Question 1

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

Accepted Answer

A) True 
 B)False

Question 2

Explain whether it is possible for a country to have an absolute advantage in the production of a product without having a comparative advantage in the production of that product.

Accepted Answer

A country can have an absolute advantage

Question 3

Which of the following would cause the dollar to depreciate?

Accepted Answer

A)  an increase in the demand for dollars 
B)  a decrease in the demand for dollars 
C)  a decrease in the supply of dollars 
D)  a decrease in the demand for imports from foreign countries 
A)  an increase in the demand for dollars 
B)  a decrease in the demand for dollars 
C)  a decrease in the supply of dollars 
D)  a decrease in the demand for imports from foreign countries

Question 4

Table 19-12
Output per hour Production and Production
of work Consumption without Trade with Trade
 $\begin{array}{|c|c|c|c|c|c|c|}
\hline & \text { Swords } & \text { Belts } & \text { Swords } & \text { Belts } & \text { Swords } & \text { Belts } \
\hline \text { Estonia } & 5 & 3 & 100 & 40 & 200 & 0 \
\hline \text { Morocco } & 2 & 2 & 60 & 60 & 0 & 120 \
\hline
\end{array}$ Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 19-12 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-12.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many swords will Estonia gain compared to the "without trade" numbers?

Accepted Answer

A)  25 
B)  75 
C)  100 
D)  125 
A)  25 
B)  75 
C)  100 
D)  125

Question 5

Which of the following statements is false?

Accepted Answer

A)  Japan is less dependent on foreign trade than is the United States. 
B)  Imports and exports account for over one-half of the GDP of the Netherlands. 
C)  China is the leading exporting country, accounting for 12.1 percent of total world exports. 
D)  Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice, and corn crops. 
A)  Japan is less dependent on foreign trade than is the United States. 
B)  Imports and exports account for over one-half of the GDP of the Netherlands. 
C)  China is the leading exporting country, accounting for 12.1 percent of total world exports. 
D)  Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice, and corn crops.

Question 6

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then

Accepted Answer

A)  the average cost of production for sugar cane is lower in Brazil than in Cuba. 
B)  the implicit costs of production for sugar cane are lower in Brazil than in Cuba. 
C)  the opportunity cost of production for sugar cane is lower in Brazil than in Cuba. 
D)  the explicit cost of production for sugar cane is lower in Brazil than in Cuba. 
A)  the average cost of production for sugar cane is lower in Brazil than in Cuba. 
B)  the implicit costs of production for sugar cane are lower in Brazil than in Cuba. 
C)  the opportunity cost of production for sugar cane is lower in Brazil than in Cuba. 
D)  the explicit cost of production for sugar cane is lower in Brazil than in Cuba.

Question 7

The main purpose of most tariffs and quotas is to

Accepted Answer

A)  raise revenue for the government. 
B)  reduce the prices consumers pay for goods and services. 
C)  reduce the foreign competition that domestic firms face. 
D)  improve the quality of goods and services imported into the country. 
A)  raise revenue for the government. 
B)  reduce the prices consumers pay for goods and services. 
C)  reduce the foreign competition that domestic firms face. 
D)  improve the quality of goods and services imported into the country.

Question 8

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 value of revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Accepted Answer

A)  $12 million 
B)  $17.25 million 
C)  $20 million 
D)  $44 million 
A)  $12 million 
B)  $17.25 million 
C)  $20 million 
D)  $44 million

Question 9

Eliminating a tariff on running shoes would ________ businesses that sell running shoes and ________ consumers who purchase them.

Accepted Answer

A)  benefit; benefit 
B)  benefit; harm 
C)  harm; benefit 
D)  harm; harm 
A)  benefit; benefit 
B)  benefit; harm 
C)  harm; benefit 
D)  harm; harm

Question 10

Automobiles and many other products are differentiated.As a result

Accepted Answer

A)  different countries may each have a comparative advantage in producing different types of automobiles. 
B)  consumers of automobiles have difficulty deciding what type of imported automobile to buy. 
C)  the quality of imported automobiles is less than it could be. 
D)  we see countries specializing completely in the production of automobiles. 
A)  different countries may each have a comparative advantage in producing different types of automobiles. 
B)  consumers of automobiles have difficulty deciding what type of imported automobile to buy. 
C)  the quality of imported automobiles is less than it could be. 
D)  we see countries specializing completely in the production of automobiles.

Question 11

Which of the following is an example of a trade restriction?

Accepted Answer

A)  Japan places a tax on all Korean automobiles. 
B)  Domestic wine is more expensive than wine imported from Chile. 
C)  The United States, Canada, and Mexico sign the NAFTA agreement. 
D)  Consumers prefer German beer to domestic beer. 
A)  Japan places a tax on all Korean automobiles. 
B)  Domestic wine is more expensive than wine imported from Chile. 
C)  The United States, Canada, and Mexico sign the NAFTA agreement. 
D)  Consumers prefer German beer to domestic beer.

