

The increase in the U.S trade deficit with Mexico after NAFTA went into effect was most likely the result of

If a firm charges a foreign market a lower price than it charges the domestic market that firm is said to be ________ its product.

During the 1980s,firms from ________ were accused of dumping VCRs in Europe.

Which of the following is an example of a firm that received protection from the government because the government wants the domestic firm to establish a monopoly in the world market?

Figure 18.5 -For the good in Figure 18.5,with free trade,the people in the country will buy

Which of the following trade agreements took effect in 1994 and,over a 15-year period,will eliminate all tariffs and other trade barriers between its members?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

Filters

Exam 18: International Trade and Public Policy

The members of NAFTA are the United States,Canada,and

Suppose the United States imposes a ban on imported steel from China because the Chinese steel was made with factories that pollute the environment.If China complains to the WTO regarding the U.S.ban,the WTO will side with

Daily Output of Scotland and Poland Table 18.1 -Refer to Table 18.1.If Scotland produces and consumes 5 accordions and 40 bagpipes while Poland produces and consumes 25 bagpipes and 100 accordions,then we say that Poland and Scotland are

The importers of a good may prefer a quota over a tariff because

Suppose Japan produces only two goods,rice and electronics.If Japan has a comparative advantage in electronics,a move toward free trade will

According to the data presented in the text,the effect of Japan's voluntary export restraints on cars in 1984

If Nation A can produce shirts at a lower opportunity cost than any other nation,Nation A is said to have a(n)________ in the production of shirts.

Daily Output of Scotland and Poland Table 18.1 -Refer to Table 18.1.The opportunity cost of an accordion in Poland is

If a country bans the importation of a particular good,the market equilibrium is shown by the intersection of the demand and domestic supply curves.

The first major international agreement after World War II was the

Recall the Application about the World Trade Organization (WTO) to answer the following question(s). -According to the Application,________ were opposed to the 2014 U.S.tariffs imposed on solar panels imported from Taiwan and China.

What are some of the reasons why people protest against free trade?

The increase in the U.S trade deficit with Mexico after NAFTA went into effect was most likely the result of

If a firm charges a foreign market a lower price than it charges the domestic market that firm is said to be ________ its product.

During the 1980s,firms from ________ were accused of dumping VCRs in Europe.

Which of the following is an example of a firm that received protection from the government because the government wants the domestic firm to establish a monopoly in the world market?

Figure 18.5 -For the good in Figure 18.5,with free trade,the people in the country will buy

Which of the following trade agreements took effect in 1994 and,over a 15-year period,will eliminate all tariffs and other trade barriers between its members?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

Filters