Question 1

It is impossible for a nation to have a comparative advantage in producing everything.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Answer the question on the basis of the following production possibilities data for two countries,Alpha and Beta,which have populations of equal size. $\begin{array}{c}
\quad\quad\underline{\text { Alpha's Production Possibilities }}\
\begin{array}{lll}
 \
 \text {Fish (Tons)}\
  \text {Chips (Tons)} 
\end{array}
\begin{array}{c}
\underline{\text {A }}\
 80 \
0
\end{array}
\begin{array}{c}
\underline{\text {B }}\
 60 \
5
\end{array}
\begin{array}{c}
\underline{\text {C }}\
 40 \
10
\end{array}
\begin{array}{c}
\underline{\text {D }}\
20 \
15
\end{array}
\begin{array}{c}
\underline{\text {E }}\
0 \
20 
\end{array}
\end{array}$

$\begin{array}{c}
\quad\quad\underline{\text { Beta's Production Possibilities }}\
\begin{array}{lll}
 \
 \text {Fish (Tons)}\
  \text {Chips (Tons)} 
\end{array}
\begin{array}{c}
\underline{\text {A }}\
240 \
0
\end{array}
\begin{array}{c}
\underline{\text {B }}\
 180 \
10
\end{array}
\begin{array}{c}
\underline{\text {C }}\
120 \
20
\end{array}
\begin{array}{c}
\underline{\text {D }}\
60 \
30
\end{array}
\begin{array}{c}
\underline{\text {E }}\
0 \
40 
\end{array}
\end{array}$

Refer to the given data.Suppose that before specialization and trade Alpha chose production alternative C and Beta chose production alternative B.After specialization and trade,the gains will be:

Accepted Answer

A)  20 tons of fish. 
B)  20 tons of chips. 
C)  20 tons of fish and 20 tons of chips. 
D)  240 tons of fish and 20 tons of chips. 
A)  20 tons of fish. 
B)  20 tons of chips. 
C)  20 tons of fish and 20 tons of chips. 
D)  240 tons of fish and 20 tons of chips.

Question 4

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that:

Accepted Answer

A)  labor costs and product prices are not related. 
B)  there is no discernible relationship between wage rates and labor productivity. 
C)  wage rates and labor productivity are directly related. 
D)  wage rates and labor productivity are inversely related. 
A)  labor costs and product prices are not related. 
B)  there is no discernible relationship between wage rates and labor productivity. 
C)  wage rates and labor productivity are directly related. 
D)  wage rates and labor productivity are inversely related.

Question 5

A nation's import demand curve for a specific product:

Accepted Answer

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

Question 6

In comparing a tariff and an import quota,we find that:

Accepted Answer

A)  the tariff and quota both generate the same amount of revenue for the U.S.Treasury. 
B)  the tariff generates revenue for the U.S.Treasury,but the quota does not. 
C)  the quota generates revenue for the U.S.Treasury,but the tariff does not. 
D)  neither the tariff nor the quota generates revenue for the U.S.Treasury. 
A)  the tariff and quota both generate the same amount of revenue for the U.S.Treasury. 
B)  the tariff generates revenue for the U.S.Treasury,but the quota does not. 
C)  the quota generates revenue for the U.S.Treasury,but the tariff does not. 
D)  neither the tariff nor the quota generates revenue for the U.S.Treasury.

Question 7

Excise taxes on imported goods that help shield domestic producers of the good are called:

Accepted Answer

A)  protective tariffs. 
B)  import quotas. 
C)  revenue tariffs. 
D)  voluntary export restrictions. 
A)  protective tariffs. 
B)  import quotas. 
C)  revenue tariffs. 
D)  voluntary export restrictions.

Question 8

Answer the question on the basis of the following information about the cost ratios for two products-fish (F)and chicken (C)-in countries Singsong and Harmony.Assume that production occurs under conditions of constant costs and these are the only two nations in the world. Singsong: 1F = 2C
Harmony: 1F = 4C
Refer to the given information.If these two nations specialize based on comparative advantage:

Accepted Answer

A)  Singsong will both produce chicken and catch fish. 
B)  Harmony will both produce chicken and catch fish. 
C)  Harmony will produce chicken and Singsong will catch fish. 
D)  Singsong will produce chicken and Harmony will catch fish. 
A)  Singsong will both produce chicken and catch fish. 
B)  Harmony will both produce chicken and catch fish. 
C)  Harmony will produce chicken and Singsong will catch fish. 
D)  Singsong will produce chicken and Harmony will catch fish.

Question 9

The World Trade Organization was established as a successor to:

Accepted Answer

A)  GATT. 
B)  NAFTA. 
C)  the EU. 
D)  the Doha Development Agenda. 
A)  GATT. 
B)  NAFTA. 
C)  the EU. 
D)  the Doha Development Agenda.

Question 10

The World Trade Organization:

Accepted Answer

A)  is also known as the International Monetary Fund (IMF). 
B)  is also known as NAFTA. 
C)  was established to resolve disputes arising under world trade rules. 
D)  enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit. 
A)  is also known as the International Monetary Fund (IMF). 
B)  is also known as NAFTA. 
C)  was established to resolve disputes arising under world trade rules. 
D)  enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.

