Question 1

Economically speaking,tariffs:

Accepted Answer

A)  protect domestic consumers of goods. 
B)  protect foreign producers of goods. 
C)  limit voluntary exchanges. 
D)  protect domestic producers of exported goods. 
A)  protect domestic consumers of goods. 
B)  protect foreign producers of goods. 
C)  limit voluntary exchanges. 
D)  protect domestic producers of exported goods.

Question 2

Samoa could produce either 3 coconuts or 12 pineapples per worker,while Guam could produce either 5 coconuts or 20 pineapples per worker.In this situation:

Accepted Answer

A)  if trade occurs, both countries will be able to consume beyond their original production possibilities frontiers. 
B)  Guam will be better off if it exports coconuts and imports pineapples. 
C)  both Samoa and Guam will be better off if Samoa produces both coconuts and pineapples. 
D)  mutually beneficial trade cannot occur. 
A)  if trade occurs, both countries will be able to consume beyond their original production possibilities frontiers. 
B)  Guam will be better off if it exports coconuts and imports pineapples. 
C)  both Samoa and Guam will be better off if Samoa produces both coconuts and pineapples. 
D)  mutually beneficial trade cannot occur.

Question 3

A reduction in the tariff on imported steel would most likely benefit

Accepted Answer

A)  workers in the steel industry. 
B)  the domestic consumers of steel. 
C)  the domestic producers of steel. 
D)  foreign producers at the expense of domestic consumers. 
A)  workers in the steel industry. 
B)  the domestic consumers of steel. 
C)  the domestic producers of steel. 
D)  foreign producers at the expense of domestic consumers.

Question 4

Tariffs result in a decrease in consumer surplus because:

Accepted Answer

A)  the price and the quantity consumed of the protected good increases. 
B)  the price and the quantity consumed of the protected good decreases. 
C)  the price of the protected good increases and quantity consumed decreases. 
D)  the price of the protected good decreases and quantity consumed increases. 
A)  the price and the quantity consumed of the protected good increases. 
B)  the price and the quantity consumed of the protected good decreases. 
C)  the price of the protected good increases and quantity consumed decreases. 
D)  the price of the protected good decreases and quantity consumed increases.

Question 5

Exhibit 28-5   Refer to Exhibit 28-5.The change in producer surplus from free trade is equal to area:

Accepted Answer

A)  A + B + E 
B)  E + B + C + D 
C)  B 
D)  E + B 
A)  A + B + E 
B)  E + B + C + D 
C)  B 
D)  E + B

Question 6

How do subsidies distort trade patterns and lead to inefficiencies?

Accepted Answer

With subsidies,producers will export goo

Question 7

The main reason why one nation trades with another is to

Accepted Answer

A)  save its natural resources from rapid depletion. 
B)  exploit the advantages of specialization. 
C)  eliminate the danger of retaliation from other nations. 
D)  improve political alliances. 
A)  save its natural resources from rapid depletion. 
B)  exploit the advantages of specialization. 
C)  eliminate the danger of retaliation from other nations. 
D)  improve political alliances.

Question 8

When markets reach the ____ price all the opportunities for mutually beneficial trade have taken place and the sum of consumer and producer surplus is ____.

Accepted Answer

A)  minimum, maximized 
B)  maximum, minimized 
C)  equilibrium, maximized 
D)  equilibrium, shared equally between consumers and producers 
A)  minimum, maximized 
B)  maximum, minimized 
C)  equilibrium, maximized 
D)  equilibrium, shared equally between consumers and producers

Question 9

Trade contributes to prosperity because:

Accepted Answer

A)  every country lacks some vital resources that it can get economically only by trade. 
B)  each country's climate makes it a relatively efficient producer of some goods, and an inefficient producer of other goods. 
C)  each country's labor force makes it a relatively efficient producer of some goods, and an inefficient producer of other goods. 
D)  of all of the above. 
A)  every country lacks some vital resources that it can get economically only by trade. 
B)  each country's climate makes it a relatively efficient producer of some goods, and an inefficient producer of other goods. 
C)  each country's labor force makes it a relatively efficient producer of some goods, and an inefficient producer of other goods. 
D)  of all of the above.

Question 10

Dumping occurs when a foreign country sells its products at prices:

Accepted Answer

A)  below their costs. 
B)  below the prices for which they are sold in their domestic market. 
C)  higher than the price for which it is sold in their domestic market. 
D)  both (a) and (b) 
A)  below their costs. 
B)  below the prices for which they are sold in their domestic market. 
C)  higher than the price for which it is sold in their domestic market. 
D)  both (a) and (b)

Question 11

Exhibit 28-4   Refer to Exhibit 28-4.The change in consumer surplus from free trade is equal to area:

Accepted Answer

A)  A + B + C 
B)  - (B + 
C)  
C)  - (A + B + 
C)  
D)  - (E + F) 
A)  A + B + C 
B)  - (B + 
C)  
C)  - (A + B + 
C)  
D)  - (E + F)

Question 12

Which of the following is an argument made in support of tariffs and import quotas?

