Question 1

Table 13.14 shows the output of kumquats per month.
  
-Which of the following statements about the impact of the introduction of free trade is correct?

Accepted Answer

A) It results in higher prices for domestic producers. 
B) It results in lower prices for foreign producers. 
C) It results in higher prices for foreign consumers. 
D) It results in higher prices for domestic consumers. 
A) It results in higher prices for domestic producers. 
B) It results in lower prices for foreign producers. 
C) It results in higher prices for foreign consumers. 
D) It results in higher prices for domestic consumers.

Question 2

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100.
  
-What is meant by the cultural-identity argument?

Accepted Answer

A) A country should protect its sense of individuality and culture in industries such as communications,health and education. 
B) A country should try to export its culture to as many other countries as possible. 
C) A country should protect its strategic industries from foreign competition. 
D) A country should assist newer industries which are not yet mature enough to compete with foreign industries. 
A) A country should protect its sense of individuality and culture in industries such as communications,health and education. 
B) A country should try to export its culture to as many other countries as possible. 
C) A country should protect its strategic industries from foreign competition. 
D) A country should assist newer industries which are not yet mature enough to compete with foreign industries.

Question 3

Table 13.14 shows the output of kumquats per month.
  
-The terms of trade relate to the laws and conditions that govern trade.

Accepted Answer

A) True 
 B)False

Question 4

Below is production possibilities data for the countries of Mental and Etheric.
  
-Refer to the information above to answer this question.If both countries produce combination D what will be the combined outputs?

Accepted Answer

A) 50 million units of soya milk and 130 million units of rice cakes. 
B) 60 million units of soya milk and 120 million units of rice cakes. 
C) 60 million units of soya milk and 130 million units of rice cakes. 
D) 120 million units of soya milk and 100 million units of rice cakes. 
A) 50 million units of soya milk and 130 million units of rice cakes. 
B) 60 million units of soya milk and 120 million units of rice cakes. 
C) 60 million units of soya milk and 130 million units of rice cakes. 
D) 120 million units of soya milk and 100 million units of rice cakes.

Question 5

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100.
  
-What is meant by the strategic-industry argument?

Accepted Answer

A) It is good strategy for a country to impose tariffs on the importation of luxury products. 
B) It is to a country's benefit to buy strategic products as cheaply as possible. 
C) A country should protect its strategic industries from foreign competition. 
D) A country should assist newer industries which are not yet mature enough to compete with foreign industries. 
A) It is good strategy for a country to impose tariffs on the importation of luxury products. 
B) It is to a country's benefit to buy strategic products as cheaply as possible. 
C) A country should protect its strategic industries from foreign competition. 
D) A country should assist newer industries which are not yet mature enough to compete with foreign industries.

Question 6

What is the term for an agreement by an exporting country to restrict the amount of exports to another country?

Accepted Answer

A) Tariff. 
B) Trade agreement. 
C) Voluntary export restrictions. 
D) Quota. 
A) Tariff. 
B) Trade agreement. 
C) Voluntary export restrictions. 
D) Quota.

Question 7

Table 13.14 shows the output of kumquats per month.
  
-Suppose that the productivity per worker in the milk and cranberry juice industries of Southland and Northland are as follows:
   a)Which country has the absolute advantage in producing milk?
b)Which country has the absolute advantage in producing cranberry juice?
c)Which country has the comparative advantage in producing milk?
d)Which country has the comparative advantage in producing cranberry juice?
e)According to the theory of comparative advantage,will there be trade? If yes,what is the direction of trade?

Accepted Answer

a)Northland has the absolute advantage i

Question 8

-Refer to above table to answer this question.Supposing that there are 200 workers each in Rings and Potter.If,originally,half the workers were employed in each industry,what would be the gains from trade if the countries completely specialized in the products in which they have a comparative advantage?

Accepted Answer

A) +200 broomsticks;-100 swords. 
B) +200 broomsticks;+100 swords. 
C) +500 broomsticks;+100 swords. 
D) +700 broomsticks;+700 swords. 
A) +200 broomsticks;-100 swords. 
B) +200 broomsticks;+100 swords. 
C) +500 broomsticks;+100 swords. 
D) +700 broomsticks;+700 swords.

Question 9

Below is the productivity per worker (kilos per day)in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people.
  
