Question 1

Which is an example of a nontariff barrier (NTB)?

Accepted Answer

A)  an export subsidy 
B)  an excise tax on the physical volume of imported goods 
C)  box-by-box inspection requirements for imported fruit 
D)  an excise tax on the dollar value of imported goods 
A)  an export subsidy 
B)  an excise tax on the physical volume of imported goods 
C)  box-by-box inspection requirements for imported fruit 
D)  an excise tax on the dollar value of imported goods

Question 2

In a two-nation, two-good world, if one nation is more efficient in producing both goods than the other nation, then the more-efficient nation cannot gain from trading with the other nation.

Accepted Answer

A) True 
 B)False

Question 3

Dumping is the sale of a product in a foreign market

Accepted Answer

A)  at a price below its domestic price or cost of production. 
B)  that does not meet the quality standards in the domestic market. 
C)  and is the principal means used to enforce nontariff barriers. 
D)  and is encouraged by voluntary export restraints. 
A)  at a price below its domestic price or cost of production. 
B)  that does not meet the quality standards in the domestic market. 
C)  and is the principal means used to enforce nontariff barriers. 
D)  and is encouraged by voluntary export restraints.

Question 4

Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.

Accepted Answer

A) True 
 B)False

Question 5

"NAFTA" stands for

Accepted Answer

A)  North African Free Trade Area. 
B)  North American Free Trade Agreement. 
C)  North Asian Free Trade Agreement. 
D)  New Zealand-Australia Free Trade Agreement. 
A)  North African Free Trade Area. 
B)  North American Free Trade Agreement. 
C)  North Asian Free Trade Agreement. 
D)  New Zealand-Australia Free Trade Agreement.

Question 6

An export subsidy for a product will benefit

Accepted Answer

A)  domestic consumers of the product. 
B)  foreign producers of the product. 
C)  foreign consumers of the product. 
D)  the domestic taxpayers. 
A)  domestic consumers of the product. 
B)  foreign producers of the product. 
C)  foreign consumers of the product. 
D)  the domestic taxpayers.

Question 7

In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber sold to the United States. This is an example of a(n)

Accepted Answer

A)  import quota. 
B)  export subsidy. 
C)  voluntary export restriction. 
D)  protective tariff. 
A)  import quota. 
B)  export subsidy. 
C)  voluntary export restriction. 
D)  protective tariff.

Question 8

Which of the following countries had the smallest share of exports as a percentage of GDP in 2014?

Accepted Answer

A)  Canada 
B)  France 
C)  United Kingdom 
D)  United States 
A)  Canada 
B)  France 
C)  United Kingdom 
D)  United States

Question 9

A "Buy American" policy strictly enforced is equivalent to a(n)

Accepted Answer

A)  tariff. 
B)  quota. 
C)  export subsidy. 
D)  voluntary export restriction. 
A)  tariff. 
B)  quota. 
C)  export subsidy. 
D)  voluntary export restriction.

Question 10

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. $ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$\text { Alpha's production possibilities }$
$\begin{array}{|c|c|c|c|c|c|}
\hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { Fish (Tons) } & 80 & 60 & 40 & 20 & 0 \
\hline \text { Chips (Tons) } & 0 & 5 & 10 & 15 & 20 \
\hline
\end{array}$ $ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$\text { Beta's production possibilities }$
$\begin{array}{|c|c|c|c|c|c|} 
\hline& \mathrm{A} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} \
\hline \text { Fish (Tons) } & 240 & 180 & 120 & 60 & 0 \
\hline \text { Chips (Tons) } & 0 & 10 & 20 & 30 & 40\
\hline
\end{array}$ Assume the production possibilities in Beta double at alternatives A through E, while remaining as shown in the table for Alpha. As a result, Beta should

Accepted Answer

A)  continue to specialize in producing chips. 
B)  continue to specialize in fishing. 
C)  no longer specialize and trade. 
D)  specialize both in fishing and in producing chips and sell the surplus to Alpha. 
A)  continue to specialize in producing chips. 
B)  continue to specialize in fishing. 
C)  no longer specialize and trade. 
D)  specialize both in fishing and in producing chips and sell the surplus to Alpha.

Question 11

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. $\begin{array}{|c|c|c|}
\hline\text { Ouantity }&&\text { Ouantity }\
(\text { Supplied }&&\text { Demanded }\
\hline \text { (Domestic) } & \text { Price } & \text { (Domestic) } \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$ If this nation were entirely closed to international trade, equilibrium price and quantity would be

Accepted Answer

A)  $5 and 2 units. 
B)  $1 and 1 unit. 
C)  $4 and 4 units. 
D)  $3 and 7 units. 
A)  $5 and 2 units. 
B)  $1 and 1 unit. 
C)  $4 and 4 units. 
D)  $3 and 7 units.

Question 12

An excise tax on an imported good that is not produced domestically is called a

Accepted Answer

A)  protective tariff. 
B)  import quota. 
C)  revenue tariff. 
D)  voluntary export restriction. 
A)  protective tariff. 
B)  import quota. 
C)  revenue tariff. 
D)  voluntary export restriction.