Accepted Answer

A)  protecting infant industries 
B)  promoting national defense 
C)  preventing product dumping 
D)  all of the above 
A)  protecting infant industries 
B)  promoting national defense 
C)  preventing product dumping 
D)  all of the above

Question 13

If the United States could produce 4 tons of potatoes or 2 tons of wheat per worker per year,while Ireland could produce 2 tons of potatoes or 3 tons of wheat per worker per year,the country with the comparative advantage in producing potatoes is ____ and the country with the absolute advantage in producing potatoes is ____.

Accepted Answer

A)  the United States; the United States 
B)  the United States; Ireland 
C)  Ireland; the United States 
D)  Ireland; Ireland 
A)  the United States; the United States 
B)  the United States; Ireland 
C)  Ireland; the United States 
D)  Ireland; Ireland

Question 14

In Bangladesh one person can produce 330 pounds of rice or 110 shirts in one year.In Singapore one person can produce 400 pounds of rice or 200 shirts in one year.Which of the following statements is true?

Accepted Answer

A)  Singapore has a comparative advantage in the production of rice. 
B)  Singapore has both an absolute and comparative advantage in the production of rice. 
C)  Bangladesh has a comparative advantage in the production of rice. 
D)  Bangladesh has an absolute advantage in the production of rice. 
A)  Singapore has a comparative advantage in the production of rice. 
B)  Singapore has both an absolute and comparative advantage in the production of rice. 
C)  Bangladesh has a comparative advantage in the production of rice. 
D)  Bangladesh has an absolute advantage in the production of rice.

Question 15

A tax levied on imported goods is called a(n)

Accepted Answer

A)  excise tax. 
B)  quota. 
C)  foreign profits tax. 
D)  tariff. 
A)  excise tax. 
B)  quota. 
C)  foreign profits tax. 
D)  tariff.

Question 16

Exhibit 28-6   Refer to Exhibit 28-6.After the tariff domestic producers gain area:

Accepted Answer

A)  C + G 
B)  C + A 
C)  C 
D)  B 
A)  C + G 
B)  C + A 
C)  C 
D)  B

Question 17

A tariff differs from a quota in that a tariff is

Accepted Answer

A)  levied on imports, whereas a quota is imposed on exports. 
B)  levied on exports, whereas a quota is imposed on imports. 
C)  a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. 
D)  a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported. 
A)  levied on imports, whereas a quota is imposed on exports. 
B)  levied on exports, whereas a quota is imposed on imports. 
C)  a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. 
D)  a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

Question 18

Suppose that in the absence of trade,the U.S.price for bicycles was higher than the world price for bicycles.Would allowing international trade,mean that the U.S.would import or export bicycles? Who in the U.S.would benefit and who would lose with a free trade policy,and would the gains be greater than the losses?

Accepted Answer

The U.S.would import bicycles,as consume

Question 19

Import quotas contribute to higher prices of products imported into the U.S.,but tariffs do not.

Accepted Answer

A) True 
 B)False

Question 20

What matters most in determining the efficient distribution of production over the world is

Accepted Answer

A)  absolute advantage. 
B)  efficiency. 
C)  the stock of resources. 
D)  comparative advantage. 
A)  absolute advantage. 
B)  efficiency. 
C)  the stock of resources. 
D)  comparative advantage.

Exam 28: International Trade

Economically speaking,tariffs:

Samoa could produce either 3 coconuts or 12 pineapples per worker,while Guam could produce either 5 coconuts or 20 pineapples per worker.In this situation:

A reduction in the tariff on imported steel would most likely benefit

Tariffs result in a decrease in consumer surplus because:

Exhibit 28-5 Refer to Exhibit 28-5.The change in producer surplus from free trade is equal to area:

How do subsidies distort trade patterns and lead to inefficiencies?

The main reason why one nation trades with another is to

When markets reach the ____ price all the opportunities for mutually beneficial trade have taken place and the sum of consumer and producer surplus is ____.

Trade contributes to prosperity because:

Dumping occurs when a foreign country sells its products at prices:

Exhibit 28-4 Refer to Exhibit 28-4.The change in consumer surplus from free trade is equal to area:

Which of the following is an argument made in support of tariffs and import quotas?

In Bangladesh one person can produce 330 pounds of rice or 110 shirts in one year.In Singapore one person can produce 400 pounds of rice or 200 shirts in one year.Which of the following statements is true?

A tax levied on imported goods is called a(n)

Exhibit 28-6 Refer to Exhibit 28-6.After the tariff domestic producers gain area:

A tariff differs from a quota in that a tariff is

Import quotas contribute to higher prices of products imported into the U.S.,but tariffs do not.

What matters most in determining the efficient distribution of production over the world is

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Finance

Filters

When markets reach the price all the opportunities for mutually beneficial trade have taken place and the sum of consumer and producer surplus is .