-What is comparative advantage?

Accepted Answer

A) The advantage gained from producing something at a lower opportunity cost than other producers are able to. 
B) An advantage in production as a result of possessing better skills,or equipment or resources in comparison to other individuals or countries. 
C) An econoMac policy of protecting domestic producers by restricting the importation of foreign products. 
D) A government regulation which controls how much of a single product can be sold or produced in a competitive market. 
A) The advantage gained from producing something at a lower opportunity cost than other producers are able to. 
B) An advantage in production as a result of possessing better skills,or equipment or resources in comparison to other individuals or countries. 
C) An econoMac policy of protecting domestic producers by restricting the importation of foreign products. 
D) A government regulation which controls how much of a single product can be sold or produced in a competitive market.

Question 10

Table 13.14 shows the output of kumquats per month.
  
-Which of the following statements about the impact of the introduction of free trade is correct?

Accepted Answer

A) It results in higher prices for domestic producers. 
B) It results in higher prices for foreign producers. 
C) It results in lower prices for foreign consumers. 
D) It results in higher prices for domestic consumers. 
A) It results in higher prices for domestic producers. 
B) It results in higher prices for foreign producers. 
C) It results in lower prices for foreign consumers. 
D) It results in higher prices for domestic consumers.

Question 11

Which of the following would cause the terms of trade to move in favour of Canada?

Accepted Answer

A) If the prices of resources increased significantly. 
B) If the volume of Canada's exports increased significantly. 
C) If more Canadians travelled abroad. 
D) If the price of imports increased. 
E) If the volume of imports decreased. 
A) If the prices of resources increased significantly. 
B) If the volume of Canada's exports increased significantly. 
C) If more Canadians travelled abroad. 
D) If the price of imports increased. 
E) If the volume of imports decreased.

Question 12

Table 13.14 shows the output of kumquats per month.
  
-All of the following,except one,are arguments against free trade.Which is the exception?

Accepted Answer

A) Strategic industry argument. 
B) Infant industry argument. 
C) Cultural identity argument. 
D) Product liability argument. 
E) Lower environmental and labour standards. 
A) Strategic industry argument. 
B) Infant industry argument. 
C) Cultural identity argument. 
D) Product liability argument. 
E) Lower environmental and labour standards.

Question 13

Table 13.14 shows the output of kumquats per month.
  
-Suppose the following domestic demand and supply schedule for Thailand's wine industry:
   a)In the absence of free trade,what is the equilibrium price and quantity traded domestically for Thailand's wine industry?
b)Suppose the international price for a bottle of wine is $27.Will Thailand export or import wine? How many units?
c)Now suppose the Thai government places a $2 tariff on imported wine.How many units will Thailand import?

Accepted Answer

a)$26 and 360,000 bo

Question 14

Suppose that the maximum output in the corn and barley industries of China and Russia are as follows:
   What is the range of feasible terms of trade between the two countries?

Accepted Answer

1 unit of corn:0.2 t

Question 15

Below is production possibilities data for the countries of Mental and Etheric.
  
-Refer to the information above to answer this question.Suppose that the two countries specialize and engage in free trade and establish the terms of trade at 1 unit of rice cake = 1.5 units of soya milk.If Etheric exports 30 million units of rice cakes to Mental,what will be the consumption combinations for Etheric?

Accepted Answer

A) 30 million units of soya milk and 55 million units of rice cakes. 
B) 45 million units of soya milk and 90 million units of rice cakes. 
C) 55 million units of soya milk and 30 million units of rice cakes. 
D) 90 million units of soya milk and 45 million units of rice cakes. 
E) 10 million units of soya milk and 30 million units of rice cakes. 
A) 30 million units of soya milk and 55 million units of rice cakes. 
B) 45 million units of soya milk and 90 million units of rice cakes. 
C) 55 million units of soya milk and 30 million units of rice cakes. 
D) 90 million units of soya milk and 45 million units of rice cakes. 
E) 10 million units of soya milk and 30 million units of rice cakes.

Question 16

Table 13.14 shows the output of kumquats per month.
  
-How are trade and specialization related?

Accepted Answer

The two are totally interdependent.If a

Question 17

Table 13.14 shows the output of kumquats per month.
  