Question 12

Imports are goods and services bought domestically

Accepted Answer

A)  and produced domestically. 
B)  but produced in other countries. 
C)  and resold at a profit. 
D)  and not subject to tariffs. 
A)  and produced domestically. 
B)  but produced in other countries. 
C)  and resold at a profit. 
D)  and not subject to tariffs.

Question 13

________ raised average tariff rates by over 50 percent in the United States in 1930.

Accepted Answer

A)  The GATT 
B)  The WTO 
C)  NAFTA 
D)  The Smoot-Hawley Tariff 
A)  The GATT 
B)  The WTO 
C)  NAFTA 
D)  The Smoot-Hawley Tariff

Question 14

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 value of the deadweight loss as a result of the quota?

Accepted Answer

A)  $5.25 million 
B)  $8 million 
C)  $17.25 million 
D)  $20 million 
A)  $5.25 million 
B)  $8 million 
C)  $17.25 million 
D)  $20 million

Question 15

What does it mean for a country to have a comparative advantage in producing a product?

Accepted Answer

A country has a comparative ad

Question 16

Which of the following statements is true?

Accepted Answer

A)  Japan is more dependent on foreign trade than is the United States. 
B)  Imports and exports account for over one-half of the GDP of Belgium. 
C)  France is the leading exporting country, accounting for 10 percent of total world exports. 
D)  Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops. 
A)  Japan is more dependent on foreign trade than is the United States. 
B)  Imports and exports account for over one-half of the GDP of Belgium. 
C)  France is the leading exporting country, accounting for 10 percent of total world exports. 
D)  Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops.

Question 17

Figure 19-5
   Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 19-5 shows the impact of this tariff.
-Refer to Figure 19-5.The increase in domestic producer surplus as a result of the tariff is equal to

Accepted Answer

A)  $14.625 million. 
B)  $18 million. 
C)  $27 million. 
D)  $30.375 million. 
A)  $14.625 million. 
B)  $18 million. 
C)  $27 million. 
D)  $30.375 million.

Question 18

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 that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Accepted Answer

A)  I + J 
B)  E + I + J + M 
C)  I + J + K+ L 
D)  G + H + I + J 
A)  I + J 
B)  E + I + J + M 
C)  I + J + K+ L 
D)  G + H + I + J

Question 19

As a percentage of GDP,imports are greater than exports for which of the following countries?

Accepted Answer

A)  Germany 
B)  Italy 
C)  the Netherlands 
D)  the United States 
A)  Germany 
B)  Italy 
C)  the Netherlands 
D)  the United States

Question 20

Costa Rica is a leading exporter of bananas.What explains the comparative advantage of this country in banana production?

Accepted Answer

A)  climate and soil conditions in Costa Rica which are well-suited for banana production 
B)  investment by multinational firms such as Chiquita Brands International and the Dole Food Company 
C)  a large supply of unskilled labor 
D)  positive externalities 
A)  climate and soil conditions in Costa Rica which are well-suited for banana production 
B)  investment by multinational firms such as Chiquita Brands International and the Dole Food Company 
C)  a large supply of unskilled labor 
D)  positive externalities

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

Explain whether it is possible for a country to have an absolute advantage in the production of a product without having a comparative advantage in the production of that product.

Which of the following would cause the dollar to depreciate?

Which of the following statements is false?

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then

The main purpose of most tariffs and quotas is to

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 value of revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Eliminating a tariff on running shoes would businesses that sell running shoes and consumers who purchase them.

Automobiles and many other products are differentiated.As a result

Which of the following is an example of a trade restriction?

Imports are goods and services bought domestically

________ raised average tariff rates by over 50 percent in the United States in 1930.

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 value of the deadweight loss as a result of the quota?

What does it mean for a country to have a comparative advantage in producing a product?

Which of the following statements is true?

Figure 19-5 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 19-5 shows the impact of this tariff. -Refer to Figure 19-5.The increase in domestic producer surplus as a result of the tariff is equal to

As a percentage of GDP,imports are greater than exports for which of the following countries?

Costa Rica is a leading exporter of bananas.What explains the comparative advantage of this country in banana production?

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

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

Explain whether it is possible for a country to have an absolute advantage in the production of a product without having a comparative advantage in the production of that product.

Which of the following would cause the dollar to depreciate?

Which of the following statements is false?

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then

The main purpose of most tariffs and quotas is to

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 value of revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Eliminating a tariff on running shoes would ________ businesses that sell running shoes and ________ consumers who purchase them.

Automobiles and many other products are differentiated.As a result

Which of the following is an example of a trade restriction?

Imports are goods and services bought domestically

________ raised average tariff rates by over 50 percent in the United States in 1930.

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 value of the deadweight loss as a result of the quota?

What does it mean for a country to have a comparative advantage in producing a product?

Which of the following statements is true?

Figure 19-5 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 19-5 shows the impact of this tariff. -Refer to Figure 19-5.The increase in domestic producer surplus as a result of the tariff is equal to

As a percentage of GDP,imports are greater than exports for which of the following countries?

Costa Rica is a leading exporter of bananas.What explains the comparative advantage of this country in banana production?

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

Eliminating a tariff on running shoes would businesses that sell running shoes and consumers who purchase them.