Question 1

Countries that engage in trade will tend to specialise in the production of goods and services in which they have ________ and will ________ these goods and services.

Accepted Answer

A)  a comparative advantage; import 
B)  an absolute advantage; export 
C)  a comparative advantage; export 
D)  an absolute advantage; import 
A)  a comparative advantage; import 
B)  an absolute advantage; export 
C)  a comparative advantage; export 
D)  an absolute advantage; import

Question 2

-Refer to Table 13-3. Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Bryce has an absolute advantage in making candles and Tina has an absolute advantage in making soap. 
B)  Bryce has an absolute advantage in making soap and Tina has an absolute advantage in making candles. 
C)  Bryce has an absolute advantage in making soap. 
D)  Tina has an absolute advantage in making candles. 
A)  Bryce has an absolute advantage in making candles and Tina has an absolute advantage in making soap. 
B)  Bryce has an absolute advantage in making soap and Tina has an absolute advantage in making candles. 
C)  Bryce has an absolute advantage in making soap. 
D)  Tina has an absolute advantage in making candles.

Question 3

-Refer to Table 13-3. Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Tina has a comparative advantage in making soap. 
B)  Bryce has a comparative advantage in making soap. 
C)  Tina has a comparative advantage in making candles and making soap. 
D)  Neither Bryce nor Tina has a comparative advantage in making soap. 
A)  Tina has a comparative advantage in making soap. 
B)  Bryce has a comparative advantage in making soap. 
C)  Tina has a comparative advantage in making candles and making soap. 
D)  Neither Bryce nor Tina has a comparative advantage in making soap.

Question 4

Tastes for products such as beer differ. As a result

Accepted Answer

A)  we see countries specialising completely in the production of beer. 
B)  consumers of beer have difficulty deciding what type of imported beer to buy. 
C)  the quality of imported beer is less than it could be. 
D)  different countries may each have a comparative advantage in producing different types of beer. 
A)  we see countries specialising completely in the production of beer. 
B)  consumers of beer have difficulty deciding what type of imported beer to buy. 
C)  the quality of imported beer is less than it could be. 
D)  different countries may each have a comparative advantage in producing different types of beer.

Question 5

Economists believe the most persuasive argument for protectionism is to protect infant industries. But the argument has a drawback. What is this drawback?

Accepted Answer

A)  Governments always make the level of protection for infant industries too high. 
B)  Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. 
C)  Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue). 
D)  Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never 'growing up.' 
A)  Governments always make the level of protection for infant industries too high. 
B)  Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. 
C)  Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue). 
D)  Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never 'growing up.'

Question 6

Which of the following is the best example of a quota?

Accepted Answer

A)  a limit imposed on the number of sport utility vehicles that Australia can import from Japan 
B)  a subsidy granted by the government to domestic garment manufacturers so they can compete more effectively with foreign garment manufacturers 
C)  a tax placed on all sport utility vehicles sold in the domestic market 
D)  a $5000 per-car fee imposed on all sport utility vehicles imported into Australia 
A)  a limit imposed on the number of sport utility vehicles that Australia can import from Japan 
B)  a subsidy granted by the government to domestic garment manufacturers so they can compete more effectively with foreign garment manufacturers 
C)  a tax placed on all sport utility vehicles sold in the domestic market 
D)  a $5000 per-car fee imposed on all sport utility vehicles imported into Australia

Question 7

Anti-globalisation and protectionism are both arguments against free trade. How do these two arguments differ?

Accepted Answer

The anti-globalisation argument against

Question 8

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Accepted Answer

A) True 
 B)False

Question 9

Why do domestic firms offshore production processes?

Accepted Answer

To reduce

Question 10

A tariff is a tax imposed by a government on

Accepted Answer

A)  exports. 
B)  services. 
C)  imports. 
D)  luxury items. 
A)  exports. 
B)  services. 
C)  imports. 
D)  luxury items.

Question 11

Imposing tariffs in cases of dumping

Accepted Answer

A)  is allowed under the WTO agreement. 
B)  is not allowed under the WTO agreement. 
C)  is not addressed by the WTO agreement. 
D)  has never occurred, even though it is allowed under the WTO agreement. 
A)  is allowed under the WTO agreement. 
B)  is not allowed under the WTO agreement. 
C)  is not addressed by the WTO agreement. 
D)  has never occurred, even though it is allowed under the WTO agreement.

Question 12

The ratio at which a country can trade its exports for imports from other countries is called

Accepted Answer

A)  a trade barrier. 
B)  the terms of trade. 
C)  autarky. 
D)  a free trade agreement. 
A)  a trade barrier. 
B)  the terms of trade. 
C)  autarky. 
D)  a free trade agreement.

Question 13

-Refer to Table 13-1. Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Linda has a comparative advantage in dog bathing. 
B)  Sandy has an absolute advantage in dog bathing. 
C)  Sandy has a comparative advantage in dog bathing. 
D)  Linda has a comparative advantage in dog grooming and dog bathing. 
A)  Linda has a comparative advantage in dog bathing. 
B)  Sandy has an absolute advantage in dog bathing. 
C)  Sandy has a comparative advantage in dog bathing. 
D)  Linda has a comparative advantage in dog grooming and dog bathing.

