Question 1

________ occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

Accepted Answer

A)  Dumping 
B)  Comparative advantage 
C)  Learning-by-doing 
D)  A tariff 
A)  Dumping 
B)  Comparative advantage 
C)  Learning-by-doing 
D)  A tariff

Question 2

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

Accepted Answer

A)  creating new jobs to hire workers who lost their jobs because of NAFTA. 
B)  setting aside funds to support and retrain workers who lost their jobs because of NAFTA. 
C)  reducing tariffs. 
D)  imposing quotas. 
A)  creating new jobs to hire workers who lost their jobs because of NAFTA. 
B)  setting aside funds to support and retrain workers who lost their jobs because of NAFTA. 
C)  reducing tariffs. 
D)  imposing quotas.

Question 3

How does a tariff affect the government's revenue? How does a quota affect the government's revenue?

Accepted Answer

A tariff is a tax on an imported good. L

Question 4

Export subsidies are

Accepted Answer

A)  payments by the government to producers of exported goods. 
B)  similar to voluntary export restraints. 
C)  illegal. 
D)  Both answers A and C are correct. 
A)  payments by the government to producers of exported goods. 
B)  similar to voluntary export restraints. 
C)  illegal. 
D)  Both answers A and C are correct.

Question 5

U.S. tariffs peaked in

Accepted Answer

A)  1992. 
B)  1961. 
C)  1940. 
D)  1933. 
A)  1992. 
B)  1961. 
C)  1940. 
D)  1933.

Question 6

An assumption behind the infant-industry argument for tariff protection is that

Accepted Answer

A)  foreign competitors are selling output below average cost. 
B)  the domestic industry will be facing an upward adjustment in its average cost. 
C)  the domestic industry will eventually gain a comparative advantage in producing the good. 
D)  the market needs additional competition to satisfy consumer demand. 
A)  foreign competitors are selling output below average cost. 
B)  the domestic industry will be facing an upward adjustment in its average cost. 
C)  the domestic industry will eventually gain a comparative advantage in producing the good. 
D)  the market needs additional competition to satisfy consumer demand.

Question 7

Dumping occurs when a foreign firm ________.

Accepted Answer

A)  pollutes international waters 
B)  disposes of waste material internationally 
C)  sells inferior output to foreigners 
D)  sells its exports at a lower price than its cost of production 
A)  pollutes international waters 
B)  disposes of waste material internationally 
C)  sells inferior output to foreigners 
D)  sells its exports at a lower price than its cost of production

Question 8

What are the effects of a tariff?

Accepted Answer

A tariff is a tax on goods that are impo

Question 9

A tariff is

Accepted Answer

A)  a government imposed limit on the amount of a good that can be exported from a nation. 
B)  a government imposed barrier that sets a fixed limit on the amount of a good that can be imported into a nation. 
C)  a tax on a good imported into a nation. 
D)  an agreement between governments to limit exports from a nation. 
A)  a government imposed limit on the amount of a good that can be exported from a nation. 
B)  a government imposed barrier that sets a fixed limit on the amount of a good that can be imported into a nation. 
C)  a tax on a good imported into a nation. 
D)  an agreement between governments to limit exports from a nation.

Question 10

If a tariff is imposed, the price paid by domestic consumers will ________ and the amount imported will ________.

Accepted Answer

A)  increase; decrease 
B)  increase; not change 
C)  not change; increase 
D)  increase; increase 
A)  increase; decrease 
B)  increase; not change 
C)  not change; increase 
D)  increase; increase

Question 11

Comparative advantage implies that a country will

Accepted Answer

A)  import those goods in which the country has a comparative advantage. 
B)  export those goods in which the country has a comparative advantage. 
C)  import those goods in which the country has an absolute advantage compared to its trading partner. 
D)  export those goods in which the country has an absolute advantage compared to its trading partner. 
A)  import those goods in which the country has a comparative advantage. 
B)  export those goods in which the country has a comparative advantage. 
C)  import those goods in which the country has an absolute advantage compared to its trading partner. 
D)  export those goods in which the country has an absolute advantage compared to its trading partner.

Question 12

A key difference between a quota and a tariff is that

Accepted Answer

A)  a quota has a larger effect on quantity than on price. 
B)  a tariff has a larger effect on quantity than on price. 
C)  the government of the importing country gains revenue from a tariff, but the price gap caused by a quota benefits domestic importers. 
D)  All of the above answers are correct. 
A)  a quota has a larger effect on quantity than on price. 
B)  a tariff has a larger effect on quantity than on price. 
C)  the government of the importing country gains revenue from a tariff, but the price gap caused by a quota benefits domestic importers. 
D)  All of the above answers are correct.

Question 13

Which of the following statements about U.S. international trade in 2013 is CORRECT?

Accepted Answer

A)  The value of U.S. exports exceeded the value of U.S. imports. 
B)  The value of U.S. exports was about 33 percent of the value of total U.S. production. 
C)  The United States imported only goods. 
D)  The United States was the world's largest trader. 
A)  The value of U.S. exports exceeded the value of U.S. imports. 
B)  The value of U.S. exports was about 33 percent of the value of total U.S. production. 
C)  The United States imported only goods. 
D)  The United States was the world's largest trader.

