Question 1

The amount by which the value of imports exceeds the value of exports in a given time period is a:

Accepted Answer

A)  Trade surplus. 
B)  Trade deficit. 
C)  Consumption possibility. 
D)  Trade embargo. 
A)  Trade surplus. 
B)  Trade deficit. 
C)  Consumption possibility. 
D)  Trade embargo.

Question 2

Comparative advantage refers to the:

Accepted Answer

A)  Total amount of resources needed to produce a good. 
B)  Gains from trade that some countries are able to experience. 
C)  Comparison of production processes in two different countries. 
D)  Relative opportunity costs of producing a particular good. 
A)  Total amount of resources needed to produce a good. 
B)  Gains from trade that some countries are able to experience. 
C)  Comparison of production processes in two different countries. 
D)  Relative opportunity costs of producing a particular good.

Question 3

Which of the following is true concerning trade?

Accepted Answer

A)  It reduces consumption possibilities. 
B)  All groups benefit from free trade. 
C)  It shifts the production possibilities curve to the right. 
D)  It redistributes income away from import-competing industries. 
A)  It reduces consumption possibilities. 
B)  All groups benefit from free trade. 
C)  It shifts the production possibilities curve to the right. 
D)  It redistributes income away from import-competing industries.

Question 4

A tariff on imported goods will cause:

Accepted Answer

A)  An increase in imports and an increase in domestic sales. 
B)  A decrease in imports and an increase in domestic sales. 
C)  An increase in imports and a decrease in domestic sales. 
D)  A decrease in imports and a decrease in domestic sales. 
A)  An increase in imports and an increase in domestic sales. 
B)  A decrease in imports and an increase in domestic sales. 
C)  An increase in imports and a decrease in domestic sales. 
D)  A decrease in imports and a decrease in domestic sales.

Question 5

Which of the following groups does not have an interest in restricting free trade?

Accepted Answer

A)  People who buy the imported product. 
B)  Producers in import-competing markets. 
C)  Communities where workers in import-competing markets live. 
D)  Workers in import-competing markets. 
A)  People who buy the imported product. 
B)  Producers in import-competing markets. 
C)  Communities where workers in import-competing markets live. 
D)  Workers in import-competing markets.

Question 6

When Country A can produce a good using fewer absolute inputs than any other country,then Country A:

Accepted Answer

A)  Has an absolute advantage in producing the good. 
B)  Has a comparative advantage in producing the good. 
C)  Should specialize in producing the good. 
D)  Should import the good. 
A)  Has an absolute advantage in producing the good. 
B)  Has a comparative advantage in producing the good. 
C)  Should specialize in producing the good. 
D)  Should import the good.

Question 7

Exports:

Accepted Answer

A)  Are goods and services sold to foreign buyers. 
B)  Account for 35 percent of U.S.GDP. 
C)  Are greater than imports for the United States. 
D)  Decrease the size of GDP. 
A)  Are goods and services sold to foreign buyers. 
B)  Account for 35 percent of U.S.GDP. 
C)  Are greater than imports for the United States. 
D)  Decrease the size of GDP.

Question 8

Suppose Nigeria has a comparative advantage in oil production and the U.S.has a comparative advantage in soybean production.If these two countries specialize and trade,which of the following is true?

Accepted Answer

A)  Nigerian oil producers are worse off. 
B)  Nigerian soybean producers are worse off. 
C)  U.S.soybean producers are worse off. 
D)  U.S. oil producers are better off. 
A)  Nigerian oil producers are worse off. 
B)  Nigerian soybean producers are worse off. 
C)  U.S.soybean producers are worse off. 
D)  U.S. oil producers are better off.

Question 9

Even if the terms of trade are inferior to domestic opportunity costs,a country will benefit from trade.