Question 11

How many European nations belong to the European Union (EU)?

Accepted Answer

A)  All of the nations of Europe automatically belong to the EU. 
B)  17 
C)  28 
D)  10 
A)  All of the nations of Europe automatically belong to the EU. 
B)  17 
C)  28 
D)  10

Question 12

A side benefit of international trade is that it links national interests and increases the opportunity costs of war.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  Chemicals. 
B)  Autos. 
C)  Watches. 
D)  Wool. 
A)  Chemicals. 
B)  Autos. 
C)  Watches. 
D)  Wool.

Question 14

Tariffs create larger gains to domestic producers than losses to domestic consumers.

Accepted Answer

A) True 
 B)False

Question 15

In the theory of comparative advantage,a good should be produced in that nation where:

Accepted Answer

A)  the production possibilities line lies further to the right than the trading possibilities line. 
B)  its cost is least in terms of alternative goods that might otherwise be produced. 
C)  its absolute cost in terms of real resources used is least. 
D)  its absolute money cost of production is least. 
A)  the production possibilities line lies further to the right than the trading possibilities line. 
B)  its cost is least in terms of alternative goods that might otherwise be produced. 
C)  its absolute cost in terms of real resources used is least. 
D)  its absolute money cost of production is least.

Question 16

Studies show that:

Accepted Answer

A)  it is impossible to estimate the benefits of trade barriers. 
B)  costs and benefits of trade barriers are about equal. 
C)  benefits of trade barriers exceed their costs in developing nations. 
D)  costs of trade barriers exceed their benefits,creating an efficiency loss for society. 
A)  it is impossible to estimate the benefits of trade barriers. 
B)  costs and benefits of trade barriers are about equal. 
C)  benefits of trade barriers exceed their costs in developing nations. 
D)  costs of trade barriers exceed their benefits,creating an efficiency loss for society.

Question 17

In 2012,the United States:

Accepted Answer

A)  imported more services than it exported. 
B)  imported more goods than it exported. 
C)  traded mainly with developing nations such as Mexico and India. 
D)  had a small trade surplus in goods and services. 
A)  imported more services than it exported. 
B)  imported more goods than it exported. 
C)  traded mainly with developing nations such as Mexico and India. 
D)  had a small trade surplus in goods and services.

Question 18

In order for mutually beneficial trade to occur between two otherwise isolated nations:

Accepted Answer

A)  each nation must be able to produce at least one good absolutely cheaper than the other. 
B)  each nation must be able to produce at least one good relatively cheaper than the other. 
C)  each nation must face constant costs in the production of the good it exports. 
D)  one nation's production must be labor-intensive while the other nation's production is capital-intensive. 
A)  each nation must be able to produce at least one good absolutely cheaper than the other. 
B)  each nation must be able to produce at least one good relatively cheaper than the other. 
C)  each nation must face constant costs in the production of the good it exports. 
D)  one nation's production must be labor-intensive while the other nation's production is capital-intensive.

Question 19

Barriers to free trade impair efficiency in the international allocation of resources.

Accepted Answer

A) True 
 B)False

Question 20

A nation's export supply curve is downsloping and its import demand curve is upsloping.

Accepted Answer

A) True 
 B)False

It is impossible for a nation to have a comparative advantage in producing everything.

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

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that:

A nation's import demand curve for a specific product:

In comparing a tariff and an import quota,we find that:

Excise taxes on imported goods that help shield domestic producers of the good are called:

The World Trade Organization was established as a successor to:

The World Trade Organization:

How many European nations belong to the European Union (EU)?

A side benefit of international trade is that it links national interests and increases the opportunity costs of war.

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

Tariffs create larger gains to domestic producers than losses to domestic consumers.

In the theory of comparative advantage,a good should be produced in that nation where:

Studies show that:

In 2012,the United States:

In order for mutually beneficial trade to occur between two otherwise isolated nations:

Barriers to free trade impair efficiency in the international allocation of resources.

A nation's export supply curve is downsloping and its import demand curve is upsloping.

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters

Exam 39: International Trade

It is impossible for a nation to have a comparative advantage in producing everything.

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

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that:

A nation's import demand curve for a specific product:

In comparing a tariff and an import quota,we find that:

Excise taxes on imported goods that help shield domestic producers of the good are called:

The World Trade Organization was established as a successor to:

The World Trade Organization:

How many European nations belong to the European Union (EU)?

A side benefit of international trade is that it links national interests and increases the opportunity costs of war.

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

Tariffs create larger gains to domestic producers than losses to domestic consumers.

In the theory of comparative advantage,a good should be produced in that nation where:

Studies show that:

In 2012,the United States:

In order for mutually beneficial trade to occur between two otherwise isolated nations:

Barriers to free trade impair efficiency in the international allocation of resources.

A nation's export supply curve is downsloping and its import demand curve is upsloping.

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters