Question 1

Explain why Canada imports banana.

Accepted Answer

Canada is not endowed with an environmen

Question 2

-Refer to table 10.13 to answer this question.What is the cost of producing one sword in Rings?

Accepted Answer

A) 4 broomsticks. 
B) 0.25 broomsticks. 
C) 0.67 broomsticks. 
D) 1.5 broomsticks. 
A) 4 broomsticks. 
B) 0.25 broomsticks. 
C) 0.67 broomsticks. 
D) 1.5 broomsticks.

Question 3

Below is the total market demand and supply of wine for France and Germany.Quantities are in millions of litres per month.
  
-Refer to the information above to answer this question.Assume that France and Germany enter into a free trade agreement (and there are no extra transportation costs,etc. )what are the equilibrium price and quantity of wine?

Accepted Answer

A) $5 and 30. 
B) $6 and 19. 
C) $7 and 21. 
D) $8 and 19. 
A) $5 and 30. 
B) $6 and 19. 
C) $7 and 21. 
D) $8 and 19.

Question 4

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada.
  
-Proponents of free trade suggest that all of the following,except one,are benefits of free trade.Which is the exception?

Accepted Answer

A) Free trade leads to lower prices. 
B) Free trade leads to greater self-sufficiency. 
C) Free trade leads to higher incomes. 
D) Free trade leads to a greater variety of products. 
E) Free trade increases competition. 
A) Free trade leads to lower prices. 
B) Free trade leads to greater self-sufficiency. 
C) Free trade leads to higher incomes. 
D) Free trade leads to a greater variety of products. 
E) Free trade increases competition.

Question 5

Suppose the following domestic demand and supply schedule for Canada's computer industry:
   a)In the absence of free trade,what is the equilibrium price and quantity traded for Canada's computers?
Suppose the international price for a computer is $1200.
b)Will Canadian consumers benefit? Explain.
c)Will Canadian producers benefit? Explain

Accepted Answer

a)$1400,62
b)Yes,Canadian consumers bene

Question 6

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 7

What is the term for the policy of restricting the importation of foreign products?

Accepted Answer

A) Quota. 
B) Protectionism. 
C) Trade barriers. 
D) Terms of trade. 
A) Quota. 
B) Protectionism. 
C) Trade barriers. 
D) Terms of trade.

Question 8

-Refer to above figure to answer this question.What is the opportunity cost of producing 1 apple in Harmony and in Tranquility?

Accepted Answer

A) 2 pears in Harmony and 3 pears in Tranquility. 
B) 1/2 pear in Harmony and 1/3 pear in Tranquility. 
C) 2 pears in Harmony and 1/3 pear in Tranquility. 
D) 1/2 pear in Harmony and 3 pears in Tranquility. 
E) 3 pears in Harmony and 2 pears in Tranquility. 
A) 2 pears in Harmony and 3 pears in Tranquility. 
B) 1/2 pear in Harmony and 1/3 pear in Tranquility. 
C) 2 pears in Harmony and 1/3 pear in Tranquility. 
D) 1/2 pear in Harmony and 3 pears in Tranquility. 
E) 3 pears in Harmony and 2 pears in Tranquility.

Question 9

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada.
  
-All of the following,except one,are benefits of free trade.Which is the exception?

Accepted Answer

A) Products will be produced at lower cost and in higher volumes. 
B) There will be an increase in the variety of products available. 
C) There will be increased competition. 
D) The world exchange rates will approach parity. 
A) Products will be produced at lower cost and in higher volumes. 
B) There will be an increase in the variety of products available. 
C) There will be increased competition. 
D) The world exchange rates will approach parity.

Question 10

What does protectionism mean?

Accepted Answer

A) Policies designed to limit the amount of exports leaving a country. 
B) A form of insurance on exported goods in case of loss during transportation. 
C) Subsidies give in order to keep the prices of imported goods low. 
D) Policies designed to limit the amount of imports entering a country. 
A) Policies designed to limit the amount of exports leaving a country. 
B) A form of insurance on exported goods in case of loss during transportation. 
C) Subsidies give in order to keep the prices of imported goods low. 
D) Policies designed to limit the amount of imports entering a country.

Question 11

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 12

If the prices of a country's exports decrease and the prices of its imports increase,then the terms of trade will move in its favour.

Accepted Answer

A) True 
 B)False

Question 13

To what extent are the conclusions of the theory of comparative advantage affected if unit costs increase rather than remain the same as output increases?

Accepted Answer

It means that the cost advantage that a

Question 14

Below is the productivity per worker (kilos per day)in the rice and beer industries of Catalonia and Granada.The working population in each country is 12 million people.
  
-Refer to the data above to answer this question.In which product does Catalonia have a comparative advantage?

Accepted Answer

A) Rice. 
B) Beer. 
C) Both rice and beer. 
D) Neither rice nor beer. 
A) Rice. 
B) Beer. 
C) Both rice and beer. 
D) Neither rice nor beer.

Question 15

Below is the productivity per worker (kilos per day)in the rice and beer industries of Catalonia and Granada.The working population in each country is 12 million people.
  
-What term describes the ability to produce something at a lower opportunity cost than others are able to?

Accepted Answer

A) Increased production possibilities. 
B) Factor endowments. 
C) Increasing returns to scale. 
D) Comparative advantage. 
A) Increased production possibilities. 
B) Factor endowments. 
C) Increasing returns to scale. 
D) Comparative advantage.

Question 16

What is the meaning of the term "gains from trade"?

Accepted Answer

A) The surplus of exports over imports. 
B) The increase in output resulting from international trade. 
C) The fact that everyone gains from international trade. 
D) The increase in revenue that the government receives from tariffs. 
A) The surplus of exports over imports. 
B) The increase in output resulting from international trade. 
C) The fact that everyone gains from international trade. 
D) The increase in revenue that the government receives from tariffs.

Question 17

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 18

What is the difference between a tariff and a quota?

Accepted Answer

A) A tariff causes an increase in the price,whereas a quota does not affect the price. 
B) Both a tariff and a quota will affect the price,but a tariff has no effect on the quantity,whereas a quota will lead to a reduction. 
C) Both a tariff and a quota will affect the price,but a tariff has no effect on the quantity,whereas a quota will lead to an increase. 
D) A quota affects all foreign producers equally,whereas a tariff does not. 
E) A tariff affects all foreign producers equally,whereas a quota does not. 
A) A tariff causes an increase in the price,whereas a quota does not affect the price. 
B) Both a tariff and a quota will affect the price,but a tariff has no effect on the quantity,whereas a quota will lead to a reduction. 
C) Both a tariff and a quota will affect the price,but a tariff has no effect on the quantity,whereas a quota will lead to an increase. 
D) A quota affects all foreign producers equally,whereas a tariff does not. 
E) A tariff affects all foreign producers equally,whereas a quota does not.

Question 19

Suppose that the cost of producing 1 unit of wine in Happy Island is 2 units of rice and in Joy Island,1 unit of wine costs 4 units of rice.What does this mean for the two countries?

Accepted Answer

A) Happy Island should specialize in and export rice to Joy Island. 
B) Happy Island should specialize in and export wine to Joy Island. 
C) Happy Island should specialize in rice but export wine to Joy Island. 
D) Happy Island should specialize in wine but export rice to Joy Island. 
A) Happy Island should specialize in and export rice to Joy Island. 
B) Happy Island should specialize in and export wine to Joy Island. 
C) Happy Island should specialize in rice but export wine to Joy Island. 
D) Happy Island should specialize in wine but export rice to Joy Island.

Question 20

What is the term for restrictions imposed by a government limiting the amount of foreign currencies which can be obtained?

Accepted Answer

A) Tariffs. 
B) Taxes. 
C) Quotas. 
D) Exchange controls. 
A) Tariffs. 
B) Taxes. 
C) Quotas. 
D) Exchange controls.

Explain why Canada imports banana.

-Refer to table 10.13 to answer this question.What is the cost of producing one sword in Rings?

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada. -Proponents of free trade suggest that all of the following,except one,are benefits of free trade.Which is the exception?

Distinguish between the European Union (EU)and North American Free Trade Agreement (NAFTA).

What is the term for the policy of restricting the importation of foreign products?

-Refer to above figure to answer this question.What is the opportunity cost of producing 1 apple in Harmony and in Tranquility?

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada. -All of the following,except one,are benefits of free trade.Which is the exception?

What does protectionism mean?

Which of the following statements about the impact of the introduction of free trade is correct?

If the prices of a country's exports decrease and the prices of its imports increase,then the terms of trade will move in its favour.

To what extent are the conclusions of the theory of comparative advantage affected if unit costs increase rather than remain the same as output increases?

Below is the productivity per worker (kilos per day)in the rice and beer industries of Catalonia and Granada.The working population in each country is 12 million people. -Refer to the data above to answer this question.In which product does Catalonia have a comparative advantage?

Below is the productivity per worker (kilos per day)in the rice and beer industries of Catalonia and Granada.The working population in each country is 12 million people. -What term describes the ability to produce something at a lower opportunity cost than others are able to?

What is the meaning of the term "gains from 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?

What is the difference between a tariff and a quota?

Suppose that the cost of producing 1 unit of wine in Happy Island is 2 units of rice and in Joy Island,1 unit of wine costs 4 units of rice.What does this mean for the two countries?

What is the term for restrictions imposed by a government limiting the amount of foreign currencies which can be obtained?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 10: International Trade

Explain why Canada imports banana.

-Refer to table 10.13 to answer this question.What is the cost of producing one sword in Rings?

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada. -Proponents of free trade suggest that all of the following,except one,are benefits of free trade.Which is the exception?

Distinguish between the European Union (EU)and North American Free Trade Agreement (NAFTA).

What is the term for the policy of restricting the importation of foreign products?

-Refer to above figure to answer this question.What is the opportunity cost of producing 1 apple in Harmony and in Tranquility?

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada. -All of the following,except one,are benefits of free trade.Which is the exception?

What does protectionism mean?

Which of the following statements about the impact of the introduction of free trade is correct?

If the prices of a country's exports decrease and the prices of its imports increase,then the terms of trade will move in its favour.

To what extent are the conclusions of the theory of comparative advantage affected if unit costs increase rather than remain the same as output increases?

Below is the productivity per worker (kilos per day)in the rice and beer industries of Catalonia and Granada.The working population in each country is 12 million people. -Refer to the data above to answer this question.In which product does Catalonia have a comparative advantage?

Below is the productivity per worker (kilos per day)in the rice and beer industries of Catalonia and Granada.The working population in each country is 12 million people. -What term describes the ability to produce something at a lower opportunity cost than others are able to?

What is the meaning of the term "gains from 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?

What is the difference between a tariff and a quota?

Suppose that the cost of producing 1 unit of wine in Happy Island is 2 units of rice and in Joy Island,1 unit of wine costs 4 units of rice.What does this mean for the two countries?

What is the term for restrictions imposed by a government limiting the amount of foreign currencies which can be obtained?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters