Question 1

A country that can produce everything "better" than another country will have no reason to engage in trade.

Accepted Answer

A) True 
 B)False

Question 2

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.The opportunity cost in Mexico of producing 90 units of machinery is _______ units of petroleum.

Accepted Answer

A)  30 
B)  90 
C)  180 
D)  270 
A)  30 
B)  90 
C)  180 
D)  270

Question 3

Voluntary trade restrictions by foreign countries on their exports to the United States raise the price domestic consumers pay and also raise the price foreign consumers pay.

Accepted Answer

A) True 
 B)False

Question 4

A regulation that specifies the maximum amount of a good or service that may be imported during a specified period of time is a:

Accepted Answer

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

Question 5

Most nations all over the world have raised trade barriers over the past decade.

Accepted Answer

A) True 
 B)False

Question 6

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland
  
-(Exhibit: Production Possibilities in Alphaland and Omegaland) Which of the following statements is true?

Accepted Answer

A)  Alphaland has an absolute advantage in the production of computers. 
B)  Omegaland has an absolute advantage in the production of cars. 
C)  A nation that can produce all goods with an absolute advantage would not benefit from trade. 
D)  Because absolute advantage is determined by the amount of output per worker, it is not possible to determine if either country has an absolute advantage without more information. 
A)  Alphaland has an absolute advantage in the production of computers. 
B)  Omegaland has an absolute advantage in the production of cars. 
C)  A nation that can produce all goods with an absolute advantage would not benefit from trade. 
D)  Because absolute advantage is determined by the amount of output per worker, it is not possible to determine if either country has an absolute advantage without more information.

Question 7

Which of the following statements is true?

Accepted Answer

A)  Nations have generally moved toward freer international trade policies over the past few decades. 
B)  Nations all over the world have recently raised trade barriers. 
C)  Eastern Europe and the Former Soviet Union countries have reduced trade in the last couple of decades. 
D)  NAFTA lowered trade barriers between the United States and Mexico but raised them between the United States and Canada. 
A)  Nations have generally moved toward freer international trade policies over the past few decades. 
B)  Nations all over the world have recently raised trade barriers. 
C)  Eastern Europe and the Former Soviet Union countries have reduced trade in the last couple of decades. 
D)  NAFTA lowered trade barriers between the United States and Mexico but raised them between the United States and Canada.

Question 8

The infant industry argument for tariffs against free trade is sometimes supported because:

Accepted Answer

A)  it is very hard to discern which industries really deserve protection. 
B)  subsidies may have more merit than tariffs. 
C)  the "infant" may "still wear diapers" even after it attains a huge size and economies of scale. 
D)  a new domestic industry may have potential economies of scale. 
A)  it is very hard to discern which industries really deserve protection. 
B)  subsidies may have more merit than tariffs. 
C)  the "infant" may "still wear diapers" even after it attains a huge size and economies of scale. 
D)  a new domestic industry may have potential economies of scale.

Question 9

The results of a U.S.quota on the importation of Japanese automobiles is likely to _______ for automobiles in the United States and _______ automobiles in Japan.

Accepted Answer

A)  decrease the demand; increase the demand for 
B)  reduce the quantity demanded; increase the quantity demanded of 
C)  increase the quantity demanded; increase the quantity demanded of 
D)  increase the demand; decrease the demand for 
A)  decrease the demand; increase the demand for 
B)  reduce the quantity demanded; increase the quantity demanded of 
C)  increase the quantity demanded; increase the quantity demanded of 
D)  increase the demand; decrease the demand for

Question 10

When a domestic country exports goods to and imports goods from a foreign country, in the short run domestic:

Accepted Answer

A)  producers in the exporting industry may be worse off. 
B)  consumers of the imported good may be worse off. 
C)  consumers of the exported good may be better off. 
D)  producers in the importing industry may be worse off. 
A)  producers in the exporting industry may be worse off. 
B)  consumers of the imported good may be worse off. 
C)  consumers of the exported good may be better off. 
D)  producers in the importing industry may be worse off.

Question 11

Use the following to answer question(s): The Production of Tires and Radios
  
-(Exhibit: The Production of Tires and Radios) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of tires each country would have to forgo in order to produce the additional radios indicated.Further assume that the only input is labor and that it remains fully employed.Assume that there is unrestricted trade and complete specialization.According to comparative advantage, country:

Accepted Answer

A)  Y would import tires. 
B)  Y would export radios. 
C)  X would export radios. 
D)  X would export tires. 
A)  Y would import tires. 
B)  Y would export radios. 
C)  X would export radios. 
D)  X would export tires.

Question 12

International exchange in which countries both import and export the same good is called:

Accepted Answer

A)  one-way trade. 
B)  strategic trade. 
C)  two-way trade. 
D)  multilateral trade. 
A)  one-way trade. 
B)  strategic trade. 
C)  two-way trade. 
D)  multilateral trade.

Question 13

Use the following to answer question(s): Production Possibilities Curve
  
-(Exhibit: Production Possibilities Curve) Which of the following statements is false?

Accepted Answer

A)  The maximum amount of drill presses this economy can produce per year is 12,000. 
B)  The maximum amount of tractors this economy can produce per year is 11,000. 
C)  Point E could be achieved it the economy had more money. 
D)  If this economy produces 5,000 tractors per year, then it can produce up to a maximum of 10,000 drill presses per year. 
A)  The maximum amount of drill presses this economy can produce per year is 12,000. 
B)  The maximum amount of tractors this economy can produce per year is 11,000. 
C)  Point E could be achieved it the economy had more money. 
D)  If this economy produces 5,000 tractors per year, then it can produce up to a maximum of 10,000 drill presses per year.

Question 14

Use the following to answer question(s): The Production of Tires and Radios
  
-(Exhibit: The Production of Tires and Radios) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of tires each country would have to forgo in order to produce the additional radios indicated.Further assume that the only input is labor and that it remains fully employed.Assume that there is unrestricted trade and complete specialization.According to comparative advantage, country:

Accepted Answer

A)  X would import tires. 
B)  X would import radios. 
C)  Y would import tires. 
D)  Y would export radios. 
A)  X would import tires. 
B)  X would import radios. 
C)  Y would import tires. 
D)  Y would export radios.

Question 15

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland
  
-(Exhibit: Production Possibilities in Alphaland and Omegaland) Through exchange, both Alphaland and Omegaland:

Accepted Answer

A)  are likely to end up consuming less of both goods. 
B)  together will produce more computers but fewer cars. 
C)  because of specialization and increased efficiency, will have increased the amount of joint production given the same amount of total resources available. 
D)  will end up consuming more cars but fewer computers than before trade. 
A)  are likely to end up consuming less of both goods. 
B)  together will produce more computers but fewer cars. 
C)  because of specialization and increased efficiency, will have increased the amount of joint production given the same amount of total resources available. 
D)  will end up consuming more cars but fewer computers than before trade.

Question 16

If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 3 hats is _______ sweater(s).

Accepted Answer

A)  1 
B)  3 
C)  22 
D)  28 
A)  1 
B)  3 
C)  22 
D)  28

Question 17

If the executives of the U.S.silicon-chip industry lobby Congress for protection from imports on the grounds that theirs is a new industry that needs time to develop technological efficiency, they are using the:

Accepted Answer

A)  environmental standards argument. 
B)  infant industry argument. 
C)  cheap foreign labor argument. 
D)  national security argument. 
A)  environmental standards argument. 
B)  infant industry argument. 
C)  cheap foreign labor argument. 
D)  national security argument.

Question 18

A tariff imposed on U.S.imports into Japan tends to:

Accepted Answer

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

Question 19

Countries that engage in trade will tend to specialize in goods in which they have a(n) _______ and will _______ those goods.

Accepted Answer

A)  comparative advantage; import 
B)  absolute advantage; export 
C)  comparative advantage; export 
D)  economic profit; import 
A)  comparative advantage; import 
B)  absolute advantage; export 
C)  comparative advantage; export 
D)  economic profit; import

Question 20

The job protection argument states that trade restrictions are needed to prevent the loss of jobs in domestic industries.

Accepted Answer

A) True 
 B)False

A country that can produce everything "better" than another country will have no reason to engage in trade.

Voluntary trade restrictions by foreign countries on their exports to the United States raise the price domestic consumers pay and also raise the price foreign consumers pay.

A regulation that specifies the maximum amount of a good or service that may be imported during a specified period of time is a:

Most nations all over the world have raised trade barriers over the past decade.

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) Which of the following statements is true?

Which of the following statements is true?

The infant industry argument for tariffs against free trade is sometimes supported because:

The results of a U.S.quota on the importation of Japanese automobiles is likely to _ for automobiles in the United States and _ automobiles in Japan.

When a domestic country exports goods to and imports goods from a foreign country, in the short run domestic:

International exchange in which countries both import and export the same good is called:

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) Which of the following statements is false?

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) Through exchange, both Alphaland and Omegaland:

If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 3 hats is _______ sweater(s).

If the executives of the U.S.silicon-chip industry lobby Congress for protection from imports on the grounds that theirs is a new industry that needs time to develop technological efficiency, they are using the:

A tariff imposed on U.S.imports into Japan tends to:

Countries that engage in trade will tend to specialize in goods in which they have a(n) _ and will _ those goods.

The job protection argument states that trade restrictions are needed to prevent the loss of jobs in domestic industries.

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

A country that can produce everything "better" than another country will have no reason to engage in trade.

Voluntary trade restrictions by foreign countries on their exports to the United States raise the price domestic consumers pay and also raise the price foreign consumers pay.

A regulation that specifies the maximum amount of a good or service that may be imported during a specified period of time is a:

Most nations all over the world have raised trade barriers over the past decade.

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) Which of the following statements is true?

Which of the following statements is true?

The infant industry argument for tariffs against free trade is sometimes supported because:

The results of a U.S.quota on the importation of Japanese automobiles is likely to _______ for automobiles in the United States and _______ automobiles in Japan.

When a domestic country exports goods to and imports goods from a foreign country, in the short run domestic:

International exchange in which countries both import and export the same good is called:

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) Which of the following statements is false?

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) Through exchange, both Alphaland and Omegaland:

If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 3 hats is _______ sweater(s).

If the executives of the U.S.silicon-chip industry lobby Congress for protection from imports on the grounds that theirs is a new industry that needs time to develop technological efficiency, they are using the:

A tariff imposed on U.S.imports into Japan tends to:

Countries that engage in trade will tend to specialize in goods in which they have a(n) _______ and will _______ those goods.

The job protection argument states that trade restrictions are needed to prevent the loss of jobs in domestic industries.

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

The results of a U.S.quota on the importation of Japanese automobiles is likely to _ for automobiles in the United States and _ automobiles in Japan.

Countries that engage in trade will tend to specialize in goods in which they have a(n) _ and will _ those goods.