Question 1

The U.S.government imposes an import quota on sugar.This import quota helps ________ and harms ________.

Accepted Answer

A)  U.S. producers of sugar; U.S. consumers of sugar 
B)  U.S. producers of sugar; the U.S. government 
C)  the U.S. government; U.S. consumers of sugar 
D)  U.S. consumers of sugar; U.S. producers of sugar 
A)  U.S. producers of sugar; U.S. consumers of sugar 
B)  U.S. producers of sugar; the U.S. government 
C)  the U.S. government; U.S. consumers of sugar 
D)  U.S. consumers of sugar; U.S. producers of sugar

Question 2

Between August 2007 and July 2008,Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this,we know definitively that

Accepted Answer

A)  Brazil has comparative advantage in coffee production 
B)  The rest of the world has comparative advantage in coffee production 
C)  The rest of the world has absolute advantage in coffee production 
D)  Brazil has absolute advantage in coffee production 
A)  Brazil has comparative advantage in coffee production 
B)  The rest of the world has comparative advantage in coffee production 
C)  The rest of the world has absolute advantage in coffee production 
D)  Brazil has absolute advantage in coffee production

Question 3

Which of the following is a TRUE statement?

Accepted Answer

A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition. 
A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition.

Question 4

A tariff is a

Accepted Answer

A)  tax on an exported good or service. 
B)  tax on an imported good or service. 
C)  subsidy on an exported good. 
D)  subsidy on an imported good. 
A)  tax on an exported good or service. 
B)  tax on an imported good or service. 
C)  subsidy on an exported good. 
D)  subsidy on an imported good.

Question 5

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations.However,are there any losers from such a policy change?

Accepted Answer

Yes,there are losers from opening up to

Question 6

When a foreign firm sells its exports at a lower price than its cost of production,the firm is

Accepted Answer

A)  imposing an economies of scale cost. 
B)  dumping. 
C)  avoiding a tariff. 
D)  competing in an infant industry. 
A)  imposing an economies of scale cost. 
B)  dumping. 
C)  avoiding a tariff. 
D)  competing in an infant industry.

Question 7

Belize,a country in Central America,has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade,what would be the gains from trade?

Accepted Answer

A)  Belize coffee producers would gain from trade. 
B)  Belize coffee consumers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade. 
A)  Belize coffee producers would gain from trade. 
B)  Belize coffee consumers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade.

Question 8

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

Accepted Answer

A) True 
 B)False

Question 9

An assumption behind the infant-industry argument for tariff protection is that

Accepted Answer

A)  foreign competitors are selling output below average cost. 
B)  the domestic industry will be facing an upward adjustment in its average cost. 
C)  the domestic industry will eventually gain a comparative advantage in producing the good. 
D)  the market needs additional competition to satisfy consumer demand. 
A)  foreign competitors are selling output below average cost. 
B)  the domestic industry will be facing an upward adjustment in its average cost. 
C)  the domestic industry will eventually gain a comparative advantage in producing the good. 
D)  the market needs additional competition to satisfy consumer demand.

Question 10

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

Accepted Answer

A)  more airplanes will be produced in the United States 
B)  there will be no change in the price of airplanes in the United States 
C)  the world price of airplanes will increase 
D)  the quantity of airplanes demanded in the United States will increase 
A)  more airplanes will be produced in the United States 
B)  there will be no change in the price of airplanes in the United States 
C)  the world price of airplanes will increase 
D)  the quantity of airplanes demanded in the United States will increase

Question 11

An import quota directly restricts ________ and are designed to protect domestic ________.

Accepted Answer

A)  exports; consumers 
B)  exports; producers 
C)  imports; consumers 
D)  imports; producers 
A)  exports; consumers 
B)  exports; producers 
C)  imports; consumers 
D)  imports; producers

Question 12

Define comparative advantage and discuss its role in international trade.

Accepted Answer

Comparative advantage is the factor that

Question 13

Compared to the situation before international trade,after the United States exports a good production in the United States ________ and consumption in the United States ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 14

Give a brief description of the history of tariffs in the U.S.

Accepted Answer

Today,U.S.tariffs are low compared to th

Question 15

Since 1930,tariff levels in the United States have

Accepted Answer

A)  generally declined. 
B)  steadily risen. 
C)  increased during expansions. 
D)  decreased during recessions. 
A)  generally declined. 
B)  steadily risen. 
C)  increased during expansions. 
D)  decreased during recessions.

