Question 1

One reason that international trade is restricted is that

Accepted Answer

A)  the individual gain to parties who benefit from the protection is much larger than the individual loss to parties who lose. 
B)  the government completely pays the losers from international trade for their losses. 
C)  protectionism benefits consumers. 
D)  the government cannot measure the cost of protectionism. 
A)  the individual gain to parties who benefit from the protection is much larger than the individual loss to parties who lose. 
B)  the government completely pays the losers from international trade for their losses. 
C)  protectionism benefits consumers. 
D)  the government cannot measure the cost of protectionism.

Question 2

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Accepted Answer

A)  Protectionism eliminates domestic jobs in export industries. 
B)  Imports create jobs in this country for people selling and servicing imported items. 
C)  The cost of saving domestic jobs through protectionism may be high. 
D)  all of the above 
A)  Protectionism eliminates domestic jobs in export industries. 
B)  Imports create jobs in this country for people selling and servicing imported items. 
C)  The cost of saving domestic jobs through protectionism may be high. 
D)  all of the above

Question 3

Which of the following is a valid reason for protecting an industry?

Accepted Answer

A)  The industry is unable to compete with low-wage foreign competitors. 
B)  Protection penalizes lax environmental standards. 
C)  Protection keeps richer nations from exploiting the workers of poorer countries. 
D)  None of the above reasons is a valid reason for protection. 
A)  The industry is unable to compete with low-wage foreign competitors. 
B)  Protection penalizes lax environmental standards. 
C)  Protection keeps richer nations from exploiting the workers of poorer countries. 
D)  None of the above reasons is a valid reason for protection.

Question 4

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In the figure above, international trade ________ total surplus in the United States by ________.

Accepted Answer

A)  increases; $128 million 
B)  decreases; $192 million 
C)  increases; $320 million 
D)  decreases; $256 million 
A)  increases; $128 million 
B)  decreases; $192 million 
C)  increases; $320 million 
D)  decreases; $256 million

Question 5

The Smoot-Hawley Act introduced

Accepted Answer

A)  opportunities for expanding U.S. foreign trade. 
B)  the highest tariffs set by the United States in the last 90 years. 
C)  a framework promoting international free trade. 
D)  revenue tariffs as a major source of U.S. government revenues. 
A)  opportunities for expanding U.S. foreign trade. 
B)  the highest tariffs set by the United States in the last 90 years. 
C)  a framework promoting international free trade. 
D)  revenue tariffs as a major source of U.S. government revenues.

Question 6

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed by ________ number of people.

Accepted Answer

A)  small; large 
B)  large; small 
C)  small; small 
D)  large; large 
A)  small; large 
B)  large; small 
C)  small; small 
D)  large; large

Question 7

When a group lobbies for the prevention of free trade, the most likely reason is

Accepted Answer

A)  rent seeking. 
B)  tariff revenue. 
C)  defense against expensive domestic labor. 
D)  preservation of the environment. 
A)  rent seeking. 
B)  tariff revenue. 
C)  defense against expensive domestic labor. 
D)  preservation of the environment.

Question 8

If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports.

Accepted Answer

A)  raises; decreases 
B)  raises; increases 
C)  raises; does not change 
D)  lowers; does not change 
A)  raises; decreases 
B)  raises; increases 
C)  raises; does not change 
D)  lowers; does not change

Question 9

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter.
-In the figure above, the United States ________ helicopters per year.

Accepted Answer

A)  exports 480 
B)  exports 720 
C)  imports 480 
D)  imports 240 
A)  exports 480 
B)  exports 720 
C)  imports 480 
D)  imports 240

Question 10

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

Accepted Answer

A) True 
 B)False

Question 11

A tariff imposed by the United States on Japanese cars ________ the price of cars in the United States and ________ the quantity of Japanese cars imported into the United States.

Accepted Answer

A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases 
A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases

Question 12

Rent seeking is one reason why countries choose to

Accepted Answer

A)  restrict trade. 
B)  export and import the same goods. 
C)  work for freer trade. 
D)  follow the theory of comparative advantage. 
A)  restrict trade. 
B)  export and import the same goods. 
C)  work for freer trade. 
D)  follow the theory of comparative advantage.

Question 13

A reason tariffs and quotas are imposed is that

Accepted Answer

A)  their costs are spread among many people and their benefits are concentrated. 
B)  their costs are concentrated and their benefits are spread among many people. 
C)  they create net benefits in the long run. 
D)  they reduce import dependence. 
A)  their costs are spread among many people and their benefits are concentrated. 
B)  their costs are concentrated and their benefits are spread among many people. 
C)  they create net benefits in the long run. 
D)  they reduce import dependence.

Question 14

Some observers opposing free trade argue that when we buy shoes from Brazil, U.S. workers lose their jobs. The fact of the matter is that

Accepted Answer

A)  no U.S. worker has actually lost a job because of free trade. 
B)  most jobs lost because of free trade pay less than the poverty level. 
C)  free trade creates jobs in export industries. 
D)  the jobs lost are really in Brazil. 
A)  no U.S. worker has actually lost a job because of free trade. 
B)  most jobs lost because of free trade pay less than the poverty level. 
C)  free trade creates jobs in export industries. 
D)  the jobs lost are really in Brazil.