Accepted Answer

A) True 
 B)False

Question 10

Goods and services purchased from foreign sources are known as:

Accepted Answer

A)  Exports. 
B)  Imports. 
C)  Net exports. 
D)  The trade deficit. 
A)  Exports. 
B)  Imports. 
C)  Net exports. 
D)  The trade deficit.

Question 11

Which of the following does the United States export?

Accepted Answer

A)  Computers,but not wheat. 
B)  Wheat and corn,but not automobiles. 
C)  Computers,corn,wheat,lumber,and automobiles. 
D)  Automobiles,but not lumber. 
A)  Computers,but not wheat. 
B)  Wheat and corn,but not automobiles. 
C)  Computers,corn,wheat,lumber,and automobiles. 
D)  Automobiles,but not lumber.

Question 12

Goods and services purchased by Americans from foreign sources:

Accepted Answer

A)  Are classified as imports. 
B)  Decrease the trade deficit,ceteris paribus. 
C)  Increase the size of GDP. 
D)  Represent 35 percent of GDP. 
A)  Are classified as imports. 
B)  Decrease the trade deficit,ceteris paribus. 
C)  Increase the size of GDP. 
D)  Represent 35 percent of GDP.

Question 13

Suppose the United States and Japan each produce only two goods and have the production possibilities shown in Figure 17.1.Without trade,Japan produces at point A and the United States produces at point B.Use the figure to answer the question(s)below.  
-Suppose both countries illustrated in Figure 17.1 specialize completely in the good they produce with the lowest opportunity cost.What is the total production of motorcycles?

Accepted Answer

A)  2,000. 
B)  3,000. 
C)  3,500. 
D)  4,000. 
A)  2,000. 
B)  3,000. 
C)  3,500. 
D)  4,000.

Question 14

If a country can produce cars with a lower opportunity cost than its trading partners,then it must have a:

Accepted Answer

A)  Low market price for cars. 
B)  Comparative advantage in cars. 
C)  A trade deficit. 
D)  A trade surplus. 
A)  Low market price for cars. 
B)  Comparative advantage in cars. 
C)  A trade deficit. 
D)  A trade surplus.

Question 15

If one currency decreases in value relative to another currency,this is known as:

Accepted Answer

A)  Currency depreciation. 
B)  Absolute advantage. 
C)  Protectionism. 
D)  Supply restriction. 
A)  Currency depreciation. 
B)  Absolute advantage. 
C)  Protectionism. 
D)  Supply restriction.

Question 16

Which of the following does the United States import?

Accepted Answer

A)  Video-game machines,cell phones,and steel. 
B)  Cell phones,but not steel. 
C)  Steel,but not video-game machines. 
D)  Video-game machines,but not cell phones. 
A)  Video-game machines,cell phones,and steel. 
B)  Cell phones,but not steel. 
C)  Steel,but not video-game machines. 
D)  Video-game machines,but not cell phones.

Question 17

Suppose the United States and Japan each produce only two goods and have the production possibilities shown in Figure 17.1.Without trade,Japan produces at point A and the United States produces at point B.Use the figure to answer the question(s)below.  
-In Figure 17.1 what is the opportunity cost of a motorcycle in Japan?

Accepted Answer

A)  1/2 of a DVD player per motorcycle. 
B)  1 DVD player per motorcycle. 
C)  2 DVD players per motorcycle. 
D)  3 DVD players per motorcycle. 
A)  1/2 of a DVD player per motorcycle. 
B)  1 DVD player per motorcycle. 
C)  2 DVD players per motorcycle. 
D)  3 DVD players per motorcycle.

Question 18

The model represents the market for sugar in a small nation.Assume SS1U1B11S1U1B0 represents the U.S.domestic supply of sugar and SS1U1B12S1U1B0 represents the supply in the U.S.under conditions of free trade  
-Refer to Figure 17.2.What does S3 most likely represent?