Question 14

In industrial 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 15

The European Union imports bananas from Latin America as well as imports from Europe's former colonies in the African, Caribbean and Pacific (ACP)group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

Accepted Answer

A)  European consumers are better off with tariff than with free trade. 
B)  For European consumers, the price of ACP bananas is lower than Latin American bananas. 
C)  The gain from free trade is decreased because of banana tariffs. 
D)  The price European consumers pay for bananas is higher with the tariff than the free trade price. 
A)  European consumers are better off with tariff than with free trade. 
B)  For European consumers, the price of ACP bananas is lower than Latin American bananas. 
C)  The gain from free trade is decreased because of banana tariffs. 
D)  The price European consumers pay for bananas is higher with the tariff than the free trade price.

Question 16

The U.S. government imposes an import quota on sugar. This import quota helps ________ and harms ________.

Accepted Answer

A)  U.S. producers of sugar; U.S. consumers of sugar 
B)  U.S. producers of sugar; the U.S. government 
C)  the U.S. government; U.S. consumers of sugar 
D)  U.S. consumers of sugar; U.S. producers of sugar 
A)  U.S. producers of sugar; U.S. consumers of sugar 
B)  U.S. producers of sugar; the U.S. government 
C)  the U.S. government; U.S. consumers of sugar 
D)  U.S. consumers of sugar; U.S. producers of sugar

Question 17

Suppose the world price of a good is $4. Based on the table below, the country will

Accepted Answer

A)  import 20 units. 
B)  export 20 units. 
C)  import 10 units. 
D)  export 10 units. 
A)  import 20 units. 
B)  export 20 units. 
C)  import 10 units. 
D)  export 10 units.

Question 18

Which of the following are reasons economists consider valid for trade protection?
I.Protection penalizes countries that have weak environmental standards.
II.Protection limits dumping of low-wage jobs into the domestic economy.
III.Protection prevents low-wage jobs in foreign countries from lowering wages in the United States.

Accepted Answer

A)  I and II 
B)  II and III 
C)  I, II, and III 
D)  none of the above 
A)  I and II 
B)  II and III 
C)  I, II, and III 
D)  none of the above

Question 19

Economists usually agree with which of the following arguments that favor protectionism?

Accepted Answer

A)  the competition with cheap foreign labor defense 
B)  the job protection defense 
C)  the anti-dumping defense 
D)  Economists in general do not agree with any of the arguments in favor of protectionism. 
A)  the competition with cheap foreign labor defense 
B)  the job protection defense 
C)  the anti-dumping defense 
D)  Economists in general do not agree with any of the arguments in favor of protectionism.

Question 20

The Smoot-Hawley Act was enacted in

Accepted Answer

A)  1980. 
B)  2000. 
C)  1930. 
D)  1950. 
A)  1980. 
B)  2000. 
C)  1930. 
D)  1950.

________ occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

How does a tariff affect the government's revenue? How does a quota affect the government's revenue?

Export subsidies are

U.S. tariffs peaked in

An assumption behind the infant-industry argument for tariff protection is that

Dumping occurs when a foreign firm ________.

What are the effects of a tariff?

A tariff is

If a tariff is imposed, the price paid by domestic consumers will and the amount imported will .

Comparative advantage implies that a country will

A key difference between a quota and a tariff is that

Which of the following statements about U.S. international trade in 2013 is CORRECT?

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

The European Union imports bananas from Latin America as well as imports from Europe's former colonies in the African, Caribbean and Pacific (ACP)group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

The U.S. government imposes an import quota on sugar. This import quota helps and harms .

Suppose the world price of a good is $4. Based on the table below, the country will

Economists usually agree with which of the following arguments that favor protectionism?

The Smoot-Hawley Act was enacted in

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Filters

Exam 15: International Trade Policy

________ occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

How does a tariff affect the government's revenue? How does a quota affect the government's revenue?

Export subsidies are

U.S. tariffs peaked in

An assumption behind the infant-industry argument for tariff protection is that

Dumping occurs when a foreign firm ________.

What are the effects of a tariff?

A tariff is

If a tariff is imposed, the price paid by domestic consumers will ________ and the amount imported will ________.

Comparative advantage implies that a country will

A key difference between a quota and a tariff is that

Which of the following statements about U.S. international trade in 2013 is CORRECT?

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

The European Union imports bananas from Latin America as well as imports from Europe's former colonies in the African, Caribbean and Pacific (ACP)group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?

The U.S. government imposes an import quota on sugar. This import quota helps ________ and harms ________.

Suppose the world price of a good is $4. Based on the table below, the country will

Economists usually agree with which of the following arguments that favor protectionism?

The Smoot-Hawley Act was enacted in

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Filters

If a tariff is imposed, the price paid by domestic consumers will and the amount imported will .

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

The U.S. government imposes an import quota on sugar. This import quota helps and harms .