Question 15

In 2008, Agriculture Secretary Ed Schafer announced that Chile's Livestock and Agricultural Service approved the U.S. inspection, control and certification systems for poultry, allowing these products to enter the Chilean market. The effect of this change in Chilean policy in the Chilean poultry market is to

Accepted Answer

A)  increase Chilean consumer surplus. 
B)  increase Chilean producer surplus. 
C)  decrease Chilean total surplus. 
D)  have no effect in the Chilean poultry market. 
A)  increase Chilean consumer surplus. 
B)  increase Chilean producer surplus. 
C)  decrease Chilean total surplus. 
D)  have no effect in the Chilean poultry market.

Question 16

When considering rent seeking, which of the following is TRUE?

Accepted Answer

A)  The anti-free trade group generally will lobby more than the pro-free trade group. 
B)  The pro-free trade group generally will lobby more than the anti-free trade group. 
C)  Usually only the anti-free trade group is concerned about what is best for society at large. 
D)  Only the pro-free trade group is concerned about the government's revenue from tariffs. 
A)  The anti-free trade group generally will lobby more than the pro-free trade group. 
B)  The pro-free trade group generally will lobby more than the anti-free trade group. 
C)  Usually only the anti-free trade group is concerned about what is best for society at large. 
D)  Only the pro-free trade group is concerned about the government's revenue from tariffs.

Question 17

Lowering the tariff on imported ethanol

Accepted Answer

A)  increases domestic employment in the ethanol industry. 
B)  increases the imports of ethanol. 
C)  increases the domestic price of ethanol. 
D)  has no effect unless the nation's trading partner also lowers its tariff on ethanol. 
A)  increases domestic employment in the ethanol industry. 
B)  increases the imports of ethanol. 
C)  increases the domestic price of ethanol. 
D)  has no effect unless the nation's trading partner also lowers its tariff on ethanol.

Question 18

In developing countries, there is more reliance on ________ as opposed to ________ for government revenue.

Accepted Answer

A)  tariffs; tax collection 
B)  quotas; tariffs 
C)  tax collection; tariffs 
D)  tariffs; quotas 
A)  tariffs; tax collection 
B)  quotas; tariffs 
C)  tax collection; tariffs 
D)  tariffs; quotas

Question 19

Which of the following statements concerning tariffs is NOT true?

Accepted Answer

A)  A tariff results in a deadweight loss. 
B)  A tariff creates revenue for the government. 
C)  A tariff decreases international trade. 
D)  A tariff leaves the price of imports unchanged. 
A)  A tariff results in a deadweight loss. 
B)  A tariff creates revenue for the government. 
C)  A tariff decreases international trade. 
D)  A tariff leaves the price of imports unchanged.

Question 20

Most economists agree that valid reasons for protecting trade include which of the following? I. The economies of scale argument
II) The saving jobs argument
III) The protection of high wages argument

Accepted Answer

A)  I only 
B)  I and II 
C)  I and III 
D)  None of the reasons are valid. 
A)  I only 
B)  I and II 
C)  I and III 
D)  None of the reasons are valid.

One reason that international trade is restricted is that

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Which of the following is a valid reason for protecting an industry?

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, international trade total surplus in the United States by .

The Smoot-Hawley Act introduced

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed by number of people.

When a group lobbies for the prevention of free trade, the most likely reason is

If a country imposes a tariff on an imported good, the tariff the price in the importing country and the quantity of imports.

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

A tariff imposed by the United States on Japanese cars the price of cars in the United States and the quantity of Japanese cars imported into the United States.

Rent seeking is one reason why countries choose to

A reason tariffs and quotas are imposed is that

Some observers opposing free trade argue that when we buy shoes from Brazil, U.S. workers lose their jobs. The fact of the matter is that

When considering rent seeking, which of the following is TRUE?

Lowering the tariff on imported ethanol

In developing countries, there is more reliance on as opposed to for government revenue.

Which of the following statements concerning tariffs is NOT true?

Most economists agree that valid reasons for protecting trade include which of the following? I. The economies of scale argument II) The saving jobs argument III) The protection of high wages argument

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 7: Global Markets in Action

One reason that international trade is restricted is that

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Which of the following is a valid reason for protecting an industry?

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, international trade ________ total surplus in the United States by ________.

The Smoot-Hawley Act introduced

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed by ________ number of people.

When a group lobbies for the prevention of free trade, the most likely reason is

If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports.

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

A tariff imposed by the United States on Japanese cars ________ the price of cars in the United States and ________ the quantity of Japanese cars imported into the United States.

Rent seeking is one reason why countries choose to

A reason tariffs and quotas are imposed is that

Some observers opposing free trade argue that when we buy shoes from Brazil, U.S. workers lose their jobs. The fact of the matter is that

When considering rent seeking, which of the following is TRUE?

Lowering the tariff on imported ethanol

In developing countries, there is more reliance on ________ as opposed to ________ for government revenue.

Which of the following statements concerning tariffs is NOT true?

Most economists agree that valid reasons for protecting trade include which of the following? I. The economies of scale argument II) The saving jobs argument III) The protection of high wages argument

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, international trade total surplus in the United States by .

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed by number of people.

If a country imposes a tariff on an imported good, the tariff the price in the importing country and the quantity of imports.

A tariff imposed by the United States on Japanese cars the price of cars in the United States and the quantity of Japanese cars imported into the United States.

In developing countries, there is more reliance on as opposed to for government revenue.