Question 1

The answer is: "It allows the inhabitants of a country to consume at a level beyond its production possibilities frontier." What is the question?

Accepted Answer

A)  What do newly discovered resources do? 
B)  What does technology do? 
C)  What does specialization and international trade do? 
D)  What does specialization do? 
E)  a and b 
A)  What do newly discovered resources do? 
B)  What does technology do? 
C)  What does specialization and international trade do? 
D)  What does specialization do? 
E)  a and b

Question 2

International trade exists because countries

Accepted Answer

A)  can make themselves better off through trade. 
B)  want to be neighborly with each other. 
C)  want to be political allies. 
D)  want to improve diplomatic relations with each other. 
E)  want to avoid war with each other. 
A)  can make themselves better off through trade. 
B)  want to be neighborly with each other. 
C)  want to be political allies. 
D)  want to improve diplomatic relations with each other. 
E)  want to avoid war with each other.

Question 3

With a quota,the __________ is greater than the __________.

Accepted Answer

A)  loss in producers' surplus; gain in consumers' surplus 
B)  loss in consumers' surplus; loss in producers' surplus plus higher total revenues on the imported goods 
C)  loss in producers' surplus plus higher total revenues on the imported goods; consumers' surplus 
D)  tax; revenue 
E)  quota-determined price; quota-determined output 
A)  loss in producers' surplus; gain in consumers' surplus 
B)  loss in consumers' surplus; loss in producers' surplus plus higher total revenues on the imported goods 
C)  loss in producers' surplus plus higher total revenues on the imported goods; consumers' surplus 
D)  tax; revenue 
E)  quota-determined price; quota-determined output

Question 4

The answer is: "The difference between the price buyers pay for a good and the maximum or highest price they would have paid for the good." This is the definition for

Accepted Answer

A)  taxes. 
B)  producers' surplus. 
C)  consumers' surplus. 
D)  the sum of producers' and consumers' surpluses. 
E)  the welfare triangle. 
A)  taxes. 
B)  producers' surplus. 
C)  consumers' surplus. 
D)  the sum of producers' and consumers' surpluses. 
E)  the welfare triangle.

Question 5

It is argued that certain industries should be protected from foreign competition because they are needed to secure the United States from foreign aggression.This argument is called the __________ argument.

Accepted Answer

A)  saving domestic-jobs 
B)  low foreign wages 
C)  foreign export subsidies 
D)  national defense 
A)  saving domestic-jobs 
B)  low foreign wages 
C)  foreign export subsidies 
D)  national defense

Question 6

"Dumping" refers to

Accepted Answer

A)  the sale of goods abroad at a price below their cost and below the price charged in the domestic market. 
B)  unloading of foreign goods on domestic docks. 
C)  government actions to remedy "unfair" trade practices. 
D)  buying goods at low prices in foreign countries and selling them at high prices in the United States. 
A)  the sale of goods abroad at a price below their cost and below the price charged in the domestic market. 
B)  unloading of foreign goods on domestic docks. 
C)  government actions to remedy "unfair" trade practices. 
D)  buying goods at low prices in foreign countries and selling them at high prices in the United States.

Question 7

-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).Americans purchase __________ million tons of sugar from U.S.producers and import __________ million tons of sugar from abroad.

Accepted Answer

A)  15; 10 
B)  15; 20 
C)  10; 5 
D)  10; 15 
E)  10; 20 
A)  15; 10 
B)  15; 20 
C)  10; 5 
D)  10; 15 
E)  10; 20

Question 8

When countries engage in specialization and international trade,every individual person in those countries will gain.

Accepted Answer

A) True 
 B)False

Question 9

-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).The removal of the $100 per ton tariff would cause a(n)__________ in imports of __________ million tons.