Question 16

During 2005-2006 Europe imported more than $70 million worth of US long-grain rice. In 2006,the European Union threatened to restrict imports of long-grain rice because traces of genetically modified rice were found mixed in to commercial supplies. What would NOT be an effect in the European rice market if U.S.imports were banned?

Accepted Answer

A)  There would be a increase in long-grain rice consumption. 
B)  There would be an increase in European rice production. 
C)  The price of long-grain rice would increase. 
D)  The quantity of long-grain rice imports would decrease. 
A)  There would be a increase in long-grain rice consumption. 
B)  There would be an increase in European rice production. 
C)  The price of long-grain rice would increase. 
D)  The quantity of long-grain rice imports would decrease.

Question 17

The idea of dynamic comparative advantage is the basis for which of the following arguments for protection from foreign competition?

Accepted Answer

A)  the cheap foreign labor argument 
B)  the infant-industry argument 
C)  the dumping argument 
D)  the saves jobs argument 
A)  the cheap foreign labor argument 
B)  the infant-industry argument 
C)  the dumping argument 
D)  the saves jobs argument

Question 18

Who benefits from imports?

Accepted Answer

A)  domestic consumers 
B)  domestic producers 
C)  foreign consumers 
D)  domestic workers in the industry 
A)  domestic consumers 
B)  domestic producers 
C)  foreign consumers 
D)  domestic workers in the industry

Question 19

The (false) idea that an industry should be protected because of learning-by-doing until it is large enough to compete successfully in world markets is the ________ argument for protection.

Accepted Answer

A)  cheap foreign labor 
B)  infant industry 
C)  dumping 
D)  comparative advantage 
A)  cheap foreign labor 
B)  infant industry 
C)  dumping 
D)  comparative advantage

Question 20

The Smoot-Hawley Act introduced

Accepted Answer

A)  opportunities for expanding U.S. foreign trade. 
B)  the highest tariffs set by the United States in the last 80 years. 
C)  a framework promoting international free trade. 
D)  revenue tariffs as a major source of U.S. government revenues. 
A)  opportunities for expanding U.S. foreign trade. 
B)  the highest tariffs set by the United States in the last 80 years. 
C)  a framework promoting international free trade. 
D)  revenue tariffs as a major source of U.S. government revenues.

The U.S.government imposes an import quota on sugar.This import quota helps and harms .

Between August 2007 and July 2008,Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this,we know definitively that

Which of the following is a TRUE statement?

A tariff is a

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations.However,are there any losers from such a policy change?

When a foreign firm sells its exports at a lower price than its cost of production,the firm is

Belize,a country in Central America,has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade,what would be the gains from trade?

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

An assumption behind the infant-industry argument for tariff protection is that

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

An import quota directly restricts and are designed to protect domestic .

Define comparative advantage and discuss its role in international trade.

Compared to the situation before international trade,after the United States exports a good production in the United States and consumption in the United States .

Give a brief description of the history of tariffs in the U.S.

Since 1930,tariff levels in the United States have

The idea of dynamic comparative advantage is the basis for which of the following arguments for protection from foreign competition?

Who benefits from imports?

The (false) idea that an industry should be protected because of learning-by-doing until it is large enough to compete successfully in world markets is the ________ argument for protection.

The Smoot-Hawley Act introduced

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 15: International Trade Policy

The U.S.government imposes an import quota on sugar.This import quota helps ________ and harms ________.

Between August 2007 and July 2008,Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this,we know definitively that

Which of the following is a TRUE statement?

A tariff is a

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations.However,are there any losers from such a policy change?

When a foreign firm sells its exports at a lower price than its cost of production,the firm is

Belize,a country in Central America,has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade,what would be the gains from trade?

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

An assumption behind the infant-industry argument for tariff protection is that

The United States decides to follow its comparative advantage and specialize in the production of airplanes. Which of the following will occur?

An import quota directly restricts ________ and are designed to protect domestic ________.

Define comparative advantage and discuss its role in international trade.

Compared to the situation before international trade,after the United States exports a good production in the United States ________ and consumption in the United States ________.

Give a brief description of the history of tariffs in the U.S.

Since 1930,tariff levels in the United States have

The idea of dynamic comparative advantage is the basis for which of the following arguments for protection from foreign competition?

Who benefits from imports?

The (false) idea that an industry should be protected because of learning-by-doing until it is large enough to compete successfully in world markets is the ________ argument for protection.

The Smoot-Hawley Act introduced

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

The U.S.government imposes an import quota on sugar.This import quota helps and harms .

An import quota directly restricts and are designed to protect domestic .

Compared to the situation before international trade,after the United States exports a good production in the United States and consumption in the United States .