Question 1

Figure 14-1
  
-Refer to Figure 14-1.How much does the imposition of a tariff increase domestic producer surplus by?

Accepted Answer

A) c 
B) g + c 
C) g 
D) g + c. 
A) c 
B) g + c 
C) g 
D) g + c. A

Question 2

Restrictions on the importation of tomatoes reduce the supply available to the Canadian domestic market.Studies indicate that the demand for tomatoes is elastic.Compared to a free-trade situation,what is the effect of the import restrictions?

Accepted Answer

A) They cause lower tomato prices and a reduction in consumer expenditure on tomatoes in Canada. 
B) They cause higher tomato prices and an increase in consumer expenditures on tomatoes in Canada. 
C) They cause higher tomato prices and a reduction in consumer expenditure on tomatoes in Canada. 
D) They cause lower tomato prices and an increase in consumer expenditure on tomatoes in Canada. 
A) They cause lower tomato prices and a reduction in consumer expenditure on tomatoes in Canada. 
B) They cause higher tomato prices and an increase in consumer expenditures on tomatoes in Canada. 
C) They cause higher tomato prices and a reduction in consumer expenditure on tomatoes in Canada. 
D) They cause lower tomato prices and an increase in consumer expenditure on tomatoes in Canada. C

Question 3

Canada is a member of the WTO.

Accepted Answer

A) True 
 B)False  True

Question 4

A Canadian tariff on French wine will likely benefit Canadian wine producers,and the Canadian government harms both Canadian wine drinkers and French wine producers by increasing tax revenue.

Accepted Answer

A) True 
 B)False

Question 5

Assume that an exporter's supply curve of a commodity is upward sloping.If a change in import demands in other countries leads it to increase its exports,other things equal,what would be the impact on the domestic price of the commodity?

Accepted Answer

A) The domestic price of the commodity will fall. 
B) The domestic price of the commodity will exceed the price in foreign countries. 
C) The domestic price of the commodity will be below the price in foreign countries. 
D) The domestic price of the commodity will rise. 
A) The domestic price of the commodity will fall. 
B) The domestic price of the commodity will exceed the price in foreign countries. 
C) The domestic price of the commodity will be below the price in foreign countries. 
D) The domestic price of the commodity will rise.

Question 6

Table 14-2
Alpha can produce either 18 oranges or 9 apples an hour, while Omega can produce either 16 oranges or 4 apples an hour.
-Refer to Table 14-2.Which of the following best describes the situation if terms of trade between the two countries are established as 1 apple for 2 oranges?

Accepted Answer

A) There is no incentive for Omega to engage in international specialization and trade of apples and oranges. 
B) There is no incentive for Alpha to specialize and trade with Omega. 
C) It is in the interest of Omega to grow oranges and trade for apples. 
D) It is in the interest of both countries to specialize and trade with one another. 
A) There is no incentive for Omega to engage in international specialization and trade of apples and oranges. 
B) There is no incentive for Alpha to specialize and trade with Omega. 
C) It is in the interest of Omega to grow oranges and trade for apples. 
D) It is in the interest of both countries to specialize and trade with one another.

Question 7

Which of the following results from a subsidy?

Accepted Answer

A) exports increase 
B) domestic production costs increase 
C) world output is increased 
D) imports increase 
A) exports increase 
B) domestic production costs increase 
C) world output is increased 
D) imports increase

Question 8

In what way does a tariff differ from a quota?

Accepted Answer

A) A tariff is levied on imports, whereas a quota is imposed on exports. 
B) A tariff is a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. 
C) A tariff is a tax imposed on imports, whereas a quota is an absolute limit on the number of units of a good that can be imported. 
D) A tariff is levied on exports, whereas a quota is imposed on imports. 
A) A tariff is levied on imports, whereas a quota is imposed on exports. 
B) A tariff is a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. 
C) A tariff is a tax imposed on imports, whereas a quota is an absolute limit on the number of units of a good that can be imported. 
D) A tariff is levied on exports, whereas a quota is imposed on imports.

Question 9

Which of the following trade agreements no longer exists?

Accepted Answer

A) GATT 
B) the EU 
C) the WTO 
D) NAFTA 
A) GATT 
B) the EU 
C) the WTO 
D) NAFTA

Question 10

The intended gains from Canadian tariffs and other trade restrictions can backfire if foreign governments retaliate by imposing additional trade restrictions on Canadian goods sold in their countries.

Accepted Answer

A) True 
 B)False

Question 11

What is the difference between the price the seller receives for a good or service and the minimum price he would be willing to accept for that unit called?

Accepted Answer

A) the gain in producer surplus 
B) excess supply 
C) the total gains from trading that unit 
D) the gain in consumer surplus 
A) the gain in producer surplus 
B) excess supply 
C) the total gains from trading that unit 
D) the gain in consumer surplus

Question 12

What impact will raising an existing tariff on grapes from Chile have?

Accepted Answer

A) It will increase Canadian consumption of domestically produced grapes. 
B) It will increase Canadian imports of Chilean grapes. 
C) It will increase Canadian consumption of Chilean grapes. 
D) It will increase total Canadian consumption of grapes. 
A) It will increase Canadian consumption of domestically produced grapes. 
B) It will increase Canadian imports of Chilean grapes. 
C) It will increase Canadian consumption of Chilean grapes. 
D) It will increase total Canadian consumption of grapes.

Question 13

What is dumping?

Accepted Answer

A) when a foreign producer sells its products in the domestic market for below their costs to produce 
B) when a foreign producer sells its product in a developing market because it does not meet safety or environment standards in their own market 
C) when a domestic producer sells its product for a higher price in the domestic market than it does in a foreign market 
D) when a domestic producer sells its product in the domestic market for below their costs to produce 
A) when a foreign producer sells its products in the domestic market for below their costs to produce 
B) when a foreign producer sells its product in a developing market because it does not meet safety or environment standards in their own market 
C) when a domestic producer sells its product for a higher price in the domestic market than it does in a foreign market 
D) when a domestic producer sells its product in the domestic market for below their costs to produce

Question 14

If Colombia produces coffee with less labour and land than any other country,what kind of advantage does it have?

Accepted Answer

A) both a comparative and absolute advantage in coffee production 
B) a comparative advantage in coffee production 
C) an absolute advantage and comparative disadvantage in coffee production 
D) an absolute advantage in coffee production 
A) both a comparative and absolute advantage in coffee production 
B) a comparative advantage in coffee production 
C) an absolute advantage and comparative disadvantage in coffee production 
D) an absolute advantage in coffee production

Question 15

Economically speaking,which of the following best describes tariffs?

Accepted Answer

A) They protect domestic consumers of goods. 
B) They protect foreign producers of goods. 
C) They protect domestic producers of exported goods. 
D) They limit voluntary exchanges. 
A) They protect domestic consumers of goods. 
B) They protect foreign producers of goods. 
C) They protect domestic producers of exported goods. 
D) They limit voluntary exchanges.

Question 16

Table 14-3
Karl can produce either 10 tonnes of oranges or 5 tonnes of apples in a year, while Adam can produce either 5 tonnes of oranges or 10 tonnes of apples.
-Refer to Table 14-3.What terms of trade between Karl and Adam would be mutually beneficial?

Accepted Answer

A) 1 tonne of apples per 2.5 tonnes of oranges 
B) 1 tonne of apples per 1.5 tonnes of oranges 
C) 1 tonne of apples per 0.25 tonne of oranges 
D) 1 tonne of apples per 0.20 tonne of oranges 
A) 1 tonne of apples per 2.5 tonnes of oranges 
B) 1 tonne of apples per 1.5 tonnes of oranges 
C) 1 tonne of apples per 0.25 tonne of oranges 
D) 1 tonne of apples per 0.20 tonne of oranges

Question 17

What effect does a tariff on a particular good have?

Accepted Answer

A) It results in a higher total quantity sold. 
B) It redistributes income away from foreign producers toward domestic producers. 
C) It decreases the price of the good to domestic consumers. 
D) It increases the net-of-tariff price received by foreign producers. 
A) It results in a higher total quantity sold. 
B) It redistributes income away from foreign producers toward domestic producers. 
C) It decreases the price of the good to domestic consumers. 
D) It increases the net-of-tariff price received by foreign producers.

Question 18

In the mid 1990s,countries of the world exported $6.5 trillion dollars' worth of goods and services.How large were total world imports of goods and services during this period? Explain your answer.

Accepted Answer

For the world as a whole,imports have to

Question 19

A country has an absolute advantage over another if it can produce a good with fewer resources.

Accepted Answer

A) True 
 B)False

Question 20

What impact will a Canadian import tariff imposed on steel likely have?

Accepted Answer

A) It will increase employment in the Canadian steel industries. 
B) It will increase the real incomes of steel users. 
C) It will increase employment in the economy as a whole. 
D) It will raise the total quantity of foreign and domestic steel sold in Canada. 
A) It will increase employment in the Canadian steel industries. 
B) It will increase the real incomes of steel users. 
C) It will increase employment in the economy as a whole. 
D) It will raise the total quantity of foreign and domestic steel sold in Canada.

