Question 1

Selling a product in a foreign nation at a price less than its cost of production is called

Accepted Answer

A)  infant-industry exploitation. 
B)  absolute advantage. 
C)  dumping. 
D)  net exporting. 
A)  infant-industry exploitation. 
B)  absolute advantage. 
C)  dumping. 
D)  net exporting.

Question 2

Consider a market that sells some of its goods as exports. Who does NOT benefit?

Accepted Answer

A)  domestic consumers 
B)  domestic producers 
C)  workers in the industry 
D)  foreign consumers 
A)  domestic consumers 
B)  domestic producers 
C)  workers in the industry 
D)  foreign consumers

Question 3

In 2012 the United States government tightened the import quota on sugar by decreasing the quantity of sugar that could be imported. Which of the following groups would gain from this change?
I.U.S. consumers of sugar
II.U.S. producers of sugar
III.Foreign producers of sugar

Accepted Answer

A)  I only 
B)  I and II only 
C)  II only 
D)  I and III only 
A)  I only 
B)  I and II only 
C)  II only 
D)  I and III only

Question 4

Since the 1930s, tariff levels in the United States have

Accepted Answer

A)  declined overall. 
B)  steadily risen. 
C)  increased during expansions. 
D)  decreased during recessions. 
A)  declined overall. 
B)  steadily risen. 
C)  increased during expansions. 
D)  decreased during recessions.

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 80 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 80 years. 
C)  a framework promoting international free trade. 
D)  revenue tariffs as a major source of U.S. government revenues.

Question 6

A key difference between imposing tariffs as opposed to imposing quotas is that

Accepted Answer

A)  consumers are hurt with quotas but not with tariffs. 
B)  consumers are hurt with tariffs but not with quotas. 
C)  the government receives revenue with tariffs, but the importer receives the added revenue with quotas. 
D)  the government receives revenue with quotas, but the importer receives the added revenue with tariffs. 
A)  consumers are hurt with quotas but not with tariffs. 
B)  consumers are hurt with tariffs but not with quotas. 
C)  the government receives revenue with tariffs, but the importer receives the added revenue with quotas. 
D)  the government receives revenue with quotas, but the importer receives the added revenue with tariffs.

Question 7

One reason that international trade is restricted is that

Accepted Answer

A)  the individual gain to parties who benefit from the protection will be 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 will be 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 8

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know definitively that

Accepted Answer

A)  Brazil has comparative advantage in coffee production. 
B)  the rest of the world has comparative advantage in coffee production. 
C)  the rest of the world has absolute advantage in coffee production. 
D)  Brazil has absolute advantage in coffee production. 
A)  Brazil has comparative advantage in coffee production. 
B)  the rest of the world has comparative advantage in coffee production. 
C)  the rest of the world has absolute advantage in coffee production. 
D)  Brazil has absolute advantage in coffee production.

Question 9

A difference between a quota and a tariff is that with a quota the

Accepted Answer

A)  person who has the right to import the good captures an extra gain. 
B)  exporting government collects an extra gain in the form of revenue. 
C)  importing government collects an extra gain in the form of revenue. 
D)  domestic consumers are not harmed. 
A)  person who has the right to import the good captures an extra gain. 
B)  exporting government collects an extra gain in the form of revenue. 
C)  importing government collects an extra gain in the form of revenue. 
D)  domestic consumers are not harmed.

Question 10

How does the United States attempt to compensate losers from lower trade restrictions?

Accepted Answer

The U.S. government attempts to compensa

Question 11

Lowering the tariff on good X will

Accepted Answer

A)  increase domestic employment in industry X. 
B)  increase the domestic imports of good X. 
C)  increase the domestic price of good X. 
D)  have no effect unless the nation's trading partner also lowers its tariff on good X. 
A)  increase domestic employment in industry X. 
B)  increase the domestic imports of good X. 
C)  increase the domestic price of good X. 
D)  have no effect unless the nation's trading partner also lowers its tariff on good X.

Question 12

"Because the United States is the largest economy in the world and can produce anything it needs domestically, there are no gains from trade for the United States." Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect. Th

Question 13

Who benefits from a tariff on a good?