Accepted Answer

A)  increase; 5 
B)  increase; 10 
C)  increase; 15 
D)  decrease; 5 
E)  decrease; 10 
A)  increase; 5 
B)  increase; 10 
C)  increase; 15 
D)  decrease; 5 
E)  decrease; 10

Question 10

Arguments made against free trade include all of the following except

Accepted Answer

A)  national defense considerations justify producing certain goods domestically whether the country has a comparative advantage in their production or not. 
B)  infant industries should be protected from free trade so that they may have time to develop and compete on an even basis with older,more established foreign industries. 
C)  dumping is an unfair trade practice that puts domestic producers of substitute goods at a disadvantage that they should be protected against. 
D)  free trade is inflationary and should be restricted in the domestic interest. 
E)  if foreign governments subsidize their exports,foreign firms that export are given an unfair advantage that domestic producers should be protected against. 
A)  national defense considerations justify producing certain goods domestically whether the country has a comparative advantage in their production or not. 
B)  infant industries should be protected from free trade so that they may have time to develop and compete on an even basis with older,more established foreign industries. 
C)  dumping is an unfair trade practice that puts domestic producers of substitute goods at a disadvantage that they should be protected against. 
D)  free trade is inflationary and should be restricted in the domestic interest. 
E)  if foreign governments subsidize their exports,foreign firms that export are given an unfair advantage that domestic producers should be protected against.

Question 11

Countries that engage in specialization and trade can consume at a level beyond their production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 12

-Refer to Exhibit 34-3.The world price is PW.At this price,Americans purchase Q1 from U.S.producers and import the quantity __________ from foreign producers.

Accepted Answer

A)  Q4 - Q1 
B)  Q2 - Q1 
C)  Q2 - Q4 
D)  Q2 - Q3 
A)  Q4 - Q1 
B)  Q2 - Q1 
C)  Q2 - Q4 
D)  Q2 - Q3

Question 13

-Refer to Exhibit 34-6.Which of the following terms of trade would both countries agree on?

Accepted Answer

A)  1 unit of wine = 2.5 units of cheese 
B)  1 unit of wine = 1.5 units of cheese 
C)  2.5 units of wine = 1 unit of cheese 
D)  1.5 units of wine = 1 unit of cheese 
E)  none of the above 
A)  1 unit of wine = 2.5 units of cheese 
B)  1 unit of wine = 1.5 units of cheese 
C)  2.5 units of wine = 1 unit of cheese 
D)  1.5 units of wine = 1 unit of cheese 
E)  none of the above

Question 14

-Refer to Exhibit 34-10.Jason's opportunity cost of cleaning the house is

Accepted Answer

A)  0.50 mowed lawns. 
B)  1.00 mowed lawns. 
C)  2.00 mowed lawns. 
D)  0.60 mowed lawns. 
A)  0.50 mowed lawns. 
B)  1.00 mowed lawns. 
C)  2.00 mowed lawns. 
D)  0.60 mowed lawns.

Question 15

-Refer to Exhibit 34-12.PW is the price that exists in a free world market.A quota is imposed and imports are Q4 - Q3.Importers gain revenues equal to the area __________.

Accepted Answer

A)  GKL + HIJ 
B)  GCE 
C)  GHJK 
D)  GFEH 
E)  none of the above 
A)  GKL + HIJ 
B)  GCE 
C)  GHJK 
D)  GFEH 
E)  none of the above

Question 16

-Refer to Exhibit 34-7.The world price of good X is $15.Under a policy of free trade,the U.S.production of good X would be

Accepted Answer

A)  10 units. 
B)  20 units. 
C)  25 units. 
D)  50 units. 
E)  none of the above 
A)  10 units. 
B)  20 units. 
C)  25 units. 
D)  50 units. 
E)  none of the above

Question 17

As a result of a quota,both consumers' surplus and producers' surplus fall.

Accepted Answer

A) True 
 B)False

Question 18

A quota on imported avocadoes ______________ the price of avocadoes,_____________ consumers' surplus for avocado buyers,_______________ producers' surplus of avocado growers and __________________ tariff revenue.Because the loss to _____________ is more than the gain to ___________________,there is a net loss to society.