Question 14

Which of the following is the best example of a quota?

Accepted Answer

A)  a subsidy from the government to domestic manufacturers of tires to enable them to compete more effectively with foreign producers 
B)  a limit on the quantity of tires that can be imported from a foreign country 
C)  a 40% fee imposed on all imported tires 
D)  a tax placed on all tires sold in the domestic market to help offset the impact of lost jobs in the domestic tire industry 
A)  a subsidy from the government to domestic manufacturers of tires to enable them to compete more effectively with foreign producers 
B)  a limit on the quantity of tires that can be imported from a foreign country 
C)  a 40% fee imposed on all imported tires 
D)  a tax placed on all tires sold in the domestic market to help offset the impact of lost jobs in the domestic tire industry

Question 15

A tariff is a tax imposed by a government on its own exports.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is used to describe an 'open' economy?

Accepted Answer

A)  one which has few or no barriers to international trade 
B)  one that exports a small proportion of its output 
C)  one that is open to technological ideas from other countries 
D)  one that is open to immigration from other countries 
A)  one which has few or no barriers to international trade 
B)  one that exports a small proportion of its output 
C)  one that is open to technological ideas from other countries 
D)  one that is open to immigration from other countries

Question 17

Imports are goods and services bought domestically

Accepted Answer

A)  but produced in other countries. 
B)  and resold at a profit. 
C)  and produced domestically. 
D)  and not subject to tariffs. 
A)  but produced in other countries. 
B)  and resold at a profit. 
C)  and produced domestically. 
D)  and not subject to tariffs.

Question 18

Firms offshore

Accepted Answer

A)  to obtain a higher quality product regardless of the cost. 
B)  because domestic resources cannot do the job. 
C)  to escape tariffs. 
D)  because costs of production are lower if the firm uses resources in another country. 
A)  to obtain a higher quality product regardless of the cost. 
B)  because domestic resources cannot do the job. 
C)  to escape tariffs. 
D)  because costs of production are lower if the firm uses resources in another country.

Question 19

Free trade refers to trade between countries without government restrictions.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is the best example of a tariff?

Accepted Answer

A)  a subsidy from the government to domestic manufacturers of residential air conditioners to enable them to compete more effectively with foreign producers 
B)  a limit on the quantity of residential air conditioners that can be imported from a foreign country 
C)  a $150 fee imposed on all imported residential air conditioners 
D)  a tax placed on all residential air conditioners sold in the domestic market to help offset the impact of emissions on the environment 
A)  a subsidy from the government to domestic manufacturers of residential air conditioners to enable them to compete more effectively with foreign producers 
B)  a limit on the quantity of residential air conditioners that can be imported from a foreign country 
C)  a $150 fee imposed on all imported residential air conditioners 
D)  a tax placed on all residential air conditioners sold in the domestic market to help offset the impact of emissions on the environment

Countries that engage in trade will tend to specialise in the production of goods and services in which they have and will these goods and services.

-Refer to Table 13-3. Select the statement that accurately interprets the data in the table.

-Refer to Table 13-3. Select the statement that accurately interprets the data in the table.

Tastes for products such as beer differ. As a result

Economists believe the most persuasive argument for protectionism is to protect infant industries. But the argument has a drawback. What is this drawback?

Which of the following is the best example of a quota?

Anti-globalisation and protectionism are both arguments against free trade. How do these two arguments differ?

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Why do domestic firms offshore production processes?

A tariff is a tax imposed by a government on

Imposing tariffs in cases of dumping

The ratio at which a country can trade its exports for imports from other countries is called

-Refer to Table 13-1. Select the statement that accurately interprets the data in the table.

Which of the following is the best example of a quota?

A tariff is a tax imposed by a government on its own exports.

Which of the following is used to describe an 'open' economy?

Imports are goods and services bought domestically

Firms offshore

Free trade refers to trade between countries without government restrictions.

Which of the following is the best example of a tariff?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 13: International Trade

Countries that engage in trade will tend to specialise in the production of goods and services in which they have ________ and will ________ these goods and services.

-Refer to Table 13-3. Select the statement that accurately interprets the data in the table.

-Refer to Table 13-3. Select the statement that accurately interprets the data in the table.

Tastes for products such as beer differ. As a result

Economists believe the most persuasive argument for protectionism is to protect infant industries. But the argument has a drawback. What is this drawback?

Which of the following is the best example of a quota?

Anti-globalisation and protectionism are both arguments against free trade. How do these two arguments differ?

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Why do domestic firms offshore production processes?

A tariff is a tax imposed by a government on

Imposing tariffs in cases of dumping

The ratio at which a country can trade its exports for imports from other countries is called

-Refer to Table 13-1. Select the statement that accurately interprets the data in the table.

Which of the following is the best example of a quota?

A tariff is a tax imposed by a government on its own exports.

Which of the following is used to describe an 'open' economy?

Imports are goods and services bought domestically

Firms offshore

Free trade refers to trade between countries without government restrictions.

Which of the following is the best example of a tariff?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Countries that engage in trade will tend to specialise in the production of goods and services in which they have and will these goods and services.