Question 1

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 2

Below is production possibilities data for the countries of Mental and Etheric.
  
-What could cause the terms of trade to move in a country's favour?

Accepted Answer

A) If the average price of its exports increases. 
B) If the average price of its imports increases. 
C) If the average price of its exports decreases. 
D) If the costs of transport and insurance falls. 
A) If the average price of its exports increases. 
B) If the average price of its imports increases. 
C) If the average price of its exports decreases. 
D) If the costs of transport and insurance falls.

Question 3

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

Accepted Answer

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

Question 4

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.Assuming no trade,what are the equilibrium price and quantity of wine in France?

Accepted Answer

A) $4 and 24. 
B) $5 and 14. 
C) $6 and 15. 
D) $7 and 14. 
A) $4 and 24. 
B) $5 and 14. 
C) $6 and 15. 
D) $7 and 14.

Question 5

What are Canada's main exports?

Accepted Answer

Canada's major expor

Question 6

Suppose that the productivity per worker in the Good X and Good Y industries of Country A and Country B are as follows:
   In order for there to be no gains from trade,what would the Country B productivity per worker in the Good X industry need to be?

Accepted Answer

The answer of Suppose that the productivity per worker in...

Question 7

In 2012,approximately what percentage of Canada's merchandize exports were petroleum and other fuels?

Accepted Answer

A) 5% 
B) 12% 
C) 26% 
D) 30% 
E) 35% 
A) 5% 
B) 12% 
C) 26% 
D) 30% 
E) 35%

Question 8

Explain the theory of comparative advantage.How does it differ from the theory of absolute advantage?

Accepted Answer

The theory of comparative advantage stat

Question 9

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.In what product does Canada and Mexico have a comparative advantage?

Accepted Answer

A) Neither country has a comparative advantage in either rye or beans. 
B) Canada has a comparative advantage in rye but neither country has a comparative advantage in beans. 
C) Canada has a comparative advantage in rye and Mexico has a comparative advantage in beans. 
D) Canada has a comparative advantage in beans and Mexico has a comparative advantage in rye. 
A) Neither country has a comparative advantage in either rye or beans. 
B) Canada has a comparative advantage in rye but neither country has a comparative advantage in beans. 
C) Canada has a comparative advantage in rye and Mexico has a comparative advantage in beans. 
D) Canada has a comparative advantage in beans and Mexico has a comparative advantage in rye.

Question 10

-Refer to above figure to answer this question.Suppose that both Harmony and Tranquility are producing 20 pears;what will be the total gains from trade for the two countries?

Accepted Answer

A) 20 apples and 0 pears. 
B) 30 apples and 10 pears. 
C) 20 apples and 10 pears. 
D) 20 apples and 30 pears. 
E) 0 apples and 20 pears. 
A) 20 apples and 0 pears. 
B) 30 apples and 10 pears. 
C) 20 apples and 10 pears. 
D) 20 apples and 30 pears. 
E) 0 apples and 20 pears.

Question 11

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.
  
-Refer to the data above to answer this question.If each country totally specializes in the product in which it has a comparative advantage,what is the total combined output that they are capable of producing?

Accepted Answer

A) 80 wheat and 96 beans. 
B) 160 wheat and 192 beans. 
C) 48 wheat and 32 beans. 
D) 128 wheat and 128 beans. 
A) 80 wheat and 96 beans. 
B) 160 wheat and 192 beans. 
C) 48 wheat and 32 beans. 
D) 128 wheat and 128 beans.

Question 12

Does the principle of comparative advantage tell us how the gains from trade will be distributed? Explain.

Accepted Answer

No,the principle of comparative advantag

Question 13

In the mind of Adam Smith,what is true if person A voluntarily sells a good or service and person B voluntarily buys it?

Accepted Answer

A) A will benefit but B may or may not benefit. 
B) B will benefit but A may or may not benefit. 
C) Both A and B would benefit. 
D) It is possible that both will benefit or that neither will benefit. 
A) A will benefit but B may or may not benefit. 
B) B will benefit but A may or may not benefit. 
C) Both A and B would benefit. 
D) It is possible that both will benefit or that neither will benefit.

Question 14

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada.
  
-Refer to the graph above to answer this question.Assuming no trade,what is the opportunity cost of 1 more railcar?

Accepted Answer

A) 0.0167 aircraft. 
B) 1.67 aircraft. 
C) 16.67 aircraft. 
D) 20 aircraft. 
E) 100 aircraft. 
A) 0.0167 aircraft. 
B) 1.67 aircraft. 
C) 16.67 aircraft. 
D) 20 aircraft. 
E) 100 aircraft.

Question 15

List five ways to restrict imports.

Accepted Answer

The five major ways of restricting impor

Question 16

Who was the originator of the Theory of Absolute Advantage?

Accepted Answer

A) Adam Smith. 
B) David Ricardo. 
C) John Maynard Keynes. 
D) Arthur Laffer. 
A) Adam Smith. 
B) David Ricardo. 
C) John Maynard Keynes. 
D) Arthur Laffer.

Question 17

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.Suppose that initially each country allocated 5 million of its population to the rice industry,the rest being employed in the beer industry.If they now decide to totally specialize in the products in which each has a comparative advantage,what will be the resulting gains from trade?

Accepted Answer

A) 0 rice and 25 beer. 
B) 1 rice and 1 beer. 
C) 35 rice and 35 beer. 
D) 21 rice and 0 beer. 
A) 0 rice and 25 beer. 
B) 1 rice and 1 beer. 
C) 35 rice and 35 beer. 
D) 21 rice and 0 beer.

Question 18

The chart below refers to the economy of Smith Island.
  
-Refer to the graph above to answer this question.How much is Smith Island producing at the world (free trade)price of cloth?

Accepted Answer

A) 0 units. 
B) 20 units. 
C) 40 units. 
D) 80 units. 
A) 0 units. 
B) 20 units. 
C) 40 units. 
D) 80 units.

Question 19

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 20

Suppose the following domestic demand and supply schedule for Canada's HDTV industry:
   a)In the absence of free trade,what is the equilibrium price and quantity traded domestically for Canada's HDTV industry?
b)Suppose the international price for a laptop is $2,300.Will Canada export or import HDTVs? How many units?
c)Now suppose the Canadian government limits the number of imported HDTVs to 2,000 units.How many units will Canada import and what will be the equilibrium price?

Accepted Answer

a)$2600 and 17,000 units.
b)Ca

What is meant by the strategic-industry argument?

Below is production possibilities data for the countries of Mental and Etheric. -What could cause the terms of trade to move in a country's favour?

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

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.Assuming no trade,what are the equilibrium price and quantity of wine in France?

What are Canada's main exports?

Suppose that the productivity per worker in the Good X and Good Y industries of Country A and Country B are as follows: In order for there to be no gains from trade,what would the Country B productivity per worker in the Good X industry need to be?

In 2012,approximately what percentage of Canada's merchandize exports were petroleum and other fuels?

Explain the theory of comparative advantage.How does it differ from the theory of absolute advantage?

-Refer to above figure to answer this question.Suppose that both Harmony and Tranquility are producing 20 pears;what will be the total gains from trade for the two countries?

Does the principle of comparative advantage tell us how the gains from trade will be distributed? Explain.

In the mind of Adam Smith,what is true if person A voluntarily sells a good or service and person B voluntarily buys it?

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada. -Refer to the graph above to answer this question.Assuming no trade,what is the opportunity cost of 1 more railcar?

List five ways to restrict imports.

Who was the originator of the Theory of Absolute Advantage?

The chart below refers to the economy of Smith Island. -Refer to the graph above to answer this question.How much is Smith Island producing at the world (free trade)price of cloth?

All of the following,except one,are arguments against free trade.Which is the exception?

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

What is meant by the strategic-industry argument?

Below is production possibilities data for the countries of Mental and Etheric. -What could cause the terms of trade to move in a country's favour?

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

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.Assuming no trade,what are the equilibrium price and quantity of wine in France?

What are Canada's main exports?

Suppose that the productivity per worker in the Good X and Good Y industries of Country A and Country B are as follows: In order for there to be no gains from trade,what would the Country B productivity per worker in the Good X industry need to be?

In 2012,approximately what percentage of Canada's merchandize exports were petroleum and other fuels?

Explain the theory of comparative advantage.How does it differ from the theory of absolute advantage?

-Refer to above figure to answer this question.Suppose that both Harmony and Tranquility are producing 20 pears;what will be the total gains from trade for the two countries?

Does the principle of comparative advantage tell us how the gains from trade will be distributed? Explain.

In the mind of Adam Smith,what is true if person A voluntarily sells a good or service and person B voluntarily buys it?

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada. -Refer to the graph above to answer this question.Assuming no trade,what is the opportunity cost of 1 more railcar?

List five ways to restrict imports.

Who was the originator of the Theory of Absolute Advantage?

The chart below refers to the economy of Smith Island. -Refer to the graph above to answer this question.How much is Smith Island producing at the world (free trade)price of cloth?

All of the following,except one,are arguments against free trade.Which is the exception?

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