Question 1

If Nepal is a net importer of computers, free trade will hurt the

Accepted Answer

A) domestic producers of computers. 
B) rich citizens of Nepal. 
C) poor citizens of Nepal. 
D) domestic consumers of computers. 
A) domestic producers of computers. 
B) rich citizens of Nepal. 
C) poor citizens of Nepal. 
D) domestic consumers of computers. A

Question 2

If this is an open economy, the price of a car will be ________.

Accepted Answer

A) $6,000/car 
B) $8,000/car 
C) $10,000/car 
D) $14,000/car 
A) $6,000/car 
B) $8,000/car 
C) $10,000/car 
D) $14,000/car C

Question 3

The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year.   Art's opportunity cost of producing one computer is ________ pounds of beef.

Accepted Answer

A) 1/50 
B) 1/100 
C) 50 
D) 100 
A) 1/50 
B) 1/100 
C) 50 
D) 100 D

Question 4

The demand for microwaves in a certain country is given by: D = 8,000 -30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, and the government imposes a tariff of $30 per microwave, then this country will ________ microwaves.

Accepted Answer

A) import 400 
B) import 800 
C) export 800 
D) export 
A) import 400 
B) import 800 
C) export 800 
D) export

Question 5

Suppose a government is considering imposing either a tariff or a quota on imported grain, and either policy will result in exactly 750 tons of grain being imported. How do these policies differ?

Accepted Answer

A) The price of grain under the tariff will be higher than the price under the quota. 
B) The price of grain under the quota will be higher than the price under the tariff. 
C) Domestic production will be higher with the quota than with the tariff. 
D) The quota will generate revenue for the firms that hold import licenses, while the tariff will generate revenue for the government. 
A) The price of grain under the tariff will be higher than the price under the quota. 
B) The price of grain under the quota will be higher than the price under the tariff. 
C) Domestic production will be higher with the quota than with the tariff. 
D) The quota will generate revenue for the firms that hold import licenses, while the tariff will generate revenue for the government.

Question 6

In an open economy, the quantity demanded of TVs in the domestic market will be ________.

Accepted Answer

A) 30,000 
B) 60,000 
C) 90,000 
D) 120,000 
A) 30,000 
B) 60,000 
C) 90,000 
D) 120,000

Question 7

The country Happy Land claims that it is producing everything its citizens consume. This situation is called

Accepted Answer

A) a closed economy. 
B) an open economy. 
C) protectionism. 
D) autarky. 
A) a closed economy. 
B) an open economy. 
C) protectionism. 
D) autarky.

Question 8

After the imposition of the quota, the numbers of TVs imported will drop by ________ units.

Accepted Answer

A) 20,000 
B) 40,000 
C) 80,000 
D) 100,000 
A) 20,000 
B) 40,000 
C) 80,000 
D) 100,000

Question 9

If this is an open economy, quantity of cars demanded domestically will be ________.

Accepted Answer

A) 20,000 
B) 40,000 
C) 60,000 
D) 80,000 
A) 20,000 
B) 40,000 
C) 60,000 
D) 80,000

Question 10

The demand for microwaves in a certain country is given by: D = 8,000 - 30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, the domestic quantity demanded will be ________ and quantity supplied will be ________.

Accepted Answer

A) 5,000; 5,000 
B) 6,000; 4,000 
C) 6,500; 3,000 
D) 6,500; 4,500 
A) 5,000; 5,000 
B) 6,000; 4,000 
C) 6,500; 3,000 
D) 6,500; 4,500

Question 11

The demand for microwaves in a certain country is given by: D = 8,000 - 30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, and the government imposes a tariff of $30 per microwave, then the domestic quantity demanded will be ________ microwaves.