Accepted Answer

A)  domestic consumers of the good 
B)  foreign governments 
C)  domestic producers of the good 
D)  foreign producers of the good 
A)  domestic consumers of the good 
B)  foreign governments 
C)  domestic producers of the good 
D)  foreign producers of the good

Question 14

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 15

When does the domestic government gain the MOST revenue?

Accepted Answer

A)  when it imposes a tariff 
B)  when it imposes an import quota 
C)  when it negotiates a voluntary export restraint 
D)  The amount of revenue it gains is the same with a tariff and a voluntary export restraint. 
A)  when it imposes a tariff 
B)  when it imposes an import quota 
C)  when it negotiates a voluntary export restraint 
D)  The amount of revenue it gains is the same with a tariff and a voluntary export restraint.

Question 16

A tariff will benefit

Accepted Answer

A)  domestic producers by maintaining a higher than free-trade price. 
B)  foreign producers by allowing them to sell at a higher price in markets with tariffs. 
C)  consumers who are able to better afford domestically produced goods. 
D)  All of the above answers are correct. 
A)  domestic producers by maintaining a higher than free-trade price. 
B)  foreign producers by allowing them to sell at a higher price in markets with tariffs. 
C)  consumers who are able to better afford domestically produced goods. 
D)  All of the above answers are correct.

Question 17

The U.S. government limits the amount of sugar that can be imported into the United States. This policy is

Accepted Answer

A)  an import quota. 
B)  a tariff. 
C)  a comparative advantage limitation. 
D)  None of the above answers are correct. 
A)  an import quota. 
B)  a tariff. 
C)  a comparative advantage limitation. 
D)  None of the above answers are correct.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

Accepted Answer

A)  Belize coffee producers would gain from trade. 
B)  Belize coffee consumers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade. 
A)  Belize coffee producers would gain from trade. 
B)  Belize coffee consumers would gain from trade. 
C)  Belize would gain tariff revenue from trade. 
D)  All of these answers are gains from trade.

Selling a product in a foreign nation at a price less than its cost of production is called

Consider a market that sells some of its goods as exports. Who does NOT benefit?

In 2012 the United States government tightened the import quota on sugar by decreasing the quantity of sugar that could be imported. Which of the following groups would gain from this change? I.U.S. consumers of sugar II.U.S. producers of sugar III.Foreign producers of sugar

Since the 1930s, tariff levels in the United States have

The Smoot-Hawley Act introduced

A key difference between imposing tariffs as opposed to imposing quotas is that

One reason that international trade is restricted is that

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know definitively that

A difference between a quota and a tariff is that with a quota the

How does the United States attempt to compensate losers from lower trade restrictions?

Lowering the tariff on good X will

"Because the United States is the largest economy in the world and can produce anything it needs domestically, there are no gains from trade for the United States." Is the previous statement correct or incorrect?

Who benefits from a tariff on a good?

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

When does the domestic government gain the MOST revenue?

A tariff will benefit

The U.S. government limits the amount of sugar that can be imported into the United States. This policy is

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

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

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

Selling a product in a foreign nation at a price less than its cost of production is called

Consider a market that sells some of its goods as exports. Who does NOT benefit?

In 2012 the United States government tightened the import quota on sugar by decreasing the quantity of sugar that could be imported. Which of the following groups would gain from this change? I.U.S. consumers of sugar II.U.S. producers of sugar III.Foreign producers of sugar

Since the 1930s, tariff levels in the United States have

The Smoot-Hawley Act introduced

A key difference between imposing tariffs as opposed to imposing quotas is that

One reason that international trade is restricted is that

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this, we know definitively that

A difference between a quota and a tariff is that with a quota the

How does the United States attempt to compensate losers from lower trade restrictions?

Lowering the tariff on good X will

"Because the United States is the largest economy in the world and can produce anything it needs domestically, there are no gains from trade for the United States." Is the previous statement correct or incorrect?

Who benefits from a tariff on a good?

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

When does the domestic government gain the MOST revenue?

A tariff will benefit

The U.S. government limits the amount of sugar that can be imported into the United States. This policy is

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

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

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