Accepted Answer

A)  raises; increases; decreases; generates; producers; consumers and government 
B)  lowers; increases; decreases; does not generate; producers; consumers 
C)  raises; increases; decreases; does not generate;consumers; producers and importers 
D)  raises; decreases; increases; generates; consumers; producers and government 
A)  raises; increases; decreases; generates; producers; consumers and government 
B)  lowers; increases; decreases; does not generate; producers; consumers 
C)  raises; increases; decreases; does not generate;consumers; producers and importers 
D)  raises; decreases; increases; generates; consumers; producers and government

Question 19

Two major exports for the United States are

Accepted Answer

A)  clothing and office machines. 
B)  soybeans and scientific instruments. 
C)  footwear and fish. 
D)  coffee and diamonds. 
E)  none of the above 
A)  clothing and office machines. 
B)  soybeans and scientific instruments. 
C)  footwear and fish. 
D)  coffee and diamonds. 
E)  none of the above

Question 20

Tariffs and quotas are often imposed when a government is more responsive to __________ interests,and the benefits of those trade restrictions are often __________.

Accepted Answer

A)  consumer; concentrated 
B)  consumer; widely dispersed 
C)  producer; concentrated 
D)  producer; widely dispersed 
A)  consumer; concentrated 
B)  consumer; widely dispersed 
C)  producer; concentrated 
D)  producer; widely dispersed

Exam 21: International Finance

The answer is: "It allows the inhabitants of a country to consume at a level beyond its production possibilities frontier." What is the question?

International trade exists because countries

With a quota,the __________ is greater than the __________.

The answer is: "The difference between the price buyers pay for a good and the maximum or highest price they would have paid for the good." This is the definition for

It is argued that certain industries should be protected from foreign competition because they are needed to secure the United States from foreign aggression.This argument is called the __________ argument.

"Dumping" refers to

-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).Americans purchase __________ million tons of sugar from U.S.producers and import __________ million tons of sugar from abroad.

When countries engage in specialization and international trade,every individual person in those countries will gain.

-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).The removal of the $100 per ton tariff would cause a(n)__________ in imports of __________ million tons.

Arguments made against free trade include all of the following except

Countries that engage in specialization and trade can consume at a level beyond their production possibilities frontier.

-Refer to Exhibit 34-3.The world price is PW.At this price,Americans purchase Q1 from U.S.producers and import the quantity __________ from foreign producers.

-Refer to Exhibit 34-6.Which of the following terms of trade would both countries agree on?

-Refer to Exhibit 34-10.Jason's opportunity cost of cleaning the house is

-Refer to Exhibit 34-12.PW is the price that exists in a free world market.A quota is imposed and imports are Q4 - Q3.Importers gain revenues equal to the area __________.

-Refer to Exhibit 34-7.The world price of good X is $15.Under a policy of free trade,the U.S.production of good X would be

As a result of a quota,both consumers' surplus and producers' surplus fall.

Two major exports for the United States are

Tariffs and quotas are often imposed when a government is more responsive to __________ interests,and the benefits of those trade restrictions are often __________.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

With a quota,the is greater than the .

-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).Americans purchase million tons of sugar from U.S.producers and import million tons of sugar from abroad.

-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).The removal of the $100 per ton tariff would cause a(n) in imports of million tons.

-Refer to Exhibit 34-3.The world price is P_W.At this price,Americans purchase Q₁ from U.S.producers and import the quantity __________ from foreign producers.

-Refer to Exhibit 34-12.P_W is the price that exists in a free world market.A quota is imposed and imports are Q₄ - Q₃.Importers gain revenues equal to the area __________.

Tariffs and quotas are often imposed when a government is more responsive to interests,and the benefits of those trade restrictions are often .