Question 1

A tariff hurts

Accepted Answer

A)  the government by decreasing its revenue. 
B)  domestic producers who can't compete with cheaper imports. 
C)  consumers who will pay more for the imported good. 
D)  All of the above answers are correct. 
A)  the government by decreasing its revenue. 
B)  domestic producers who can't compete with cheaper imports. 
C)  consumers who will pay more for the imported good. 
D)  All of the above answers are correct.

Question 2

Japan was accused of dumping in the steel industry within the United States when it

Accepted Answer

A)  negotiated an illegal agreement to raise prices with U.S. steel industries. 
B)  prohibited imports of U.S. steel into Japan. 
C)  sold steel in the United States at a price below its cost of production. 
D)  negotiated a illegal trade deal with Canada. 
A)  negotiated an illegal agreement to raise prices with U.S. steel industries. 
B)  prohibited imports of U.S. steel into Japan. 
C)  sold steel in the United States at a price below its cost of production. 
D)  negotiated a illegal trade deal with Canada.

Question 3

The fundamental force that generates international trade is

Accepted Answer

A)  absolute advantage. 
B)  comparative advantage. 
C)  law of diminishing returns. 
D)  law of increasing costs. 
A)  absolute advantage. 
B)  comparative advantage. 
C)  law of diminishing returns. 
D)  law of increasing costs.

Question 4

Who benefits from an import quota on a good?

Accepted Answer

A)  Domestic consumers of the good 
B)  Foreign governments 
C)  Domestic producers of the good 
D)  Foreign producers of the good 
A)  Domestic consumers of the good 
B)  Foreign governments 
C)  Domestic producers of the good 
D)  Foreign producers of the good

Question 5

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________.

Accepted Answer

A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot 
A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot

Question 6

In 2006,European Union tariff on imported bananas from Latin America was €176 a ton. Suppose 2.5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result,3 million tons were imported in 2007. What is the change in tariff revenue between 2006 and 2007?

Accepted Answer

A)  €1,000,000 
B)  €440,000,000 
C)  €445,000,000 
D)  - €1,000,000 
A)  €1,000,000 
B)  €440,000,000 
C)  €445,000,000 
D)  - €1,000,000

Question 7

Based on the table below,at what world price would the country export?
$$\begin{array} { | l | l | l | } 
\hline \text { Price } & \text { QDemanded } & \text { QSupplied } \
\hline 2 & 100 & 70 \
\hline 4 & 95 & 75 \
\hline 6 & 90 & 80 \
\hline 8 & 85 & 85 \
\hline 10 & 80 & 90 \
\hline 12 & 75 & 95 \
\hline
\end{array}$$

Accepted Answer

A)  all prices above $8 
B)  at only $8 
C)  all prices below $8 
D)  it is impossible to say 
A)  all prices above $8 
B)  at only $8 
C)  all prices below $8 
D)  it is impossible to say

Question 8

The United States imports cars from Japan.If the United States imposes a tariff on cars imported from Japan,American

Accepted Answer

A)  consumers will lose and Japanese producers will gain. 
B)  tariff revenue will equal the loss inflicted on American consumers. 
C)  consumers will lose and American producers will gain. 
D)  car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers. 
A)  consumers will lose and Japanese producers will gain. 
B)  tariff revenue will equal the loss inflicted on American consumers. 
C)  consumers will lose and American producers will gain. 
D)  car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers.

Question 9

The United States has a comparative advantage in producing cotton if the U.S.price of cotton before international trade is ________ the world price

Accepted Answer

A)  less than 
B)  equal to 
C)  greater than 
D)  not comparable to 
A)  less than 
B)  equal to 
C)  greater than 
D)  not comparable to

Question 10

A tariff ________ the quantity of the good imported and ________ the domestic price of the imported good.

Accepted Answer

A)  decreases; decreases 
B)  decreases; increases 
C)  increases; lowers 
D)  does not change; increases 
A)  decreases; decreases 
B)  decreases; increases 
C)  increases; lowers 
D)  does not change; increases

Question 11

Trade barriers are politically popular because

Accepted Answer

A)  they are a way to avoid trade wars and still protect domestic producers. 
B)  people recognize their use as a negotiating tool in international relations. 
C)  their benefits are widespread, while their costs are highly concentrated. 
D)  their benefits are concentrated, while their costs are widespread. 
A)  they are a way to avoid trade wars and still protect domestic producers. 
B)  people recognize their use as a negotiating tool in international relations. 
C)  their benefits are widespread, while their costs are highly concentrated. 
D)  their benefits are concentrated, while their costs are widespread.

Question 12

The U.S.-Colombia Trade Promotion Agreement was signed on November 22,2006,in Washington,D.C.This comprehensive trade agreement eliminated tariffs and other barriers to goods and services.Colombia will immediately eliminate tariffs on wheat,barley,peanuts,and many other products in which Columbia does not have a comparative advantage.This policy means that the price of peanuts in Columbia will become

Accepted Answer

A)  equal to the free trade price 
B)  lower than the free trade price 
C)  higher than the price when a tariff was in place 
D)  higher than the free trade price 
A)  equal to the free trade price 
B)  lower than the free trade price 
C)  higher than the price when a tariff was in place 
D)  higher than the free trade price

Question 13

Which of the following statements concerning tariffs is NOT true?

