Question 1

Which of the following statements about economists' assessment of protectionism is true?

Accepted Answer

A)  The costs and benefits of trade barriers are essentially equal. 
B)  The benefits of trade restrictions exceed their cost. 
C)  The costs of trade barriers exceed their benefits and generally result in inefficiency. 
D)  It is not possible to estimate the costs of protection. 
A)  The costs and benefits of trade barriers are essentially equal. 
B)  The benefits of trade restrictions exceed their cost. 
C)  The costs of trade barriers exceed their benefits and generally result in inefficiency. 
D)  It is not possible to estimate the costs of protection. C

Question 2

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, the opportunity cost of producing 100 bicycles is _______ tractor(s).

Accepted Answer

A)  1 
B)  4 
C)  25 
D)  100 
A)  1 
B)  4 
C)  25 
D)  100 B

Question 3

Production possibilities curves:

Accepted Answer

A)  illustrate the production choices available to an economy. 
B)  assume full employment but not maximum efficiency. 
C)  assume maximum efficiency but not full employment. 
D)  are used to illustrate the law of decreasing opportunity costs. 
A)  illustrate the production choices available to an economy. 
B)  assume full employment but not maximum efficiency. 
C)  assume maximum efficiency but not full employment. 
D)  are used to illustrate the law of decreasing opportunity costs. A

Question 4

Free trade is generally harmful because it reallocates world resources.

Accepted Answer

A) True 
 B)False

Question 5

If a tariff is imposed on imported televisions, we expect domestic demand for televisions to:

Accepted Answer

A)  fall, and the total supply to increase. 
B)  rise, and the total supply to decrease. 
C)  rise, and the total supply to rise. 
D)  remain unchanged, and the total supply to decrease. 
A)  fall, and the total supply to increase. 
B)  rise, and the total supply to decrease. 
C)  rise, and the total supply to rise. 
D)  remain unchanged, and the total supply to decrease.

Question 6

Use the following to answer question(s): Heartland and Soulland
Suppose that there are only two countries in the world, Heartland and Soulland.The two countries produce only two goods, corn and drill presses.At its current level of production, Heartland must give up production of 1/4 drill press to produce an additional 100 bushels of corn.Soulland must give up 1 drill press to produce an additional 100 bushels of corn.No trade now occurs between the two economies, and both economies are operating on their respective production possibilities frontiers.
-(Exhibit: Heartland and Soulland) If trade now opens up between the two economies, we can expect that:

Accepted Answer

A)  Heartland will export drill presses to Soulland and import corn from it. 
B)  Heartland will export corn to Soulland and import drill presses from it. 
C)  both countries will export corn and drill presses. 
D)  both countries will import corn and drill presses. 
A)  Heartland will export drill presses to Soulland and import corn from it. 
B)  Heartland will export corn to Soulland and import drill presses from it. 
C)  both countries will export corn and drill presses. 
D)  both countries will import corn and drill presses.

Question 7

Trade between two nations can benefit both if each specializes in the good that it can produce at a lower opportunity cost.

Accepted Answer

A) True 
 B)False

Question 8

Quotas imposed on U.S.imports into Japan tend to:

Accepted Answer

A)  penalize both U.S.consumers and Japanese consumers. 
B)  benefit both U.S.consumers and Japanese consumers. 
C)  penalize U.S.consumers and benefit Japanese consumers. 
D)  benefit U.S.consumers and penalize Japanese consumers. 
A)  penalize both U.S.consumers and Japanese consumers. 
B)  benefit both U.S.consumers and Japanese consumers. 
C)  penalize U.S.consumers and benefit Japanese consumers. 
D)  benefit U.S.consumers and penalize Japanese consumers.

Question 9

A trade barrier whereby foreign firms agree to limit the quantity of exports to a particular country is called a:

Accepted Answer

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

Question 10

If the United States imposes a quota on French wines, the result in the short run is likely to be ________ profits for American wine producers and ________ profits for French wine producers.

Accepted Answer

A)  lower; lower 
B)  lower; higher 
C)  higher; lower 
D)  higher; higher 
A)  lower; lower 
B)  lower; higher 
C)  higher; lower 
D)  higher; higher

Question 11

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland
  
-(Exhibit: Production Possibilities in Alphaland and Omegaland) At the points where they are producing (A and A', respectively), Alphaland has a(n) _______ in producing _______ and Omegaland has a _______ in producing _______.

Accepted Answer

A)  absolute advantage; computers; comparative advantage; cars 
B)  comparative advantage; cars; comparative advantage; computers 
C)  comparative advantage; computers; comparative advantage; cars 
D)  comparative advantage; computers; absolute advantage; cars 
A)  absolute advantage; computers; comparative advantage; cars 
B)  comparative advantage; cars; comparative advantage; computers 
C)  comparative advantage; computers; comparative advantage; cars 
D)  comparative advantage; computers; absolute advantage; cars

Question 12

Quotas imposed on Japanese imports into the United States tend to:

Accepted Answer

A)  penalize both U.S.consumers and Japanese consumers. 
B)  benefit both U.S.consumers and Japanese consumers. 
C)  penalize U.S.consumers and benefit Japanese consumers. 
D)  benefit U.S.consumers and penalize Japanese consumers. 
A)  penalize both U.S.consumers and Japanese consumers. 
B)  benefit both U.S.consumers and Japanese consumers. 
C)  penalize U.S.consumers and benefit Japanese consumers. 
D)  benefit U.S.consumers and penalize Japanese consumers.

Question 13

Use the following to answer question(s): Production Possibilities for Machinery and Petroleum
  
-(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of machinery each country would have to forgo in order to produce the additional petroleum indicated.Based on the information in the exhibit, it is true that:

Accepted Answer

A)  the opportunity cost of petroleum is less in the United States than in Mexico. 
B)  the opportunity cost of petroleum is more in the United States than in Mexico. 
C)  petroleum costs are the same in the United States and in Mexico. 
D)  machinery costs are the same in the United States and in Mexico. 
A)  the opportunity cost of petroleum is less in the United States than in Mexico. 
B)  the opportunity cost of petroleum is more in the United States than in Mexico. 
C)  petroleum costs are the same in the United States and in Mexico. 
D)  machinery costs are the same in the United States and in Mexico.

Question 14

Use the following to answer question(s): Production Possibilities Curve
  
-(Exhibit: Production Possibilities Curve) If an economy is operating on its production possibilities curve, the law of increasing opportunity costs predicts that:

Accepted Answer

A)  as more tractors are produced, fewer and fewer drill presses must be given up. 
B)  as more tractors are produced, more and more drill presses must be given up. 
C)  as more tractors are produced, the same amount of drill presses must be given up. 
D)  as more drill presses are produced, fewer and fewer tractors must be given up. 
A)  as more tractors are produced, fewer and fewer drill presses must be given up. 
B)  as more tractors are produced, more and more drill presses must be given up. 
C)  as more tractors are produced, the same amount of drill presses must be given up. 
D)  as more drill presses are produced, fewer and fewer tractors must be given up.

Question 15

Use the following to answer question(s): Production Possibilities Curve
  
-(Exhibit: Production Possibilities Curve) The slope of the production possibilities curve between point B and point A is:

Accepted Answer

A)  -0.5. 
B)  -1.0. 
C)  -2.0. 
D)  1.0. 
A)  -0.5. 
B)  -1.0. 
C)  -2.0. 
D)  1.0.

Question 16

Evaluate and explain in some detail the free trade arguments concerning the following statement: "I don't know much about tariffs, but I do know this.If we in the United States buy steel rails in England, we have the rails and they have the money.If we buy our own steel rails, we have both the rails and the money!"