Question 13

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. $ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$\text { Alpha's production possibilities }$
$\begin{array}{|c|c|c|c|c|c|}
\hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { Fish (Tons) } & 80 & 60 & 40 & 20 & 0 \
\hline \text { Chips (Tons) } & 0 & 5 & 10 & 15 & 20 \
\hline
\end{array}$ $ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$ \quad$$\text { Beta's production possibilities }$
$\begin{array}{|c|c|c|c|c|c|} 
\hline& \mathrm{A} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} \
\hline \text { Fish (Tons) } & 240 & 180 & 120 & 60 & 0 \
\hline \text { Chips (Tons) } & 0 & 10 & 20 & 30 & 40\
\hline
\end{array}$ The domestic opportunity cost of

Accepted Answer

A)  producing a ton of chips in Alpha is 1/5 of a ton of fish. 
B)  producing a ton of chips in Beta is 6 tons of fish. 
C)  catching a ton of fish in Alpha is 5 tons of chips. 
D)  catching a ton of fish in Beta is 6 tons of chips. 
A)  producing a ton of chips in Alpha is 1/5 of a ton of fish. 
B)  producing a ton of chips in Beta is 6 tons of fish. 
C)  catching a ton of fish in Alpha is 5 tons of chips. 
D)  catching a ton of fish in Beta is 6 tons of chips.

Question 14

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Accepted Answer

A)  tariff. 
B)  quota. 
C)  nontariff barrier. 
D)  voluntary export restriction. 
A)  tariff. 
B)  quota. 
C)  nontariff barrier. 
D)  voluntary export restriction.

Question 15

Suppose the domestic price (no-international-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will

Accepted Answer

A)  have a domestic surplus of copper. 
B)  export copper. 
C)  import copper. 
D)  neither export nor import copper. 
A)  have a domestic surplus of copper. 
B)  export copper. 
C)  import copper. 
D)  neither export nor import copper.

Question 16

As a percentage of GDP, U.S. exports are

Accepted Answer

A)  greater than U.S. imports. 
B)  about 20 percent. 
C)  considerably lower than in several other industrially advanced nations. 
D)  higher than in Canada but lower than in Germany. 
A)  greater than U.S. imports. 
B)  about 20 percent. 
C)  considerably lower than in several other industrially advanced nations. 
D)  higher than in Canada but lower than in Germany.

Question 17

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. The terms of trade will be at or within the 1X = 1½Y to 1X = ⅔Y range.

Accepted Answer

A) True 
 B)False

Question 18

Which country is the United States' largest trading partner in terms of volume of trade?

Accepted Answer

A)  Mexico 
B)  Japan 
C)  China 
D)  Canada 
A)  Mexico 
B)  Japan 
C)  China 
D)  Canada

Question 19

The impact of increasing, as opposed to constant, costs is to

Accepted Answer

A)  intensify and prolong the comparative advantages that any nation may have initially. 
B)  expand the limits of the terms of trade. 
C)  cause the bases for further specialization to disappear as nations specialize according to comparative advantage. 
D)  cause nations to realize economies of scale in those products in which they specialize. 
A)  intensify and prolong the comparative advantages that any nation may have initially. 
B)  expand the limits of the terms of trade. 
C)  cause the bases for further specialization to disappear as nations specialize according to comparative advantage. 
D)  cause nations to realize economies of scale in those products in which they specialize.

Question 20

The principal concept behind comparative advantage is that a nation should

Accepted Answer

A)  maximize its volume of trade with other nations. 
B)  use tariffs and quotas to protect the production of vital products for the nation. 
C)  concentrate production on those products for which it has the lowest domestic opportunity cost. 
D)  strive to be self-sufficient in the production of essential goods and services. 
A)  maximize its volume of trade with other nations. 
B)  use tariffs and quotas to protect the production of vital products for the nation. 
C)  concentrate production on those products for which it has the lowest domestic opportunity cost. 
D)  strive to be self-sufficient in the production of essential goods and services.

Exam 26: International Trade

Which is an example of a nontariff barrier (NTB)?

In a two-nation, two-good world, if one nation is more efficient in producing both goods than the other nation, then the more-efficient nation cannot gain from trading with the other nation.

Dumping is the sale of a product in a foreign market

Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.

"NAFTA" stands for

An export subsidy for a product will benefit

In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber sold to the United States. This is an example of a(n)

Which of the following countries had the smallest share of exports as a percentage of GDP in 2014?

A "Buy American" policy strictly enforced is equivalent to a(n)

An excise tax on an imported good that is not produced domestically is called a

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Suppose the domestic price (no-international-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will

As a percentage of GDP, U.S. exports are

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. The terms of trade will be at or within the 1X = 1½Y to 1X = ⅔Y range.

Which country is the United States' largest trading partner in terms of volume of trade?

The impact of increasing, as opposed to constant, costs is to

The principal concept behind comparative advantage is that a nation should

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

Monopolistic Competition

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

Health Care

Immigration

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters