Question 1

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3
  
-In 1992, the EEC was replaced by the EU with an agreement to:

Accepted Answer

A) erect strong trade barriers among the member countries. 
B) reduce trade barriers against nonmember countries. 
C) mutually restrict all imports from nonmember countries. 
D) create a single market for goods and services in western Europe. 
E) enable the countries of Western Europe to emerge as major world powers. 
A) erect strong trade barriers among the member countries. 
B) reduce trade barriers against nonmember countries. 
C) mutually restrict all imports from nonmember countries. 
D) create a single market for goods and services in western Europe. 
E) enable the countries of Western Europe to emerge as major world powers. D

Question 2

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-Proponents of strategic trade policy contend that:

Accepted Answer

A) government should tax domestic firms to generate greater revenues. 
B) government should encourage imports to prevent monopoly in the domestic market. 
C) government should provide subsidies to domestic firms with decreasing costs. 
D) government should discourage domestic firms with decreasing costs from continuing production. 
E) government should tax domestic import competing firms. 
A) government should tax domestic firms to generate greater revenues. 
B) government should encourage imports to prevent monopoly in the domestic market. 
C) government should provide subsidies to domestic firms with decreasing costs. 
D) government should discourage domestic firms with decreasing costs from continuing production. 
E) government should tax domestic import competing firms. C

Question 3

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-Which of the following tools of commercial policy yields a revenue to the government?

Accepted Answer

A) Quota 
B) Tariff 
C) Export subsidy 
D) Government procurement policy 
E) Health and safety standards 
A) Quota 
B) Tariff 
C) Export subsidy 
D) Government procurement policy 
E) Health and safety standards B

Question 4

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2
  
-In Figure 21.2, if the world price of wheat is $25 and a $10 tariff is imposed:

Accepted Answer

A) imports will decrease from 300 to 200 bushels of wheat. 
B) imports will increase from 200 to 400 bushels of wheat. 
C) imports will remain unchanged. 
D) domestic production will decrease from 200 to 150 bushels of wheat. 
E) domestic production will remain unchanged. 
A) imports will decrease from 300 to 200 bushels of wheat. 
B) imports will increase from 200 to 400 bushels of wheat. 
C) imports will remain unchanged. 
D) domestic production will decrease from 200 to 150 bushels of wheat. 
E) domestic production will remain unchanged.

Question 5

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-When restrictions alter the pattern of international trade, the _____ benefit and the _____ suffer(s).

Accepted Answer

A) domestic consumers; domestic producers 
B) domestic consumers; government 
C) domestic producers; domestic consumers 
D) foreign producers; domestic producers 
E) foreign producers; domestic consumers 
A) domestic consumers; domestic producers 
B) domestic consumers; government 
C) domestic producers; domestic consumers 
D) foreign producers; domestic producers 
E) foreign producers; domestic consumers

Question 6

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3
  
-In Figure 21.3, with an import quota of 30 gallons of corn syrup, what is the new equilibrium price?

Accepted Answer

A) $4 
B) $6 
C) $8 
D) $10 
E) $12 
A) $4 
B) $6 
C) $8 
D) $10 
E) $12

Question 7

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
  
-Protecting infant industries from foreign competition may make sense, but only until the industry matures.

Accepted Answer

A) True 
 B)False

Question 8

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3
  
-Agreements to abolish most barriers to trade among nations are known as:

Accepted Answer

A) collusive trade agreements. 
B) discriminatory trade agreements. 
C) neutral trade agreements. 
D) preferential trade agreements. 
E) retaliatory trade agreements. 
A) collusive trade agreements. 
B) discriminatory trade agreements. 
C) neutral trade agreements. 
D) preferential trade agreements. 
E) retaliatory trade agreements.

Question 9

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
  
-Domestic firms often claim that foreign firms have an unfair advantage because foreign workers are willing to work for very low wages.

Accepted Answer

A) True 
 B)False

Question 10

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-Which of the following is true of a tariff?

Accepted Answer

A) It is a tax levied by the government on domestic production of goods and services. 
B) It is a quantitative restriction on imports imposed by the government. 
C) It is a monetary benefit received by exporters from the government. 
D) It is a monetary benefit received by importers from the government. 
E) It is a tax on import and export levied by the government. 
A) It is a tax levied by the government on domestic production of goods and services. 
B) It is a quantitative restriction on imports imposed by the government. 
C) It is a monetary benefit received by exporters from the government. 
D) It is a monetary benefit received by importers from the government. 
E) It is a tax on import and export levied by the government.

Question 11

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2
  
-Suppose that the world price of kiwi fruit ($10 per box) is below the domestic price ($12 per box). A tariff of $1 per box would:

Accepted Answer

A) cause foreign producers to be better off, because the price they charge is now higher by $1 per box. 
B) cause domestic producers to be worse off by $5 per box. 
C) make domestic consumers worse off as they would be paying $1 more than the domestic price. 
D) make domestic consumers pay $1 more than the free trade price, but still $1 less than the domestic price. 
E) cause domestic producers to be worse off by $10 per box. 
A) cause foreign producers to be better off, because the price they charge is now higher by $1 per box. 
B) cause domestic producers to be worse off by $5 per box. 
C) make domestic consumers worse off as they would be paying $1 more than the domestic price. 
D) make domestic consumers pay $1 more than the free trade price, but still $1 less than the domestic price. 
E) cause domestic producers to be worse off by $10 per box.

Question 12

The figure below shows the demand (D) and supply (S) curves of a good produced domestically in an economy as well as traded in the international market.Figure 21.1
In the figure,
PS1U1B11S1U1B0: Price of the good in the international market.PS1U1B12S1U1B0: Price of the good in the domestic market after the imposition of tariff by the government.PS1U1B13S1U1B0: No-trade price of the good in the domestic market.  
-According to Figure 21.1, if the international price of the good is P1, which of the following statements is true?

