Question 1

(Consider This)Madison,the CPA,is faster than Mason,the house painter,at both accounting services and painting.This means that:

Accepted Answer

A)  there is no reason for them to trade services. 
B)  Madison should trade her accounting services for Mason's painting services,so long as Madison is relatively more efficient at accounting services. 
C)  Madison should trade her accounting services for Mason's painting services,so long as Madison is relatively more efficient at painting. 
D)  Madison has the comparative advantage in both services. 
A)  there is no reason for them to trade services. 
B)  Madison should trade her accounting services for Mason's painting services,so long as Madison is relatively more efficient at accounting services. 
C)  Madison should trade her accounting services for Mason's painting services,so long as Madison is relatively more efficient at painting. 
D)  Madison has the comparative advantage in both services.

Question 2

Research studies indicate that:

Accepted Answer

A)  U.S.producers gain more from tariffs than U.S.consumers lose. 
B)  the costs of trade restrictions are proportionately higher for high-income groups than for low-income groups. 
C)  the revenue from tariffs equals the total cost that tariffs impose on consumers. 
D)  U.S.consumers lose more from tariffs than U.S.producers gain. 
A)  U.S.producers gain more from tariffs than U.S.consumers lose. 
B)  the costs of trade restrictions are proportionately higher for high-income groups than for low-income groups. 
C)  the revenue from tariffs equals the total cost that tariffs impose on consumers. 
D)  U.S.consumers lose more from tariffs than U.S.producers gain.

Question 3

Suppose the United States sets a limit on the number of tons of sugar that can be imported each year.This is an example of a(n):

Accepted Answer

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

Question 4

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 5

In a two-nation model,the equilibrium world price will occur where:

Accepted Answer

A)  one nation's export supply curve intersects the other nation's import demand curve. 
B)  exports are exactly twice the level of imports. 
C)  both nations' export supply curves are horizontal. 
D)  both nations' import demand curves are vertical. 
A)  one nation's export supply curve intersects the other nation's import demand curve. 
B)  exports are exactly twice the level of imports. 
C)  both nations' export supply curves are horizontal. 
D)  both nations' import demand curves are vertical.

Question 6

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

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

The given data show that:

Accepted Answer

A)  Beta has a comparative advantage in producing chips. 
B)  Alpha has a comparative advantage in catching fish. 
C)  Alpha is subject to constant costs and Beta is subject to increasing costs. 
D)  Beta is more efficient than Alpha both in catching fish and in producing chips. 
A)  Beta has a comparative advantage in producing chips. 
B)  Alpha has a comparative advantage in catching fish. 
C)  Alpha is subject to constant costs and Beta is subject to increasing costs. 
D)  Beta is more efficient than Alpha both in catching fish and in producing chips.

Question 7

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 8

As it relates to international trade,dumping:

Accepted Answer

A)  is a form of price discrimination illegal under U.S.antitrust laws. 
B)  is the practice of selling goods in a foreign market at less than cost. 
C)  constitutes a general case for permanent tariffs. 
D)  is defined as selling more goods than allowed by an import quota. 
A)  is a form of price discrimination illegal under U.S.antitrust laws. 
B)  is the practice of selling goods in a foreign market at less than cost. 
C)  constitutes a general case for permanent tariffs. 
D)  is defined as selling more goods than allowed by an import quota.

Question 9

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.The domestic equilibrium prices of steel in Alpha and Beta are:

Accepted Answer

A)  $5 and $4,respectively. 
B)  $2 and $4,respectively. 
C)  $3 and $2,respectively. 
D)  $1 and $2,respectively. 
A)  $5 and $4,respectively. 
B)  $2 and $4,respectively. 
C)  $3 and $2,respectively. 
D)  $1 and $2,respectively.

Question 10

Which of the following arguments contends that certain industries need to be protected in the interest of national security?

Accepted Answer

A)  The increased domestic employment argument. 
B)  The cheap foreign labor argument. 
C)  The diversification-for-stability argument. 
D)  The military self-sufficiency argument. 
A)  The increased domestic employment argument. 
B)  The cheap foreign labor argument. 
C)  The diversification-for-stability argument. 
D)  The military self-sufficiency argument.

Question 11

Which of the following statements about the European Union (EU)is true?

Accepted Answer

A)  All members of the EU use a common currency (the euro). 
B)  The EU has abolished most trade barriers among participating countries,and has common tariffs applied to non-EU goods. 
C)  The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital. 
D)  Trade within the EU is liberalized,but EU nations set most of their own policies with regard to trade with non-EU nations. 
A)  All members of the EU use a common currency (the euro). 
B)  The EU has abolished most trade barriers among participating countries,and has common tariffs applied to non-EU goods. 
C)  The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital. 
D)  Trade within the EU is liberalized,but EU nations set most of their own policies with regard to trade with non-EU nations.

Question 12

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.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 13

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.The terms of trade will be at or within the 1X = 1½Y to 1X = 2/3Y range.

Accepted Answer

A) True 
 B)False

Question 14

Offshoring benefits some firms by reducing their producing costs and maintaining their global competitiveness.