Accepted Answer

A) 4,000 
B) 4,500 
C) 5,000 
D) 5,600 
A) 4,000 
B) 4,500 
C) 5,000 
D) 5,600

Question 12

If the opportunity cost of producing a good domestically is less than the opportunity cost of purchasing it on the world market, a country can gain by

Accepted Answer

A) increasing production and decreasing imports. 
B) increasing production and decreasing exports. 
C) decreasing production and increasing exports. 
D) decreasing production and increasing imports. 
A) increasing production and decreasing imports. 
B) increasing production and decreasing exports. 
C) decreasing production and increasing exports. 
D) decreasing production and increasing imports.

Question 13

China exports toys to the United States; in a closed economy China must have a domestic price that is ________ the world price of toys.

Accepted Answer

A) less than 
B) greater than 
C) equal to 
D) close to 
A) less than 
B) greater than 
C) equal to 
D) close to

Question 14

The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3,000 cars to be imported, then domestic equilibrium quantity of cars will be ________.

Accepted Answer

A) 6,000 
B) 8,000 
C) 10,000 
D) 12,000 
A) 6,000 
B) 8,000 
C) 10,000 
D) 12,000

Question 15

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. ________ has the comparative advantage in TVs and ________ has the comparative advantage in radios.

Accepted Answer

A) Jen; Jen 
B) Rich; Rich 
C) Jen; Rich 
D) Rich; Jen 
A) Jen; Jen 
B) Rich; Rich 
C) Jen; Rich 
D) Rich; Jen

Question 16

If this is a closed economy, the price of a TV will be ________.

Accepted Answer

A) $75 
B) $125 
C) $175 
D) $275 
A) $75 
B) $125 
C) $175 
D) $275

Question 17

If Utopia has a closed economy, the number of cases of tile consumed each is ________ per year, and if it has an open economy the number of cases of tile consumed is ________ per year.

Accepted Answer

A) 200; 450 
B) 300; 200 
C) 300; 450 
D) 450; 200 
A) 200; 450 
B) 300; 200 
C) 300; 450 
D) 450; 200

Question 18

How many cars will this country import in an open economy situation?

Accepted Answer

A) 20,000 
B) 40,000 
C) 60,000 
D) 80,000 
A) 20,000 
B) 40,000 
C) 60,000 
D) 80,000

Question 19

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Rich to produce one TV?

Accepted Answer

A) 1/5 radio 
B) 1/3 radio 
C) 3 radios 
D) 12 radios 
A) 1/5 radio 
B) 1/3 radio 
C) 3 radios 
D) 12 radios

Question 20

The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Karl.   The slope of the PPC between points X and Y is determined by ________ opportunity cost.

Accepted Answer

A) Janna's 
B) Drew's 
C) Kari's 
D) Janna and Drew's 
A) Janna's 
B) Drew's 
C) Kari's 
D) Janna and Drew's

Exam 15: International Trade and Trade Policy

If Nepal is a net importer of computers, free trade will hurt the

If this is an open economy, the price of a car will be ________.

Suppose a government is considering imposing either a tariff or a quota on imported grain, and either policy will result in exactly 750 tons of grain being imported. How do these policies differ?

In an open economy, the quantity demanded of TVs in the domestic market will be ________.

The country Happy Land claims that it is producing everything its citizens consume. This situation is called

After the imposition of the quota, the numbers of TVs imported will drop by ________ units.

If this is an open economy, quantity of cars demanded domestically will be ________.

If the opportunity cost of producing a good domestically is less than the opportunity cost of purchasing it on the world market, a country can gain by

China exports toys to the United States; in a closed economy China must have a domestic price that is ________ the world price of toys.

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. ________ has the comparative advantage in TVs and ________ has the comparative advantage in radios.

If this is a closed economy, the price of a TV will be ________.

If Utopia has a closed economy, the number of cases of tile consumed each is ________ per year, and if it has an open economy the number of cases of tile consumed is ________ per year.

How many cars will this country import in an open economy situation?

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Rich to produce one TV?

The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Karl. The slope of the PPC between points X and Y is determined by ________ opportunity cost.

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. has the comparative advantage in TVs and has the comparative advantage in radios.

If Utopia has a closed economy, the number of cases of tile consumed each is per year, and if it has an open economy the number of cases of tile consumed is per year.