-Distinguish between the European Union (EU)and North American Free Trade Agreement (NAFTA).

Accepted Answer

The EU is a common market and NAFTA is a

Question 18

Below is some hypothetical data for the countries of Canada and Mexico.(Assume that Canada has 10 million workers per month available and Mexico has 20 million. )
Canada's Production Possibilities
(Output in millions of bushels per month)
   Mexico's Production Possibilities
(Output in millions of bushels per month)
   Output Before Trade
(Output in millions of bushels per month)
  
-Refer to the information above to answer this question.What is the opportunity cost of 1 bushel of rye in Mexico?

Accepted Answer

A) 0.5 bushels of beans. 
B) 1 bushel of beans. 
C) 2 bushels of beans. 
D) 15 bushels of beans. 
E) 20 bushels of beans. 
A) 0.5 bushels of beans. 
B) 1 bushel of beans. 
C) 2 bushels of beans. 
D) 15 bushels of beans. 
E) 20 bushels of beans.

Question 19

Table 13.14 shows the output of kumquats per month.
  
-Explain why Canada imports banana.

Accepted Answer

Canada is not endowed with an environmen

Question 20

Table 13.14 shows the output of kumquats per month.
  
-Explain why consumers lose and producers win if a tariff is imposed.

Accepted Answer

Consumers lose because a tarif

Table 13.14 shows the output of kumquats per month. -Which of the following statements about the impact of the introduction of free trade is correct?

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100. -What is meant by the cultural-identity argument?

Table 13.14 shows the output of kumquats per month. -The terms of trade relate to the laws and conditions that govern trade.

Below is production possibilities data for the countries of Mental and Etheric. -Refer to the information above to answer this question.If both countries produce combination D what will be the combined outputs?

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100. -What is meant by the strategic-industry argument?

What is the term for an agreement by an exporting country to restrict the amount of exports to another country?

Below is the productivity per worker (kilos per day)in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people. -What is comparative advantage?

Table 13.14 shows the output of kumquats per month. -Which of the following statements about the impact of the introduction of free trade is correct?

Which of the following would cause the terms of trade to move in favour of Canada?

Table 13.14 shows the output of kumquats per month. -All of the following,except one,are arguments against free trade.Which is the exception?

Suppose that the maximum output in the corn and barley industries of China and Russia are as follows: What is the range of feasible terms of trade between the two countries?

Table 13.14 shows the output of kumquats per month. -How are trade and specialization related?

Table 13.14 shows the output of kumquats per month. -Distinguish between the European Union (EU)and North American Free Trade Agreement (NAFTA).

Table 13.14 shows the output of kumquats per month. -Explain why Canada imports banana.

Table 13.14 shows the output of kumquats per month. -Explain why consumers lose and producers win if a tariff is imposed.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

Filters

Exam 13: International Trade

Table 13.14 shows the output of kumquats per month. -Which of the following statements about the impact of the introduction of free trade is correct?

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100. -What is meant by the cultural-identity argument?

Table 13.14 shows the output of kumquats per month. -The terms of trade relate to the laws and conditions that govern trade.

Below is production possibilities data for the countries of Mental and Etheric. -Refer to the information above to answer this question.If both countries produce combination D what will be the combined outputs?

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100. -What is meant by the strategic-industry argument?

What is the term for an agreement by an exporting country to restrict the amount of exports to another country?

Below is the productivity per worker (kilos per day)in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people. -What is comparative advantage?

Table 13.14 shows the output of kumquats per month. -Which of the following statements about the impact of the introduction of free trade is correct?

Which of the following would cause the terms of trade to move in favour of Canada?

Table 13.14 shows the output of kumquats per month. -All of the following,except one,are arguments against free trade.Which is the exception?

Suppose that the maximum output in the corn and barley industries of China and Russia are as follows: What is the range of feasible terms of trade between the two countries?

Table 13.14 shows the output of kumquats per month. -How are trade and specialization related?

Table 13.14 shows the output of kumquats per month. -Distinguish between the European Union (EU)and North American Free Trade Agreement (NAFTA).

Table 13.14 shows the output of kumquats per month. -Explain why Canada imports banana.

Table 13.14 shows the output of kumquats per month. -Explain why consumers lose and producers win if a tariff is imposed.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

Filters