Question 1

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n):

Accepted Answer

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

Question 2

Answer the question on the basis of the following data for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. $\begin{array}{c}
\underline{\text { Domestic Market For Steel, Alpha }}\
\begin{array}{c}
\underline{Q_{s}}\  
60\
40\
30\
20\
10 
\end{array}
\begin{array}{c}
\underline{P}\
\$ 5 \
4 \
3 \
2 \
1 
\end{array}
\begin{array}{l}
\underline{Q_{d}} \
10 \
20 \
30 \
40 \
50 
\end{array}
\end{array}$

$\begin{array}{c}
\underline{\text { Domestic Market For Steel, Beta  }}\
\begin{array}{c}
\underline{Q_{s}}\  
80 \
70 \
60 \
50 \
40
\end{array}
\begin{array}{c}
\underline{P}\
\$ 5 \
4 \
3 \
2 \
1 
\end{array}
\begin{array}{l}
\underline{Q_{d}} \
20 \
30 \
40 \
50 \
60 
\end{array}
\end{array}$

Refer to the given data.At a world price of $5:

Accepted Answer

A)  Alpha will want to import 50 units of steel. 
B)  Beta will want to import 60 units of steel. 
C)  Alpha will want to export 50 units of steel. 
D)  neither country will want to export steel. 
A)  Alpha will want to import 50 units of steel. 
B)  Beta will want to import 60 units of steel. 
C)  Alpha will want to export 50 units of steel. 
D)  neither country will want to export steel.

Question 3

Which of the following best describes economists' general assessment of the impacts of offshoring?

Accepted Answer

A)  Offshoring has an overall negative impact on the U.S.economy because of the significant domestic job losses it causes. 
B)  Offshoring benefits the U.S.economy by promoting greater specialization and exchange of goods and services based on comparative advantage. 
C)  Offshoring provides some cost advantages but generally results in much-lower-quality goods for consumers. 
D)  Job losses from offshoring are magnified by job losses in complementary industries. 
A)  Offshoring has an overall negative impact on the U.S.economy because of the significant domestic job losses it causes. 
B)  Offshoring benefits the U.S.economy by promoting greater specialization and exchange of goods and services based on comparative advantage. 
C)  Offshoring provides some cost advantages but generally results in much-lower-quality goods for consumers. 
D)  Job losses from offshoring are magnified by job losses in complementary industries.

Question 4

The World Trade Organization is comprised of 28 European nations and dedicated to abolishing trade barriers and integrating their economies.

Accepted Answer

A) True 
 B)False

Question 5

Answer the question on the basis of the following production possibilities data for Gamma and Sigma.All data are in tons. Gamma's production possibilities: $\begin{array}{llcc}
&\underline{\text { A } }&\underline{\text {B}}&\underline{\text { C} } &\underline{\text { D } }&\underline{\text {E}}\
\text { Tea } &120&90&60&30&0\
\text { Pots}&0&30&60&90&120
\end{array}$
 Sigma's production possibilities: $\begin{array}{llcc}
&\underline{\text { A } }&\underline{\text {B}}&\underline{\text { C} } &\underline{\text { D } }&\underline{\text {E}}\
\text { Tea } &120&90&60&30&0\
\text { Pots}&0&30&60&90&120
\end{array}$
 Refer to the given data.Assume that before specialization and trade,Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage,the gains from specialization and trade will be:

Accepted Answer

A)  40 tons of pots. 
B)  20 tons of tea and 20 tons of pots. 
C)  20 tons of tea. 
D)  40 tons of tea. 
A)  40 tons of pots. 
B)  20 tons of tea and 20 tons of pots. 
C)  20 tons of tea. 
D)  40 tons of tea.

Question 6

"Offshoring" refers to:

Accepted Answer

A)  importing goods,services,and resources. 
B)  stashing money in offshore accounts for the purpose of avoiding taxes. 
C)  shifting work overseas that was previously done domestically. 
D)  exporting key resources. 
A)  importing goods,services,and resources. 
B)  stashing money in offshore accounts for the purpose of avoiding taxes. 
C)  shifting work overseas that was previously done domestically. 
D)  exporting key resources.

Question 7

Answer the question on the basis of the following information.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.
Refer to the given information.Alpha should specialize in Y and Beta in X.

Accepted Answer

A) True 
 B)False

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.Which one of the following would not be feasible terms for trade between Singsong and Harmony?

Accepted Answer

A)  1 fish for 2½ chicken 
B)  1 fish for 3 chicken 
C)  1 chicken for 1/5 of a fish 
D)  1 chicken for 1/3 of a fish 
A)  1 fish for 2½ chicken 
B)  1 fish for 3 chicken 
C)  1 chicken for 1/5 of a fish 
D)  1 chicken for 1/3 of a fish

Question 9

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

Accepted Answer

A)  Clothing. 
B)  Wool. 
C)  Sunflower seeds. 
D)  Chemicals. 
A)  Clothing. 
B)  Wool. 
C)  Sunflower seeds. 
D)  Chemicals.

Question 10

In effect,tariffs on imports are:

Accepted Answer

A)  special taxes on domestic producers. 
B)  subsidies to domestic consumers. 
C)  subsidies to foreign producers. 
D)  subsidies for domestic producers. 
A)  special taxes on domestic producers. 
B)  subsidies to domestic consumers. 
C)  subsidies to foreign producers. 
D)  subsidies for domestic producers.

Question 11

Countries engaged in international trade specialize in production based on:

Accepted Answer

A)  relative levels of GDP. 
B)  comparative advantage. 
C)  relative exchange rates. 
D)  relative inflation rates. 
A)  relative levels of GDP. 
B)  comparative advantage. 
C)  relative exchange rates. 
D)  relative inflation rates.

Question 12

Export supply curves are __________________;import demand curves are ___________________.

Accepted Answer

A)  horizontal;vertical 
B)  vertical;horizontal 
C)  downsloping;upsloping 
D)  upsloping;downsloping 
A)  horizontal;vertical 
B)  vertical;horizontal 
C)  downsloping;upsloping 
D)  upsloping;downsloping

Question 13

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.

Accepted Answer

A) True 
 B)False

Question 14

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)  14 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)  14 percent of U.S.GDP.

Question 15

Frederic Bastiat's satirical argument against protectionism called for protecting domestic producers from:

Accepted Answer

A)  fire. 
B)  the sun. 
C)  other European countries. 
D)  invention of the electric light. 
A)  fire. 
B)  the sun. 
C)  other European countries. 
D)  invention of the electric light.

Question 16

Economists generally view offshoring as detrimental to the U.S.economy.

Accepted Answer

A) True 
 B)False

Question 17

The "eurozone":

Accepted Answer

A)  is another name for the European Union. 
B)  refers to the common currency used by all European Union members. 
C)  is a geographic region in Europe with no national sovereignty,where free trade between European nations is allowed to occur. 
D)  is the subset of the EU that uses a common currency. 
A)  is another name for the European Union. 
B)  refers to the common currency used by all European Union members. 
C)  is a geographic region in Europe with no national sovereignty,where free trade between European nations is allowed to occur. 
D)  is the subset of the EU that uses a common currency.

Question 18

Answer the question on the basis of the following domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. $\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity } \
\text { Supplied } \
\text { (Domestic) }
\end{array} & \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { (Domestic) }
\end{array} \
 12 & \$ 5 & 2 \
10 & 4 & 4 \
7 & 3 & 7 \
4 & 2 & 11 \
1 & 1 & 16
\end{array}$ Refer to the given data.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Accepted Answer

A)  1 unit and 15 units. 
B)  4 units and 7 units. 
C)  7 units and 0 units. 
D)  4 units and 6 units. 
A)  1 unit and 15 units. 
B)  4 units and 7 units. 
C)  7 units and 0 units. 
D)  4 units and 6 units.

Question 19

Answer the question on the basis of the following data for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. $\begin{array}{c}
\underline{\text { Domestic Market For Steel, Alpha }}\
\begin{array}{c}
\underline{Q_{s}}\  
60\
40\
30\
20\
10 
\end{array}
\begin{array}{c}
\underline{P}\
\$ 5 \
4 \
3 \
2 \
1 
\end{array}
\begin{array}{l}
\underline{Q_{d}} \
10 \
20 \
30 \
40 \
50 
\end{array}
\end{array}$

$\begin{array}{c}
\underline{\text { Domestic Market For Steel, Beta  }}\
\begin{array}{c}
\underline{Q_{s}}\  
80 \
70 \
60 \
50 \
40
\end{array}
\begin{array}{c}
\underline{P}\
\$ 5 \
4 \
3 \
2 \
1 
\end{array}
\begin{array}{l}
\underline{Q_{d}} \
20 \
30 \
40 \
50 \
60 
\end{array}
\end{array}$

Refer to the given data.At a world price of $2:

Accepted Answer

A)  Alpha will want to import 20 units of steel. 
B)  Beta will want to export 20 units of steel. 
C)  Alpha will want to export 20 units of steel. 
D)  neither country will want to import steel. 
A)  Alpha will want to import 20 units of steel. 
B)  Beta will want to export 20 units of steel. 
C)  Alpha will want to export 20 units of steel. 
D)  neither country will want to import steel.

Question 20

Tariffs:

Accepted Answer

A)  may be imposed either to raise revenue (revenue tariffs)or to shield domestic producers from foreign competition (protective tariffs). 
B)  are also called import quotas. 
C)  are excise taxes on goods exported abroad. 
D)  are per-unit subsidies designed to promote exports. 
A)  may be imposed either to raise revenue (revenue tariffs)or to shield domestic producers from foreign competition (protective tariffs). 
B)  are also called import quotas. 
C)  are excise taxes on goods exported abroad. 
D)  are per-unit subsidies designed to promote exports.

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n):

Which of the following best describes economists' general assessment of the impacts of offshoring?

The World Trade Organization is comprised of 28 European nations and dedicated to abolishing trade barriers and integrating their economies.

"Offshoring" refers to:

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

In effect,tariffs on imports are:

Countries engaged in international trade specialize in production based on:

Export supply curves are ;import demand curves are _.

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.

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

Frederic Bastiat's satirical argument against protectionism called for protecting domestic producers from:

Economists generally view offshoring as detrimental to the U.S.economy.

The "eurozone":

Tariffs:

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

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n):

Which of the following best describes economists' general assessment of the impacts of offshoring?

The World Trade Organization is comprised of 28 European nations and dedicated to abolishing trade barriers and integrating their economies.

"Offshoring" refers to:

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

In effect,tariffs on imports are:

Countries engaged in international trade specialize in production based on:

Export supply curves are __________________;import demand curves are ___________________.

The nation that has a comparative advantage in a particular product will be the only world exporter of that product.

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

Frederic Bastiat's satirical argument against protectionism called for protecting domestic producers from:

Economists generally view offshoring as detrimental to the U.S.economy.

The "eurozone":

Tariffs:

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

Export supply curves are ;import demand curves are _.