Accepted Answer

A) True 
 B)False

Question 15

Answer the question on the basis of the following production possibilities tables for two countries,Latalia and Trombonia: $\begin{array}{c}
\quad\quad\quad\underline{\text {Latalia's Production Possibilities}}\
\begin{array}{lll}
\
 \text {Pork (Tons)}\
 \text {Beans (Tons)}
\end{array}
\begin{array}{c}
\underline{\text {A}}\
4\
0
\end{array}
\begin{array}{c}
\underline{\text {B}}\
3\
5
\end{array}
\begin{array}{c}
\underline{\text {C}}\
2\
10
\end{array}
\begin{array}{c}
\underline{\text {D}}\
1\
15
\end{array}
\begin{array}{c}
\underline{\text {E}}\
0\
25
\end{array}
\end{array}$
 $\begin{array}{c}
\quad\quad\quad\underline{\text {Trombonia's Production Possibilities  }}\
\begin{array}{lll}
\
 \text {Pork (Tons)}\
 \text {Beans (Tons)}
\end{array}
\begin{array}{c}
\underline{\text {A}}\
8\
0
\end{array}
\begin{array}{c}
\underline{\text {B}}\
6\
6
\end{array}
\begin{array}{c}
\underline{\text {C}}\
4\
12
\end{array}
\begin{array}{c}
\underline{\text {D}}\
2\
18
\end{array}
\begin{array}{c}
\underline{\text {E}}\
0\
24
\end{array}
\end{array}$
 The given data indicate that production in:

Accepted Answer

A)  both Latalia and Trombonia is subject to constant opportunity costs. 
B)  Trombonia is subject to decreasing costs,but production in Latalia occurs under increasing opportunity costs. 
C)  Latalia is subject to increasing costs,but production in Trombonia occurs under constant opportunity costs. 
D)  both Latalia and Trombonia are subject to the law of increasing opportunity costs. 
A)  both Latalia and Trombonia is subject to constant opportunity costs. 
B)  Trombonia is subject to decreasing costs,but production in Latalia occurs under increasing opportunity costs. 
C)  Latalia is subject to increasing costs,but production in Trombonia occurs under constant opportunity costs. 
D)  both Latalia and Trombonia are subject to the law of increasing opportunity costs.

Question 16

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 would prefer terms of trade at,or close to,1X = 1½Y.

Accepted Answer

A) True 
 B)False

Question 17

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.Beta would prefer terms of trade at,or close to,1X = 1½Y.

Accepted Answer

A) True 
 B)False

Question 18

During the Great Depression,most nations lowered tariffs and abolished import quotas to encourage the flow of trade.

Accepted Answer

A) True 
 B)False

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.Assuming that Alpha and Beta are the only two nations in the world,the equilibrium world price must be lower than $4 because at $4:

Accepted Answer

A)  both nations want to import steel. 
B)  both nations want to export steel. 
C)  Beta wants to export more than Alpha. 
D)  Alpha wants to import more than Beta. 
A)  both nations want to import steel. 
B)  both nations want to export steel. 
C)  Beta wants to export more than Alpha. 
D)  Alpha wants to import more than Beta.

Question 20

In recent years,the United States has:

Accepted Answer

A)  exported more services abroad than it has imported. 
B)  had a small goods trade surplus with Japan. 
C)  had a large goods trade surplus with the rest of the world. 
D)  maintained an overall trade surplus (goods and services combined)with the rest of the world. 
A)  exported more services abroad than it has imported. 
B)  had a small goods trade surplus with Japan. 
C)  had a large goods trade surplus with the rest of the world. 
D)  maintained an overall trade surplus (goods and services combined)with the rest of the world.

(Consider This)Madison,the CPA,is faster than Mason,the house painter,at both accounting services and painting.This means that:

Research studies indicate that:

Suppose the United States sets a limit on the number of tons of sugar that can be imported each year.This is an example of a(n):

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

In a two-nation model,the equilibrium world price will occur where:

Answer the question on the basis of the following production possibilities data for two countries,Alpha and Beta,which have populations of equal size. Fish (Tons) Chips (Tons) 80 0 60 5 40 10 20 15 0 20 Fish (Tons) Chips (Tons) 240 0 180 10 120 20 60 30 0 40 The given data show that:

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

As it relates to international trade,dumping:

Which of the following arguments contends that certain industries need to be protected in the interest of national security?

Which of the following statements about the European Union (EU)is true?

Offshoring benefits some firms by reducing their producing costs and maintaining their global competitiveness.

Answer the question on the basis of the following production possibilities tables for two countries,Latalia and Trombonia: Pork (Tons) Beans (Tons) 4 0 3 5 2 10 1 15 0 25 Pork (Tons) Beans (Tons) 8 0 6 6 4 12 2 18 0 24 The given data indicate that production in:

During the Great Depression,most nations lowered tariffs and abolished import quotas to encourage the flow of trade.

In recent years,the United States has:

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

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Exam 39: International Trade

(Consider This)Madison,the CPA,is faster than Mason,the house painter,at both accounting services and painting.This means that:

Research studies indicate that:

Suppose the United States sets a limit on the number of tons of sugar that can be imported each year.This is an example of a(n):

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

In a two-nation model,the equilibrium world price will occur where:

Answer the question on the basis of the following production possibilities data for two countries,Alpha and Beta,which have populations of equal size. Fish (Tons) Chips (Tons) 80 0 60 5 40 10 20 15 0 20 Fish (Tons) Chips (Tons) 240 0 180 10 120 20 60 30 0 40 The given data show that:

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

As it relates to international trade,dumping:

Which of the following arguments contends that certain industries need to be protected in the interest of national security?

Which of the following statements about the European Union (EU)is true?

Offshoring benefits some firms by reducing their producing costs and maintaining their global competitiveness.

Answer the question on the basis of the following production possibilities tables for two countries,Latalia and Trombonia: Pork (Tons) Beans (Tons) 4 0 3 5 2 10 1 15 0 25 Pork (Tons) Beans (Tons) 8 0 6 6 4 12 2 18 0 24 The given data indicate that production in:

During the Great Depression,most nations lowered tariffs and abolished import quotas to encourage the flow of trade.

In recent years,the United States has:

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