Question 1

Which organization meets regularly to establish rules and settle disputes related to international trade?

Accepted Answer

A)  the United Nations Commission on Trade Law 
B)  the United Nations Conference on Trade and Development 
C)  the World Trade Organization 
D)  the World Economic Forum 
A)  the United Nations Commission on Trade Law 
B)  the United Nations Conference on Trade and Development 
C)  the World Trade Organization 
D)  the World Economic Forum

Question 2

The terms of trade reflect the

Accepted Answer

A)  rate at which gold exchanges internationally for any domestic currency. 
B)  ratio at which nations will exchange two goods. 
C)  fact that the gains from trade will be equally divided. 
D)  cost conditions embodied in a single country's production possibilities curve. 
A)  rate at which gold exchanges internationally for any domestic currency. 
B)  ratio at which nations will exchange two goods. 
C)  fact that the gains from trade will be equally divided. 
D)  cost conditions embodied in a single country's production possibilities curve.

Question 3

Critics of the World Trade Organization (WTO) say that liberalized world trade does all of the following except

Accepted Answer

A)  produce environmental degradation. 
B)  allow producers to circumvent labor protections such as workplace safety, child labor restrictions, and collective bargaining rights. 
C)  help developing nations escape from poverty. 
D)  promote the interests of multinational corporations. 
A)  produce environmental degradation. 
B)  allow producers to circumvent labor protections such as workplace safety, child labor restrictions, and collective bargaining rights. 
C)  help developing nations escape from poverty. 
D)  promote the interests of multinational corporations.

Question 4

(Last Word) Frederic Bastiat's "Petition of the Candlemakers" most directly refutes which of the following arguments for protectionism?

Accepted Answer

A)  increased domestic employment argument 
B)  infant industry argument 
C)  cheap foreign labor argument 
D)  diversification-for-stability argument 
A)  increased domestic employment argument 
B)  infant industry argument 
C)  cheap foreign labor argument 
D)  diversification-for-stability argument

Question 5

An example of a nontariff barrier would be

Accepted Answer

A)  a minimum limit on the quantity of imports. 
B)  excessive licensing requirements. 
C)  a tax on an imported product. 
D)  voluntary export restraints. 
A)  a minimum limit on the quantity of imports. 
B)  excessive licensing requirements. 
C)  a tax on an imported product. 
D)  voluntary export restraints.

Question 6

The increased-domestic-employment argument for tariff protection holds that

Accepted Answer

A)  domestic inflation is a desirable policy goal because it stimulates exports. 
B)  domestic deflation is a desirable policy goal because it stimulates imports. 
C)  an increase in tariffs will reduce net exports and stimulate domestic employment. 
D)  an increase in tariffs will increase net exports and stimulate domestic employment. 
A)  domestic inflation is a desirable policy goal because it stimulates exports. 
B)  domestic deflation is a desirable policy goal because it stimulates imports. 
C)  an increase in tariffs will reduce net exports and stimulate domestic employment. 
D)  an increase in tariffs will increase net exports and stimulate domestic employment.

Question 7

Differences in production efficiencies among nations in producing a particular good result from

Accepted Answer

A)  different endowments of fertile soil. 
B)  different amounts of skilled labor. 
C)  different levels of technological knowledge. 
D)  all of these. 
A)  different endowments of fertile soil. 
B)  different amounts of skilled labor. 
C)  different levels of technological knowledge. 
D)  all of these.

Question 8

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y. Therefore, Alpha should specialize in Y and Beta in X.

Accepted Answer

A) True 
 B)False

Question 9

An excise tax that is applied to an imported product that is not at all produced domestically is called a(n)

Accepted Answer

A)  protective tariff. 
B)  revenue tariff. 
C)  import quota. 
D)  nontariff barrier. 
A)  protective tariff. 
B)  revenue tariff. 
C)  import quota. 
D)  nontariff barrier.

Question 10

In which of the following countries did exports account for the biggest percentage of GDP in 2014?

Accepted Answer

A)  Japan 
B)  United States 
C)  Netherlands 
D)  Germany 
A)  Japan 
B)  United States 
C)  Netherlands 
D)  Germany

Question 11

Which of the following is an example of a labor-intensive commodity?

Accepted Answer

A)  digital cameras 
B)  beer 
C)  aspirin tablets 
D)  gasoline 
A)  digital cameras 
B)  beer 
C)  aspirin tablets 
D)  gasoline

Question 12

Which of the following product groups is a leading export of the United States?

Accepted Answer

A)  home appliances 
B)  metals 
C)  agricultural products 
D)  computers 
A)  home appliances 
B)  metals 
C)  agricultural products 
D)  computers

Question 13

The benefits to trading nations based on comparative advantage accrue from

Accepted Answer

A)  specialization only. 
B)  specialization and trading. 
C)  trading only. 
D)  protection of domestic industries. 
A)  specialization only. 
B)  specialization and trading. 
C)  trading only. 
D)  protection of domestic industries.

Question 14

A nation's export supply curve for a specific product

Accepted Answer

A)  is upsloping. 
B)  shows the amount of the product it will export at prices below its domestic price. 
C)  lies below its import demand curve for the product. 
D)  depends on domestic supply of the product, but not on domestic demand. 
A)  is upsloping. 
B)  shows the amount of the product it will export at prices below its domestic price. 
C)  lies below its import demand curve for the product. 
D)  depends on domestic supply of the product, but not on domestic demand.

Question 15

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Accepted Answer

A)  consumer tastes and preferences. 
B)  resource availability and technological capabilities. 
C)  the nations' incomes and income distribution. 
D)  unemployment and inflation rates. 
A)  consumer tastes and preferences. 
B)  resource availability and technological capabilities. 
C)  the nations' incomes and income distribution. 
D)  unemployment and inflation rates.

Question 16

In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce

Accepted Answer

A)  the product with fewer inputs than the other nation. 
B)  the product at lower average cost than the other nation. 
C)  the product at a lower domestic opportunity cost than the other nation. 
D)  more of the product than the other nation. 
A)  the product with fewer inputs than the other nation. 
B)  the product at lower average cost than the other nation. 
C)  the product at a lower domestic opportunity cost than the other nation. 
D)  more of the product than the other nation.

Question 17

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. $\begin{array}{|c|c|c|}
\hline\text { Ouantity }&&\text { Ouantity }\
(\text { Supplied }&&\text { Demanded }\
\hline \text { (Domestic) } & \text { Price } & \text { (Domestic) } \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$ With a $1-per-unit tariff, price and total quantity sold will be

Accepted Answer

A)  $3 and 7 units. 
B)  $5 and 2 units. 
C)  $1 and 16 units. 
D)  $2 and 11 units. 
A)  $3 and 7 units. 
B)  $5 and 2 units. 
C)  $1 and 16 units. 
D)  $2 and 11 units.

Question 18

U.S. exports of goods and services (on a national income account basis) are about

Accepted Answer

A)  20 percent of U.S. GDP. 
B)  8 percent of U.S. GDP. 
C)  28 percent of U.S. GDP. 
D)  13 percent of U.S. GDP. 
A)  20 percent of U.S. GDP. 
B)  8 percent of U.S. GDP. 
C)  28 percent of U.S. GDP. 
D)  13 percent of U.S. GDP.

Question 19

Which of the following products is a leading import of the United States?

Accepted Answer

A)  grains 
B)  aircraft 
C)  automobiles 
D)  generating equipment 
A)  grains 
B)  aircraft 
C)  automobiles 
D)  generating equipment

Question 20

If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that

Accepted Answer

A)  Nation A has the absolute advantage over Nation B in producing cloth. 
B)  Nation B has the absolute advantage over Nation A in producing cloth. 
C)  Nation A has the comparative advantage over Nation B in producing cloth. 
D)  Nation B has the comparative advantage over Nation A in producing cloth. 
A)  Nation A has the absolute advantage over Nation B in producing cloth. 
B)  Nation B has the absolute advantage over Nation A in producing cloth. 
C)  Nation A has the comparative advantage over Nation B in producing cloth. 
D)  Nation B has the comparative advantage over Nation A in producing cloth.

Exam 26: International Trade

Which organization meets regularly to establish rules and settle disputes related to international trade?

The terms of trade reflect the

Critics of the World Trade Organization (WTO) say that liberalized world trade does all of the following except

(Last Word) Frederic Bastiat's "Petition of the Candlemakers" most directly refutes which of the following arguments for protectionism?

An example of a nontariff barrier would be

The increased-domestic-employment argument for tariff protection holds that

Differences in production efficiencies among nations in producing a particular good result from

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y. Therefore, Alpha should specialize in Y and Beta in X.

An excise tax that is applied to an imported product that is not at all produced domestically is called a(n)

In which of the following countries did exports account for the biggest percentage of GDP in 2014?

Which of the following is an example of a labor-intensive commodity?

Which of the following product groups is a leading export of the United States?

The benefits to trading nations based on comparative advantage accrue from

A nation's export supply curve for a specific product

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. Ouantity Ouantity ( Supplied Demanded (Domestic) Price (Domestic) 12 \ 5 2 10 4 4 7 3 7 4 2 11 1 1 16 With a $1-per-unit tariff, price and total quantity sold will be

U.S. exports of goods and services (on a national income account basis) are about

Which of the following products is a leading import of the United States?

If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

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Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

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The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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