Question 1

Usually the removal of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

Accepted Answer

A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot 
A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot

Question 2

In 2006, European Union tariff on imported bananas from Latin America was €176 a ton. Suppose 2.5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the change in tariff revenue between 2006 and 2007?

Accepted Answer

A)  €1,000,000 
B)  €440,000,000 
C)  €445,000,000 
D)  - €1,000,000 
A)  €1,000,000 
B)  €440,000,000 
C)  €445,000,000 
D)  - €1,000,000

Question 3

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

Accepted Answer

A)  export 50 units. 
B)  import 50 units. 
C)  export 200 units. 
D)  import 150 units. 
A)  export 50 units. 
B)  import 50 units. 
C)  export 200 units. 
D)  import 150 units.

Question 4

Which of the following best describes the history of tariffs in the United States over the past 70 years?

Accepted Answer

A)  Tariffs were at their highest level in the 1970s and now average just over 10 percent. 
B)  Tariffs have declined overall since the early 1930s and now average just over 10 percent. 
C)  Tariffs reached a maximum in the early 1930s and now average less than 5 percent. 
D)  Average tariff rates have not changed much since the early 1930s and are less than 5 percent. 
A)  Tariffs were at their highest level in the 1970s and now average just over 10 percent. 
B)  Tariffs have declined overall since the early 1930s and now average just over 10 percent. 
C)  Tariffs reached a maximum in the early 1930s and now average less than 5 percent. 
D)  Average tariff rates have not changed much since the early 1930s and are less than 5 percent.

Question 5

Import quotas ________ the price of imported goods and ________ the quantity consumed in the nation imposing the quota.

Accepted Answer

A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease 
A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease

Question 6

Based on the table below, at what world price would the country import the good?

Accepted Answer

A)  all prices below $8 
B)  at exactly $8 
C)  all prices above $8 
D)  it is impossible to say from the information given 
A)  all prices below $8 
B)  at exactly $8 
C)  all prices above $8 
D)  it is impossible to say from the information given

Question 7

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 8

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, with international trade ________ helicopters per year are produced in the United States.

Accepted Answer

A)  360 
B)  480 
C)  720 
D)  240 
A)  360 
B)  480 
C)  720 
D)  240

Question 9

An import quota directly restricts ________ and are designed to protect domestic ________.

Accepted Answer

A)  exports; consumers 
B)  exports; producers 
C)  imports; consumers 
D)  imports; producers 
A)  exports; consumers 
B)  exports; producers 
C)  imports; consumers 
D)  imports; producers

Question 10

A U.S. tariff on textiles would ________ U.S. prices on clothing and ________ the number of jobs in the U.S. textile industry.

Accepted Answer

A)  reduce; decrease 
B)  reduce; increase 
C)  raise; decrease 
D)  raise; increase 
A)  reduce; decrease 
B)  reduce; increase 
C)  raise; decrease 
D)  raise; increase

Question 11

Which of the following is an explanation for the existence of trade restrictions?

Accepted Answer

A)  Tariffs generate revenue for the government. 
B)  rent seeking 
C)  inefficient quotas 
D)  Both answers A and B are key explanations. 
A)  Tariffs generate revenue for the government. 
B)  rent seeking 
C)  inefficient quotas 
D)  Both answers A and B are key explanations.

Question 12

If the United States imposes a tariff on imported cars, the

Accepted Answer

A)  U.S. demand curve shifts rightward. 
B)  U.S. demand curve shifts leftward. 
C)  U.S. supply curve shifts rightward. 
D)  price in the United States rises but neither the U.S. demand curve nor the U.S. supply curve shift. 
A)  U.S. demand curve shifts rightward. 
B)  U.S. demand curve shifts leftward. 
C)  U.S. supply curve shifts rightward. 
D)  price in the United States rises but neither the U.S. demand curve nor the U.S. supply curve shift.

Question 13

Which of the following is a TRUE statement?

Accepted Answer

A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition. 
A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition.

