Question 1

Under autarky,domestic producer surplus is represented by the area

Accepted Answer

A)  above the supply curve and below the equilibrium price. 
B)  above the supply curve and below the demand curve. 
C)  below the demand curve and above the equilibrium price. 
D)  above the demand curve and below the supply curve. 
A)  above the supply curve and below the equilibrium price. 
B)  above the supply curve and below the demand curve. 
C)  below the demand curve and above the equilibrium price. 
D)  above the demand curve and below the supply curve.

Question 2

A tariff is a tax imposed by a government on its own exports.

Accepted Answer

A) True 
 B)False

Question 3

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.In the U.S.steel market,the "Buy American" provision in the 2009 stimulus package would

Accepted Answer

A)  convert some consumer surplus to deadweight loss. 
B)  transfer some deadweight loss to producer surplus. 
C)  transfer some producer surplus to consumer surplus. 
D)  reduce the producer surplus received by foreign manufacturers. 
A)  convert some consumer surplus to deadweight loss. 
B)  transfer some deadweight loss to producer surplus. 
C)  transfer some producer surplus to consumer surplus. 
D)  reduce the producer surplus received by foreign manufacturers.

Question 4

In a September 2017 ruling, the U.S. International Trade Commission (ITC) found that imports of solar panels harmed U.S. manufacturers, opening the door for the Trump administration to impose tariffs on foreign solar panels and modules. The initial complaint to the ITC was filed in early 2017 by bankrupt solar panel manufacturer Suniva, who argued that a rapid increase in imports of inexpensive foreign product put U.S. manufacturers at risk. The decision was opposed by many in the solar panel industry, arguing that tariffs will hurt the industry as a whole. While Suniva commissioned a report that showed devastating job losses without industry protection, an independent analysis by Bloomberg New Energy Finance found a ruling for Suniva would, at most, only create 6,400 jobs and "downstream job losses would almost certainly exceed any manufacturing gains."
Source: Tom DiChristopher, " US trade agency rules imports harmed solar panel makers, setting up Trump tariff decision," cnbc.com, September 22, 2017.
-Refer to the Article Summary.All else equal,if the Trump administration declines to enact protectionist measures,such as a tariff,against foreign solar panels,the price of solar panels in the United States will be ________ than it would be with a tariff,and the quantity of solar panels demanded in the United States will be ________ than it would be with a tariff.

Accepted Answer

A)  higher; higher 
B)  lower; higher 
C)  higher; lower 
D)  lower; lower 
A)  higher; higher 
B)  lower; higher 
C)  higher; lower 
D)  lower; lower

Question 5

If Norwegian workers are more productive than Albanian workers,then trade between Norway and Albania

Accepted Answer

A)  cannot take place because Norwegian goods and services will be less expensive than Albanian goods and services. 
B)  will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want. 
C)  cannot take place until Albanian workers become more productive. 
D)  can take place only if Albania has an absolute advantage in producing a good or service Norwegian buyers want. 
A)  cannot take place because Norwegian goods and services will be less expensive than Albanian goods and services. 
B)  will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want. 
C)  cannot take place until Albanian workers become more productive. 
D)  can take place only if Albania has an absolute advantage in producing a good or service Norwegian buyers want.

Question 6

Which of the following statements is false?

Accepted Answer

A)  Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B)  Each year the United States exports about 50 percent of its wheat crop and 20 percent of its corn crop. 
C)  Most of the leading exporting countries are large, high-income countries. 
D)  Not all sectors of the U.S. economy are affected equally by international trade. 
A)  Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B)  Each year the United States exports about 50 percent of its wheat crop and 20 percent of its corn crop. 
C)  Most of the leading exporting countries are large, high-income countries. 
D)  Not all sectors of the U.S. economy are affected equally by international trade.

Question 7

A tariff

Accepted Answer

A)  makes domestic consumers worse off. 
B)  makes both domestic producers and consumers worse off. 
C)  makes everyone better off. 
D)  makes domestic producers worse off. 
A)  makes domestic consumers worse off. 
B)  makes both domestic producers and consumers worse off. 
C)  makes everyone better off. 
D)  makes domestic producers worse off.

Question 8

Figure 19-10
  
-Refer to Figure 19-10.The depreciation of the dollar is represented as a movement from

Accepted Answer

A)  B to A. 
B)  D to C. 
C)  B to C. 
D)  A to C. 
E)  A to B. 
A)  B to A. 
B)  D to C. 
C)  B to C. 
D)  A to C. 
E)  A to B.

Question 9

Globalization is the process of countries imposing trade restrictions on other countries.

Accepted Answer

A) True 
 B)False

Question 10

Table 19-5
 $\begin{array}{|l|l|l|}
\hline & \text { Empanadas } & \text { Tacos } \
\hline \text { Madison } & 30 & 50 \
\hline \text { Austin } & 24 & 32 \
\hline
\end{array}$ Madison and Austin own Cafe Ole'. Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
-Refer to Table 19-5.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Madison has an absolute advantage in making tacos and Austin has an absolute advantage in making empanadas. 
B)  Madison has an absolute advantage in making empanadas and Austin has an absolute advantage in making tacos. 
C)  Madison has an absolute advantage in making empanadas and tacos. 
D)  Austin has an absolute advantage in making empanadas and tacos. 
A)  Madison has an absolute advantage in making tacos and Austin has an absolute advantage in making empanadas. 
B)  Madison has an absolute advantage in making empanadas and Austin has an absolute advantage in making tacos. 
C)  Madison has an absolute advantage in making empanadas and tacos. 
D)  Austin has an absolute advantage in making empanadas and tacos.

Question 11

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.The "Buy American" provision would ________ consumer surplus and ________ producer surplus for industries that produced protected products in the United States.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 12

In the United States,imports and exports make up more than half of GDP.

Accepted Answer

A) True 
 B)False

Question 13

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 the deadweight loss as a result of the quota?

Accepted Answer

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

Question 14

Your roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States.Hansen

Accepted Answer

A)  is incorrect. Free trade raises living standards by increasing economic efficiency. 
B)  is right in asserting the need to protect high wages if the United States wishes to maintain its high standard of living. 
C)  is correct in arguing that the high wages of U.S. workers make it impossible to compete with workers in low-wage countries. 
D)  is advancing the anti-dumping argument for protectionism. 
A)  is incorrect. Free trade raises living standards by increasing economic efficiency. 
B)  is right in asserting the need to protect high wages if the United States wishes to maintain its high standard of living. 
C)  is correct in arguing that the high wages of U.S. workers make it impossible to compete with workers in low-wage countries. 
D)  is advancing the anti-dumping argument for protectionism.

Question 15

Dumping refers to countries exporting unwanted and inferior products to other countries.

Accepted Answer

A) True 
 B)False

Question 16

How does an increase in a country's exchange rate affect its balance of trade?

Accepted Answer

A)  An increase in the exchange rate raises imports, reduces exports, and reduces the balance of trade. 
B)  An increase in the exchange rate reduces imports, raises exports, and reduces the balance of trade. 
C)  An increase in the exchange rate reduces imports, raises exports, and increases the balance of trade. 
D)  An increase in the exchange rate raises imports, reduces exports, and increases the balance of trade. 
A)  An increase in the exchange rate raises imports, reduces exports, and reduces the balance of trade. 
B)  An increase in the exchange rate reduces imports, raises exports, and reduces the balance of trade. 
C)  An increase in the exchange rate reduces imports, raises exports, and increases the balance of trade. 
D)  An increase in the exchange rate raises imports, reduces exports, and increases the balance of trade.

Question 17

Imposing tariffs in cases of dumping

Accepted Answer

A)  is allowed under the WTO agreement. 
B)  is not allowed under the WTO agreement. 
C)  is not addressed by the WTO agreement. 
D)  has never occurred, even though it is allowed under the WTO agreement. 
A)  is allowed under the WTO agreement. 
B)  is not allowed under the WTO agreement. 
C)  is not addressed by the WTO agreement. 
D)  has never occurred, even though it is allowed under the WTO agreement.

Question 18

If the exchange rate changes from $2.00 = £1 to $2.01 = £1 then

Accepted Answer

A)  the dollar has depreciated. 
B)  the dollar has appreciated. 
C)  the British pound has depreciated. 
D)  the British pound has stayed constant in value. 
A)  the dollar has depreciated. 
B)  the dollar has appreciated. 
C)  the British pound has depreciated. 
D)  the British pound has stayed constant in value.

Question 19

Examples of comparative advantage often begin with two countries that each produce the same two goods.Each country is then shown to have a comparative advantage in producing the good it can produce at a lower opportunity cost,and specializes in the production of the good for which it has a comparative advantage.How do these examples prove that both nations are made better off as a result of trade than they would be without trade?

Accepted Answer

To show that both countries are better o

Question 20

Which of the following would cause the dollar to appreciate?

Accepted Answer

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

Under autarky,domestic producer surplus is represented by the area

A tariff is a tax imposed by a government on its own exports.

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.In the U.S.steel market,the "Buy American" provision in the 2009 stimulus package would

If Norwegian workers are more productive than Albanian workers,then trade between Norway and Albania

Which of the following statements is false?

A tariff

Figure 19-10 -Refer to Figure 19-10.The depreciation of the dollar is represented as a movement from

Globalization is the process of countries imposing trade restrictions on other countries.

Table 19-5 Empanadas Tacos Madison 30 50 Austin 24 32 Madison and Austin own Cafe Ole'. Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 19-5.Select the statement that accurately interprets the data in the table.

In the United States,imports and exports make up more than half of GDP.

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 the deadweight loss as a result of the quota?

Your roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States.Hansen

Dumping refers to countries exporting unwanted and inferior products to other countries.

How does an increase in a country's exchange rate affect its balance of trade?

Imposing tariffs in cases of dumping

If the exchange rate changes from $2.00 = £1 to $2.01 = £1 then

Which of the following would cause the dollar to appreciate?

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

Under autarky,domestic producer surplus is represented by the area

A tariff is a tax imposed by a government on its own exports.

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.In the U.S.steel market,the "Buy American" provision in the 2009 stimulus package would

If Norwegian workers are more productive than Albanian workers,then trade between Norway and Albania

Which of the following statements is false?

A tariff

Figure 19-10 -Refer to Figure 19-10.The depreciation of the dollar is represented as a movement from

Globalization is the process of countries imposing trade restrictions on other countries.

Table 19-5 Empanadas Tacos Madison 30 50 Austin 24 32 Madison and Austin own Cafe Ole'. Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 19-5.Select the statement that accurately interprets the data in the table.

In the United States,imports and exports make up more than half of GDP.

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 the deadweight loss as a result of the quota?

Your roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States.Hansen

Dumping refers to countries exporting unwanted and inferior products to other countries.

How does an increase in a country's exchange rate affect its balance of trade?

Imposing tariffs in cases of dumping

If the exchange rate changes from $2.00 = £1 to $2.01 = £1 then

Which of the following would cause the dollar to appreciate?

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