Figure 14-1 -Refer to Figure 14-1.How much does the imposition of a tariff increase domestic producer surplus by?

Restrictions on the importation of tomatoes reduce the supply available to the Canadian domestic market.Studies indicate that the demand for tomatoes is elastic.Compared to a free-trade situation,what is the effect of the import restrictions?

Canada is a member of the WTO.

A Canadian tariff on French wine will likely benefit Canadian wine producers,and the Canadian government harms both Canadian wine drinkers and French wine producers by increasing tax revenue.

Assume that an exporter's supply curve of a commodity is upward sloping.If a change in import demands in other countries leads it to increase its exports,other things equal,what would be the impact on the domestic price of the commodity?

Table 14-2 Alpha can produce either 18 oranges or 9 apples an hour, while Omega can produce either 16 oranges or 4 apples an hour. -Refer to Table 14-2.Which of the following best describes the situation if terms of trade between the two countries are established as 1 apple for 2 oranges?

Which of the following results from a subsidy?

In what way does a tariff differ from a quota?

Which of the following trade agreements no longer exists?

The intended gains from Canadian tariffs and other trade restrictions can backfire if foreign governments retaliate by imposing additional trade restrictions on Canadian goods sold in their countries.

What is the difference between the price the seller receives for a good or service and the minimum price he would be willing to accept for that unit called?

What impact will raising an existing tariff on grapes from Chile have?

What is dumping?

If Colombia produces coffee with less labour and land than any other country,what kind of advantage does it have?

Economically speaking,which of the following best describes tariffs?

Table 14-3 Karl can produce either 10 tonnes of oranges or 5 tonnes of apples in a year, while Adam can produce either 5 tonnes of oranges or 10 tonnes of apples. -Refer to Table 14-3.What terms of trade between Karl and Adam would be mutually beneficial?

What effect does a tariff on a particular good have?

In the mid 1990s,countries of the world exported $6.5 trillion dollars' worth of goods and services.How large were total world imports of goods and services during this period? Explain your answer.

A country has an absolute advantage over another if it can produce a good with fewer resources.

What impact will a Canadian import tariff imposed on steel likely have?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Finance

Filters

Exam 14: International Trade

Figure 14-1 -Refer to Figure 14-1.How much does the imposition of a tariff increase domestic producer surplus by?

Restrictions on the importation of tomatoes reduce the supply available to the Canadian domestic market.Studies indicate that the demand for tomatoes is elastic.Compared to a free-trade situation,what is the effect of the import restrictions?

Canada is a member of the WTO.

A Canadian tariff on French wine will likely benefit Canadian wine producers,and the Canadian government harms both Canadian wine drinkers and French wine producers by increasing tax revenue.

Assume that an exporter's supply curve of a commodity is upward sloping.If a change in import demands in other countries leads it to increase its exports,other things equal,what would be the impact on the domestic price of the commodity?

Table 14-2 Alpha can produce either 18 oranges or 9 apples an hour, while Omega can produce either 16 oranges or 4 apples an hour. -Refer to Table 14-2.Which of the following best describes the situation if terms of trade between the two countries are established as 1 apple for 2 oranges?

Which of the following results from a subsidy?

In what way does a tariff differ from a quota?

Which of the following trade agreements no longer exists?

The intended gains from Canadian tariffs and other trade restrictions can backfire if foreign governments retaliate by imposing additional trade restrictions on Canadian goods sold in their countries.

What is the difference between the price the seller receives for a good or service and the minimum price he would be willing to accept for that unit called?

What impact will raising an existing tariff on grapes from Chile have?

What is dumping?

If Colombia produces coffee with less labour and land than any other country,what kind of advantage does it have?

Economically speaking,which of the following best describes tariffs?

Table 14-3 Karl can produce either 10 tonnes of oranges or 5 tonnes of apples in a year, while Adam can produce either 5 tonnes of oranges or 10 tonnes of apples. -Refer to Table 14-3.What terms of trade between Karl and Adam would be mutually beneficial?

What effect does a tariff on a particular good have?

In the mid 1990s,countries of the world exported $6.5 trillion dollars' worth of goods and services.How large were total world imports of goods and services during this period? Explain your answer.

A country has an absolute advantage over another if it can produce a good with fewer resources.

What impact will a Canadian import tariff imposed on steel likely have?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Finance

Filters