Accepted Answer

A)  A tariff results in a loss for domestic consumers of the good. 
B)  A tariff creates revenue for the government. 
C)  A tariff decreases international trade. 
D)  A tariff leaves the price of imports unchanged. 
A)  A tariff results in a loss for domestic consumers of the good. 
B)  A tariff creates revenue for the government. 
C)  A tariff decreases international trade. 
D)  A tariff leaves the price of imports unchanged.

Question 14

Which of the following are TRUE regarding the argument that trade barriers protect U.S.workers from cheap foreign labor?
I. Low-wage foreigners are just as productive as U.S.workers.
II. U.S.workers have a comparative advantage in low-wage jobs.

Accepted Answer

A)  I only 
B)  II only 
C)  I and II 
D)  Neither I nor II is correct. 
A)  I only 
B)  II only 
C)  I and II 
D)  Neither I nor II is correct.

Question 15

An import quota specifies the

Accepted Answer

A)  highest price that can be charged for an imported good. 
B)  per unit tax that must be paid on an imported good. 
C)  maximum quantity of a good that may be imported during a specified time period. 
D)  minimum quantity of a good that must be exported during a specified time period. 
A)  highest price that can be charged for an imported good. 
B)  per unit tax that must be paid on an imported good. 
C)  maximum quantity of a good that may be imported during a specified time period. 
D)  minimum quantity of a good that must be exported during a specified time period.

Question 16

The fundamental force that drives international trade is:

Accepted Answer

A)  Comparative advantage 
B)  Absolute advantage 
C)  Countries' desire to increase their trade surplus 
D)  Cheap labor in countries like China or India 
A)  Comparative advantage 
B)  Absolute advantage 
C)  Countries' desire to increase their trade surplus 
D)  Cheap labor in countries like China or India

Question 17

If a tariff is imposed,the price paid by domestic consumers will ________ and the amount imported will ________.

Accepted Answer

A)  increase; decrease 
B)  increase; not change 
C)  not change; increase 
D)  increase; increase 
A)  increase; decrease 
B)  increase; not change 
C)  not change; increase 
D)  increase; increase

Question 18

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba

Question 19

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

Accepted Answer

A) True 
 B)False

Question 20

How does a quota affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

Accepted Answer

A quota raises the price of the good bec

A tariff hurts

Japan was accused of dumping in the steel industry within the United States when it

The fundamental force that generates international trade is

Who benefits from an import quota on a good?

Usually the imposition of trade barriers affecting a particular good benefits people domestically,each of whom gains a .

Based on the table below,at what world price would the country export? Price QDemanded QSupplied 2 100 70 4 95 75 6 90 80 8 85 85 10 80 90 12 75 95

The United States imports cars from Japan.If the United States imposes a tariff on cars imported from Japan,American

The United States has a comparative advantage in producing cotton if the U.S.price of cotton before international trade is ________ the world price

A tariff the quantity of the good imported and the domestic price of the imported good.

Trade barriers are politically popular because

Which of the following statements concerning tariffs is NOT true?

Which of the following are TRUE regarding the argument that trade barriers protect U.S.workers from cheap foreign labor? I. Low-wage foreigners are just as productive as U.S.workers. II. U.S.workers have a comparative advantage in low-wage jobs.

An import quota specifies the

The fundamental force that drives international trade is:

If a tariff is imposed,the price paid by domestic consumers will and the amount imported will .

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

How does a quota affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

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

A tariff hurts

Japan was accused of dumping in the steel industry within the United States when it

The fundamental force that generates international trade is

Who benefits from an import quota on a good?

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________.

Based on the table below,at what world price would the country export? Price QDemanded QSupplied 2 100 70 4 95 75 6 90 80 8 85 85 10 80 90 12 75 95

The United States imports cars from Japan.If the United States imposes a tariff on cars imported from Japan,American

The United States has a comparative advantage in producing cotton if the U.S.price of cotton before international trade is ________ the world price

A tariff ________ the quantity of the good imported and ________ the domestic price of the imported good.

Trade barriers are politically popular because

Which of the following statements concerning tariffs is NOT true?

Which of the following are TRUE regarding the argument that trade barriers protect U.S.workers from cheap foreign labor? I. Low-wage foreigners are just as productive as U.S.workers. II. U.S.workers have a comparative advantage in low-wage jobs.

An import quota specifies the

The fundamental force that drives international trade is:

If a tariff is imposed,the price paid by domestic consumers will ________ and the amount imported will ________.

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

How does a quota affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

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

Usually the imposition of trade barriers affecting a particular good benefits people domestically,each of whom gains a .

A tariff the quantity of the good imported and the domestic price of the imported good.

If a tariff is imposed,the price paid by domestic consumers will and the amount imported will .