Accepted Answer

A)  U.S.supply under tariff-restricted trade. 
B)  U.S.supply under quota-restricted trade. 
C)  The result of a foreign country dumping this good on the U.S.market. 
D)  Production possibilities under conditions of free trade. 
A)  U.S.supply under tariff-restricted trade. 
B)  U.S.supply under quota-restricted trade. 
C)  The result of a foreign country dumping this good on the U.S.market. 
D)  Production possibilities under conditions of free trade.

Question 19

Suppose Brazil has a comparative advantage in coffee production and Mexico has a comparative advantage in tomato production.If these two countries specialize and trade,which of the following is true?

Accepted Answer

A)  Brazilian tomato producers are worse off. 
B)  Brazilian coffee producers are worse off. 
C)  Mexican tomato producers are worse off. 
D)  Mexican coffee producers are better off. 
A)  Brazilian tomato producers are worse off. 
B)  Brazilian coffee producers are worse off. 
C)  Mexican tomato producers are worse off. 
D)  Mexican coffee producers are better off.

Question 20

Exports account for approximately ___ percent of U.S.GDP.

Accepted Answer

A)  5 
B)  9 
C)  11 
D)  25 
A)  5 
B)  9 
C)  11 
D)  25

The amount by which the value of imports exceeds the value of exports in a given time period is a:

Comparative advantage refers to the:

Which of the following is true concerning trade?

A tariff on imported goods will cause:

Which of the following groups does not have an interest in restricting free trade?

When Country A can produce a good using fewer absolute inputs than any other country,then Country A:

Exports:

Suppose Nigeria has a comparative advantage in oil production and the U.S.has a comparative advantage in soybean production.If these two countries specialize and trade,which of the following is true?

Even if the terms of trade are inferior to domestic opportunity costs,a country will benefit from trade.

Goods and services purchased from foreign sources are known as:

Which of the following does the United States export?

Goods and services purchased by Americans from foreign sources:

If a country can produce cars with a lower opportunity cost than its trading partners,then it must have a:

If one currency decreases in value relative to another currency,this is known as:

Which of the following does the United States import?

The model represents the market for sugar in a small nation.Assume S₁ represents the U.S.domestic supply of sugar and S₂ represents the supply in the U.S.under conditions of free trade -Refer to Figure 17.2.What does S₃ most likely represent?

Suppose Brazil has a comparative advantage in coffee production and Mexico has a comparative advantage in tomato production.If these two countries specialize and trade,which of the following is true?

Exports account for approximately ___ percent of U.S.GDP.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

Filters

Exam 17: International Trade

The amount by which the value of imports exceeds the value of exports in a given time period is a:

Comparative advantage refers to the:

Which of the following is true concerning trade?

A tariff on imported goods will cause:

Which of the following groups does not have an interest in restricting free trade?

When Country A can produce a good using fewer absolute inputs than any other country,then Country A:

Exports:

Suppose Nigeria has a comparative advantage in oil production and the U.S.has a comparative advantage in soybean production.If these two countries specialize and trade,which of the following is true?

Even if the terms of trade are inferior to domestic opportunity costs,a country will benefit from trade.

Goods and services purchased from foreign sources are known as:

Which of the following does the United States export?

Goods and services purchased by Americans from foreign sources:

If a country can produce cars with a lower opportunity cost than its trading partners,then it must have a:

If one currency decreases in value relative to another currency,this is known as:

Which of the following does the United States import?

The model represents the market for sugar in a small nation.Assume S1 represents the U.S.domestic supply of sugar and S2 represents the supply in the U.S.under conditions of free trade -Refer to Figure 17.2.What does S3 most likely represent?

Suppose Brazil has a comparative advantage in coffee production and Mexico has a comparative advantage in tomato production.If these two countries specialize and trade,which of the following is true?

Exports account for approximately ___ percent of U.S.GDP.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

Filters

The model represents the market for sugar in a small nation.Assume S₁ represents the U.S.domestic supply of sugar and S₂ represents the supply in the U.S.under conditions of free trade -Refer to Figure 17.2.What does S₃ most likely represent?