Question 14

During 2010, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

Accepted Answer

It would be foolish for the United State

Question 15

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 16

Japan was accused of dumping in the steel industry within the United States when it

Accepted Answer

A)  negotiated an illegal agreement to raise prices with U.S. steel industries. 
B)  prohibited imports of U.S. steel into Japan. 
C)  sold steel in the United States at a price below its cost of production. 
D)  negotiated an illegal trade deal with Canada. 
A)  negotiated an illegal agreement to raise prices with U.S. steel industries. 
B)  prohibited imports of U.S. steel into Japan. 
C)  sold steel in the United States at a price below its cost of production. 
D)  negotiated an illegal trade deal with Canada.

Question 17

Define comparative advantage and discuss its role in international trade.

Accepted Answer

Comparative advantage is the factor that

Question 18

In 2012 the U.S. government reduced the quantity of sugar that can be imported from other nations. This action ________ the price of sugar in the United States and ________ the quantity consumed in the United States.

Accepted Answer

A)  raised; increased 
B)  raised; decreased 
C)  lowered; increased 
D)  lowered; decreased 
A)  raised; increased 
B)  raised; decreased 
C)  lowered; increased 
D)  lowered; decreased

Question 19

The Smoot-Hawley Act

Accepted Answer

A)  made most tariffs illegal. 
B)  greatly raised tariffs. 
C)  gave the President the right to broker trade deals with other nations. 
D)  recognized Congress's right to deny trade authorization powers to the President. 
A)  made most tariffs illegal. 
B)  greatly raised tariffs. 
C)  gave the President the right to broker trade deals with other nations. 
D)  recognized Congress's right to deny trade authorization powers to the President.

Question 20

The infant industry argument is based on the idea of

Accepted Answer

A)  dynamic comparative advantage. 
B)  absolute productivity advantage. 
C)  global monopoly. 
D)  countervailing duties. 
A)  dynamic comparative advantage. 
B)  absolute productivity advantage. 
C)  global monopoly. 
D)  countervailing duties.

Usually the removal of trade barriers affecting a particular good benefits people domestically, each of whom gains a .

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

Which of the following best describes the history of tariffs in the United States over the past 70 years?

Import quotas the price of imported goods and the quantity consumed in the nation imposing the quota.

Based on the table below, at what world price would the country import the good?

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

An import quota directly restricts and are designed to protect domestic .

A U.S. tariff on textiles would U.S. prices on clothing and the number of jobs in the U.S. textile industry.

Which of the following is an explanation for the existence of trade restrictions?

If the United States imposes a tariff on imported cars, the

Which of the following is a TRUE statement?

During 2010, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

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

Japan was accused of dumping in the steel industry within the United States when it

Define comparative advantage and discuss its role in international trade.

In 2012 the U.S. government reduced the quantity of sugar that can be imported from other nations. This action the price of sugar in the United States and the quantity consumed in the United States.

The Smoot-Hawley Act

The infant industry argument is based on the idea of

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

Usually the removal of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

Which of the following best describes the history of tariffs in the United States over the past 70 years?

Import quotas ________ the price of imported goods and ________ the quantity consumed in the nation imposing the quota.

Based on the table below, at what world price would the country import the good?

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

An import quota directly restricts ________ and are designed to protect domestic ________.

A U.S. tariff on textiles would ________ U.S. prices on clothing and ________ the number of jobs in the U.S. textile industry.

Which of the following is an explanation for the existence of trade restrictions?

If the United States imposes a tariff on imported cars, the

Which of the following is a TRUE statement?

During 2010, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

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

Japan was accused of dumping in the steel industry within the United States when it

Define comparative advantage and discuss its role in international trade.

In 2012 the U.S. government reduced the quantity of sugar that can be imported from other nations. This action ________ the price of sugar in the United States and ________ the quantity consumed in the United States.

The Smoot-Hawley Act

The infant industry argument is based on the idea of

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

Usually the removal of trade barriers affecting a particular good benefits people domestically, each of whom gains a .

Import quotas the price of imported goods and the quantity consumed in the nation imposing the quota.

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

An import quota directly restricts and are designed to protect domestic .

A U.S. tariff on textiles would U.S. prices on clothing and the number of jobs in the U.S. textile industry.

In 2012 the U.S. government reduced the quantity of sugar that can be imported from other nations. This action the price of sugar in the United States and the quantity consumed in the United States.