Accepted Answer

The statement provided reflects a common

Question 17

When a country specializes in the production of a good that is relatively cheaper for it to produce than other goods, it is because of:

Accepted Answer

A)  the foreign-trade multiplier. 
B)  comparative advantage. 
C)  nontariff barriers. 
D)  absolute advantage. 
A)  the foreign-trade multiplier. 
B)  comparative advantage. 
C)  nontariff barriers. 
D)  absolute advantage.

Question 18

Dumping:

Accepted Answer

A)  is a strong case in general for tariffs. 
B)  is selling in a foreign market at a price below the producer's average total cost of production. 
C)  is spreading exports all over a foreign port. 
D)  results in a higher price for the good dumped in the foreign country where dumping occurs. 
A)  is a strong case in general for tariffs. 
B)  is selling in a foreign market at a price below the producer's average total cost of production. 
C)  is spreading exports all over a foreign port. 
D)  results in a higher price for the good dumped in the foreign country where dumping occurs.

Question 19

Dumping is selling in a foreign market at a price in excess of the importing country's domestic average total cost of production.

Accepted Answer

A) True 
 B)False

Question 20

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland
  
-(Exhibit: Production Possibilities in Alphaland and Omegaland) The maximum quantity of possible production for Alphaland is:

Accepted Answer

A)  10,000 computers and 10,000 cars. 
B)  4,000 computers and 9,000 cars at point A. 
C)  10,000 computers or 6,000 cars. 
D)  6,000 cars. 
A)  10,000 computers and 10,000 cars. 
B)  4,000 computers and 9,000 cars at point A. 
C)  10,000 computers or 6,000 cars. 
D)  6,000 cars.

Which of the following statements about economists' assessment of protectionism is true?

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, the opportunity cost of producing 100 bicycles is _______ tractor(s).

Production possibilities curves:

Free trade is generally harmful because it reallocates world resources.

If a tariff is imposed on imported televisions, we expect domestic demand for televisions to:

Trade between two nations can benefit both if each specializes in the good that it can produce at a lower opportunity cost.

Quotas imposed on U.S.imports into Japan tend to:

A trade barrier whereby foreign firms agree to limit the quantity of exports to a particular country is called a:

If the United States imposes a quota on French wines, the result in the short run is likely to be profits for American wine producers and profits for French wine producers.

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) At the points where they are producing (A and A', respectively), Alphaland has a(n) ___ in producing _ and Omegaland has a _ in producing ___.

Quotas imposed on Japanese imports into the United States tend to:

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) If an economy is operating on its production possibilities curve, the law of increasing opportunity costs predicts that:

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) The slope of the production possibilities curve between point B and point A is:

When a country specializes in the production of a good that is relatively cheaper for it to produce than other goods, it is because of:

Dumping:

Dumping is selling in a foreign market at a price in excess of the importing country's domestic average total cost of production.

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) The maximum quantity of possible production for Alphaland is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 17: International Trade

Which of the following statements about economists' assessment of protectionism is true?

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, the opportunity cost of producing 100 bicycles is _______ tractor(s).

Production possibilities curves:

Free trade is generally harmful because it reallocates world resources.

If a tariff is imposed on imported televisions, we expect domestic demand for televisions to:

Trade between two nations can benefit both if each specializes in the good that it can produce at a lower opportunity cost.

Quotas imposed on U.S.imports into Japan tend to:

A trade barrier whereby foreign firms agree to limit the quantity of exports to a particular country is called a:

If the United States imposes a quota on French wines, the result in the short run is likely to be ________ profits for American wine producers and ________ profits for French wine producers.

Quotas imposed on Japanese imports into the United States tend to:

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) If an economy is operating on its production possibilities curve, the law of increasing opportunity costs predicts that:

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) The slope of the production possibilities curve between point B and point A is:

When a country specializes in the production of a good that is relatively cheaper for it to produce than other goods, it is because of:

Dumping:

Dumping is selling in a foreign market at a price in excess of the importing country's domestic average total cost of production.

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) The maximum quantity of possible production for Alphaland is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

If the United States imposes a quota on French wines, the result in the short run is likely to be profits for American wine producers and profits for French wine producers.