Question 1

Imposing trade barriers does all of the following except

Accepted Answer

A)  reduces economic efficiency. 
B)  lowers incomes. 
C)  lowers domestic prices. 
D)  invites retaliation from foreign governments. 
A)  reduces economic efficiency. 
B)  lowers incomes. 
C)  lowers domestic prices. 
D)  invites retaliation from foreign governments. C

Question 2

Figure 19-3
   Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota.
-Refer to Figure 19-3.With a quota in place,what is the quantity supplied by domestic producers?

Accepted Answer

A)  16 million pounds 
B)  18 million pounds 
C)  28 million pounds 
D)  34 million pounds 
A)  16 million pounds 
B)  18 million pounds 
C)  28 million pounds 
D)  34 million pounds B

Question 3

Table 19-1
 $\begin{array}{|c|c|c|}
\hline & \text { Bathing } & \text { Grooming } \
\hline \text { Linda } & 60 & 20 \
\hline \text { Sandy } & 50 & 25\
\hline
\end{array}$ Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week.
-Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Linda has a comparative advantage in dog bathing. 
B)  Sandy has an absolute advantage in dog bathing. 
C)  Sandy has a comparative advantage in dog bathing. 
D)  Linda has a comparative advantage in dog grooming and dog bathing. 
A)  Linda has a comparative advantage in dog bathing. 
B)  Sandy has an absolute advantage in dog bathing. 
C)  Sandy has a comparative advantage in dog bathing. 
D)  Linda has a comparative advantage in dog grooming and dog bathing. A

Question 4

The textbook refers to the following quotation from a Federal Reserve publication: "Trade is a win-win situation for all countries that participate." But many firms and workers oppose free-trade policies and protests against globalization have become a regular occurrence at meetings of the World Trade Organization.If trade is a "win-win" situation,why is there strong opposition to free trade and globalization?

Accepted Answer

Free trade between any two countries can

Question 5

What is the difference between imports and exports?

Accepted Answer

Imports are goods and services

Question 6

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by

Accepted Answer

A)  establishing the General Agreement on Tariffs and Trade (GATT). 
B)  passing the Smoot-Hawley Tariff. 
C)  establishing the World Trade Organization (WTO). 
D)  passing the North American Free Trade Agreement (NAFT
A) . 
A)  establishing the General Agreement on Tariffs and Trade (GATT). 
B)  passing the Smoot-Hawley Tariff. 
C)  establishing the World Trade Organization (WTO). 
D)  passing the North American Free Trade Agreement (NAFT
A) .

Question 7

Figure 19-1
   Figure 19-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 19-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

Accepted Answer

A)  5 units 
B)  10 units 
C)  15 units 
D)  20 units 
A)  5 units 
B)  10 units 
C)  15 units 
D)  20 units

Question 8

Figure 19-7
   Bragabong currently both produces and imports almonds. The government of Bragabong decides to restrict international trade in almonds by imposing a quota that allows imports of only 10 million kilos each year. Figure 19-7 shows the estimated demand and supply curves for almonds in Bragabong and the results of imposing the quota.
-Use Figure 19-7 to answer questions a-j.
a.If there is no quota what is the domestic price of almonds and what is the quantity of almonds demanded by consumers?
b.If there is no quota how many kilos of almonds would domestic producers supply and what quantity would be imported?
c.If there is no quota what is the dollar value of consumer surplus?
d.If there is no quota what is the dollar value of producer surplus received by producers in Bragabong?
e.If there is no quota what is the revenue received by foreign producers who supply almonds to Bragabong?
f.With a quota in place what is the price that consumers of Bragabong must now pay and what is the quantity demanded?
g.With a quota in place what is the dollar value of consumer surplus? Are consumers better off?
h.With a quota in place what is the dollar value of producer surplus received by producers in Bragabong? Are domestic producers better off?
i.Calculate the revenue to foreign producers who are granted permission to sell in Bragabong after the imposition of the quota.
j.Calculate the deadweight loss as a result of the quota.

Accepted Answer

a∙Price without a quota = $3 per kilo; q

Question 9

Currency traders expect the value of the dollar to rise.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

Accepted Answer

A)  Demand for dollars will increase, and supply of dollars will decrease. 
B)  Demand for dollars will increase, and supply of dollars will increase. 
C)  Demand for dollars will decrease, and supply of dollars will increase. 
D)  Demand for dollars will decrease, and supply of dollars will decrease. 
A)  Demand for dollars will increase, and supply of dollars will decrease. 
B)  Demand for dollars will increase, and supply of dollars will increase. 
C)  Demand for dollars will decrease, and supply of dollars will increase. 
D)  Demand for dollars will decrease, and supply of dollars will decrease.

Question 10

What are the four main sources of comparative advantage? Briefly explain each source and provide examples.

Accepted Answer

The 4 main sources cited are:
1∙climate

Question 11

Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets.This statement describes the ________ argument for protectionism.

Accepted Answer

A)  diseconomies of scale 
B)  protecting national security 
C)  anti-dumping 
D)  infant industry 
A)  diseconomies of scale 
B)  protecting national security 
C)  anti-dumping 
D)  infant industry

Question 12

Whenever a buyer and a seller agree to trade,both must believe they will be made better off

Accepted Answer

A)  unless the buyer resides in a different country than the seller. International trade may make the buyer or seller worse off. 
B)  unless one party is richer than the other. 
C)  only if the buyer and seller live in countries with market economies. 
D)  whether the buyer and seller live in the same (or different) city or country. 
A)  unless the buyer resides in a different country than the seller. International trade may make the buyer or seller worse off. 
B)  unless one party is richer than the other. 
C)  only if the buyer and seller live in countries with market economies. 
D)  whether the buyer and seller live in the same (or different) city or country.

Question 13

An expansionary monetary policy in the United States should

Accepted Answer

A)  decrease the foreign currency price of U.S. exports. 
B)  cause the dollar to appreciate. 
C)  decrease the dollar price of imports. 
D)  decrease net exports. 
A)  decrease the foreign currency price of U.S. exports. 
B)  cause the dollar to appreciate. 
C)  decrease the dollar price of imports. 
D)  decrease net exports.

Question 14

An appreciating yen makes Japanese products

Accepted Answer

A)  more expensive in foreign markets. 
B)  less expensive in foreign markets. 
C)  more expensive in the Japanese market. 
D)  more expensive in both foreign markets and the Japanese market. 
A)  more expensive in foreign markets. 
B)  less expensive in foreign markets. 
C)  more expensive in the Japanese market. 
D)  more expensive in both foreign markets and the Japanese market.

Question 15

Figure 19-3
   Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota.
-Refer to Figure 19-3.What is the area of domestic producer surplus after the imposition of a quota?

Accepted Answer

A)  B 
B)  B + C 
C)  B + E + I + J + M 
D)  E + I + J + M 
A)  B 
B)  B + C 
C)  B + E + I + J + M 
D)  E + I + J + M

Question 16

If Canada has a comparative advantage over Mexico in the production of timber,then

Accepted Answer

A)  the explicit cost of production for timber is lower in Canada than in Mexico. 
B)  the opportunity cost of production for timber is lower in Canada than in Mexico. 
C)  the implicit costs of production for timber are higher in Canada than in Mexico. 
D)  the average cost of production for timber is lower in Canada than in Mexico. 
A)  the explicit cost of production for timber is lower in Canada than in Mexico. 
B)  the opportunity cost of production for timber is lower in Canada than in Mexico. 
C)  the implicit costs of production for timber are higher in Canada than in Mexico. 
D)  the average cost of production for timber is lower in Canada than in Mexico.

Question 17

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

Accepted Answer

A)  both a U.S. and an Italian import. 
B)  a U.S. import and an Italian export. 
C)  a U.S. export and an Italian import. 
D)  neither an export nor an import for either country. 
A)  both a U.S. and an Italian import. 
B)  a U.S. import and an Italian export. 
C)  a U.S. export and an Italian import. 
D)  neither an export nor an import for either country.

Question 18

Figure 19-10
  
-Refer to Figure 19-10.Currency speculators believe that the value of the euro will decrease relative to the dollar.Assuming all else remains constant,how would this be represented?

Accepted Answer

A)  Supply would decrease, demand would decrease and the economy moves from B to C to D. 
B)  Supply would increase, demand would decrease and the economy moves from C to B to A. 
C)  Supply would decrease, demand would increase and the economy moves from A to D to C. 
D)  Supply would increase, demand would increase and the economy moves from D to A to B. 
A)  Supply would decrease, demand would decrease and the economy moves from B to C to D. 
B)  Supply would increase, demand would decrease and the economy moves from C to B to A. 
C)  Supply would decrease, demand would increase and the economy moves from A to D to C. 
D)  Supply would increase, demand would increase and the economy moves from D to A to B.

Question 19

Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

Accepted Answer

A)  support; benefits; creates 
B)  criticize; causes losses to; eliminates 
C)  support; lowers prices for; raises wages for 
D)  criticize; unfairly rewards; relocates 
A)  support; benefits; creates 
B)  criticize; causes losses to; eliminates 
C)  support; lowers prices for; raises wages for 
D)  criticize; unfairly rewards; relocates

Question 20

What are terms of trade?

Accepted Answer

Terms of trade refers to the r

Imposing trade barriers does all of the following except

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.With a quota in place,what is the quantity supplied by domestic producers?

Table 19-1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

What is the difference between imports and exports?

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by

Figure 19-1 Figure 19-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 19-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

Currency traders expect the value of the dollar to rise.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

What are the four main sources of comparative advantage? Briefly explain each source and provide examples.

Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets.This statement describes the ________ argument for protectionism.

Whenever a buyer and a seller agree to trade,both must believe they will be made better off

An expansionary monetary policy in the United States should

An appreciating yen makes Japanese products

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the area of domestic producer surplus after the imposition of a quota?

If Canada has a comparative advantage over Mexico in the production of timber,then

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

Figure 19-10 -Refer to Figure 19-10.Currency speculators believe that the value of the euro will decrease relative to the dollar.Assuming all else remains constant,how would this be represented?

Many economists protectionism because it consumers and jobs in domestic industries that use protected products.

What are terms of trade?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters

Exam 19: Comparative Advantage, International Trade, and Exchange Rates

Imposing trade barriers does all of the following except

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.With a quota in place,what is the quantity supplied by domestic producers?

Table 19-1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

What is the difference between imports and exports?

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by

Figure 19-1 Figure 19-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 19-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

Currency traders expect the value of the dollar to rise.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

What are the four main sources of comparative advantage? Briefly explain each source and provide examples.

Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets.This statement describes the ________ argument for protectionism.

Whenever a buyer and a seller agree to trade,both must believe they will be made better off

An expansionary monetary policy in the United States should

An appreciating yen makes Japanese products

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the area of domestic producer surplus after the imposition of a quota?

If Canada has a comparative advantage over Mexico in the production of timber,then

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

Figure 19-10 -Refer to Figure 19-10.Currency speculators believe that the value of the euro will decrease relative to the dollar.Assuming all else remains constant,how would this be represented?

Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

What are terms of trade?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters

Many economists protectionism because it consumers and jobs in domestic industries that use protected products.