Question 1

If the domestic consumers of a good benefit from free trade, it suggests that the country:

Accepted Answer

A) is a net importer of that good. 
B) is a net exporter of that good. 
C) has a comparative advantage in that good. 
D) is not able to produce that good. 
A) is a net importer of that good. 
B) is a net exporter of that good. 
C) has a comparative advantage in that good. 
D) is not able to produce that good.

Question 2

Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Amy should specialize in producing

Accepted Answer

A) both cheese and cars. 
B) cheese. 
C) cars. 
D) neither cheese nor cars. 
A) both cheese and cars. 
B) cheese. 
C) cars. 
D) neither cheese nor cars.

Question 3

In an open economy, how many bikes will this country export?

Accepted Answer

A) 20,000 
B) 50,000 
C) 60,000 
D) 80,000 
A) 20,000 
B) 50,000 
C) 60,000 
D) 80,000

Question 4

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 radio?

Accepted Answer

A) 1/12 TV 
B) 1/6 TV 
C) 1/3 TV 
D) 4 TVs 
A) 1/12 TV 
B) 1/6 TV 
C) 1/3 TV 
D) 4 TVs

Question 5

If a society's consumption possibilities are identical to its production possibilities that society has

Accepted Answer

A) a closed economy. 
B) an open economy. 
C) a two-person economy. 
D) a free trade policy. 
A) a closed economy. 
B) an open economy. 
C) a two-person economy. 
D) a free trade policy.

Question 6

In general, a nation can enjoy a higher standard of living by ________ than by being self sufficient.

Accepted Answer

A) increasing its versatility 
B) avoiding trade with other nations 
C) specialization and trading 
D) taxing imported goods 
A) increasing its versatility 
B) avoiding trade with other nations 
C) specialization and trading 
D) taxing imported goods

Question 7

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 most of each type that can be produced per day if each worker fully specializes according to his/her comparative advantage?

Accepted Answer

A) 2 TVs and 6 radios 
B) 3 TVs and 8 radios 
C) 4 TVs and 10 radios 
D) 5 TVs and 12 radios 
A) 2 TVs and 6 radios 
B) 3 TVs and 8 radios 
C) 4 TVs and 10 radios 
D) 5 TVs and 12 radios

Question 8

In an open economy, the quantity supplied of bikes in the domestic market is ________.

Accepted Answer

A) 20,000 
B) 50,000 
C) 80,000 
D) 100,000 
A) 20,000 
B) 50,000 
C) 80,000 
D) 100,000

Question 9

If the domestic producers of a good are hurt by a free trade, it suggests that the country:

Accepted Answer

A) is a net importer of that good. 
B) is a net exporter of that good. 
C) has a comparative advantage in that good. 
D) is not able to produce that good. 
A) is a net importer of that good. 
B) is a net exporter of that good. 
C) has a comparative advantage in that good. 
D) is not able to produce that good.

Question 10

Protectionism is the view that:

Accepted Answer

A) a country's free trade agreements should be enforced. 
B) free trade is harmful and should be restricted. 
C) a country can best defend itself against foreign attack if it opens itself to trade. 
D) free trade agreements best protect a nation's economic interests. 
A) a country's free trade agreements should be enforced. 
B) free trade is harmful and should be restricted. 
C) a country can best defend itself against foreign attack if it opens itself to trade. 
D) free trade agreements best protect a nation's economic interests.

Question 11

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 Y and Z 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

Question 12

Relative to a closed economy, if Utopia opened itself to trade, domestic tile producers would

Accepted Answer

A) produce 150 more cases of tile. 
B) produce 150 fewer cases of tile. 
C) produce 100 fewer cases of tile. 
D) produce the same amount of tile. 
A) produce 150 more cases of tile. 
B) produce 150 fewer cases of tile. 
C) produce 100 fewer cases of tile. 
D) produce the same amount of tile.

Question 13

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. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________.

Accepted Answer

A) TVs; radios 
B) TVs; TVs 
C) radios; TVs 
D) radios; both goods 
A) TVs; radios 
B) TVs; TVs 
C) radios; TVs 
D) radios; both goods

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 the winners are ________.

Accepted Answer

A) domestic consumers 
B) domestic consumers and import permit holders 
C) domestic producers and the government 
D) domestic producers and import permit holders 
A) domestic consumers 
B) domestic consumers and import permit holders 
C) domestic producers and the government 
D) domestic producers and import permit holders

Question 15

If the domestic producers of a good benefit from free trade, it suggests that the country:

Accepted Answer

A) is a net importer of that good. 
B) is a net exporter of that good. 
C) does not have an absolute advantage in that good. 
D) does not have a comparative advantage in that good. 
A) is a net importer of that good. 
B) is a net exporter of that good. 
C) does not have an absolute advantage in that good. 
D) does not have a comparative advantage in that good.

Question 16

Opening this economy to trade would benefit ________ and harm ________.

Accepted Answer

A) everyone; no one 
B) no one; everyone 
C) domestic car consumers; domestic car producers 
D) domestic car producers; domestic car consumers 
A) everyone; no one 
B) no one; everyone 
C) domestic car consumers; domestic car producers 
D) domestic car producers; domestic car consumers

Question 17

An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Paula to produce one shirt?

Accepted Answer

A) ¼ computer 
B) ½ computer 
C) 2 computers 
D) 4 computers 
A) ¼ computer 
B) ½ computer 
C) 2 computers 
D) 4 computers

Question 18

In an open economy, a society's consumption possibilities are typically ________ its production possibilities.

Accepted Answer

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

Question 19

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, how many microwaves will be imported or exported?

Accepted Answer

A) 1,000 imported 
B) 2,000 imported 
C) 3,000 exported 
D) 2,000 exported 
A) 1,000 imported 
B) 2,000 imported 
C) 3,000 exported 
D) 2,000 exported

Question 20

In an open economy, the quantity demanded of corn in the domestic market is ________.

Accepted Answer

A) 150 million bushels 
B) 300 million bushels 
C) 600 million bushels 
D) 900 million bushels 
A) 150 million bushels 
B) 300 million bushels 
C) 600 million bushels 
D) 900 million bushels

Exam 15: International Trade and Trade Policy

If the domestic consumers of a good benefit from free trade, it suggests that the country:

Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Amy should specialize in producing

In an open economy, how many bikes will this country export?

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 radio?

If a society's consumption possibilities are identical to its production possibilities that society has

In general, a nation can enjoy a higher standard of living by ________ than by being self sufficient.

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 most of each type that can be produced per day if each worker fully specializes according to his/her comparative advantage?

In an open economy, the quantity supplied of bikes in the domestic market is ________.

If the domestic producers of a good are hurt by a free trade, it suggests that the country:

Protectionism is the view that:

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 Y and Z is determined by ________ opportunity cost.

Relative to a closed economy, if Utopia opened itself to trade, domestic tile producers would

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. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________.

If the domestic producers of a good benefit from free trade, it suggests that the country:

Opening this economy to trade would benefit ________ and harm ________.

An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Paula to produce one shirt?

In an open economy, a society's consumption possibilities are typically ________ its production possibilities.

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, how many microwaves will be imported or exported?

In an open economy, the quantity demanded of corn in the domestic market is ________.

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. To maximize total output, Jen should specialize in producing while Rich should specialize in producing .

Opening this economy to trade would benefit and harm .