Accepted Answer

A) The domestic market is in equilibrium. 
B) There is an excess supply in the domestic market by the amount Q4 - Q2. 
C) The country will export Q3 - Q1 units of the good. 
D) There is an excess demand of Q4 - Q2 units in the domestic market. 
E) The country needs to import Q5 - Q1 units of the good to satisfy domestic demand. 
A) The domestic market is in equilibrium. 
B) There is an excess supply in the domestic market by the amount Q4 - Q2. 
C) The country will export Q3 - Q1 units of the good. 
D) There is an excess demand of Q4 - Q2 units in the domestic market. 
E) The country needs to import Q5 - Q1 units of the good to satisfy domestic demand.

Question 13

The figure below shows the demand (D) and supply (S) curves of a good produced domestically in an economy as well as traded in the international market.Figure 21.1
In the figure,
PS1U1B11S1U1B0: Price of the good in the international market.PS1U1B12S1U1B0: Price of the good in the domestic market after the imposition of tariff by the government.PS1U1B13S1U1B0: No-trade price of the good in the domestic market.  
-Which of the following would result from a tariff?

Accepted Answer

A) An increase in government budget deficit 
B) An increase in domestic production 
C) A greater volume of international trade 
D) Increased domestic consumption 
E) Decrease in prices of the imported goods 
A) An increase in government budget deficit 
B) An increase in domestic production 
C) A greater volume of international trade 
D) Increased domestic consumption 
E) Decrease in prices of the imported goods

Question 14

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-The infant industry argument is that:

Accepted Answer

A) those industries that produce products for infants should be protected. 
B) developing industries should be allowed to face foreign competition. 
C) protectionism should be used to create a level playing field for the domestic firms to compete with foreign firms. 
D) protectionism promotes complete specialization in the country on the basis of comparative advantage. 
E) new industries should be protected from foreign competition until they have had adequate time to develop. 
A) those industries that produce products for infants should be protected. 
B) developing industries should be allowed to face foreign competition. 
C) protectionism should be used to create a level playing field for the domestic firms to compete with foreign firms. 
D) protectionism promotes complete specialization in the country on the basis of comparative advantage. 
E) new industries should be protected from foreign competition until they have had adequate time to develop.

Question 15

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-If international trade is restricted by the government of a country:

Accepted Answer

A) the domestic consumers are benefited. 
B) the domestic producers are adversely affected. 
C) the domestic consumers pay higher prices for imported goods. 
D) the resources are equally distributed among domestic and foreign producers. 
E) the resources are allocated to their highest paid uses. 
A) the domestic consumers are benefited. 
B) the domestic producers are adversely affected. 
C) the domestic consumers pay higher prices for imported goods. 
D) the resources are equally distributed among domestic and foreign producers. 
E) the resources are allocated to their highest paid uses.

Question 16

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
  
-In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand.

Accepted Answer

A) True 
 B)False

Question 17

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-Which of the following is a tool of commercial policy?

Accepted Answer

A) Corporate income tax 
B) Payroll tax 
C) Excise duty 
D) Tariff 
E) Octroi duty 
A) Corporate income tax 
B) Payroll tax 
C) Excise duty 
D) Tariff 
E) Octroi duty

Question 18

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
  
-Preferential trade agreements have a beneficial trade-diversion effect when they reduce prices for traded goods and stimulate the volume of international trade.

Accepted Answer

A) True 
 B)False

Question 19

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
  
-In order to protect key industries, some countries impose taxes on their exports instead of imports, mainly because it is easier to collect taxes from the export industry.

Accepted Answer

A) True 
 B)False

Question 20

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
  
-One of the primary objectives of the WTO is:

Accepted Answer

A) to create trade restrictions across the countries. 
B) to reduce trade barriers created by the different countries. 
C) to enable certain countries to maintain their autarkic conditions. 
D) to enable the western countries to emerge as major players in the international trade. 
E) to redistribute wealth from the first world to the third world countries. 
A) to create trade restrictions across the countries. 
B) to reduce trade barriers created by the different countries. 
C) to enable certain countries to maintain their autarkic conditions. 
D) to enable the western countries to emerge as major players in the international trade. 
E) to redistribute wealth from the first world to the third world countries.

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3 -In 1992, the EEC was replaced by the EU with an agreement to:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Proponents of strategic trade policy contend that:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Which of the following tools of commercial policy yields a revenue to the government?

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2 -In Figure 21.2, if the world price of wheat is $25 and a $10 tariff is imposed:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -When restrictions alter the pattern of international trade, the _ benefit and the _ suffer(s).

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3 -In Figure 21.3, with an import quota of 30 gallons of corn syrup, what is the new equilibrium price?

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -Protecting infant industries from foreign competition may make sense, but only until the industry matures.

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3 -Agreements to abolish most barriers to trade among nations are known as:

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -Domestic firms often claim that foreign firms have an unfair advantage because foreign workers are willing to work for very low wages.

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Which of the following is true of a tariff?

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2 -Suppose that the world price of kiwi fruit ($10 per box) is below the domestic price ($12 per box). A tariff of $1 per box would:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -The infant industry argument is that:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -If international trade is restricted by the government of a country:

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand.

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Which of the following is a tool of commercial policy?

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -Preferential trade agreements have a beneficial trade-diversion effect when they reduce prices for traded goods and stimulate the volume of international trade.

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -In order to protect key industries, some countries impose taxes on their exports instead of imports, mainly because it is easier to collect taxes from the export industry.

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -One of the primary objectives of the WTO is:

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

Markets and the Price System

The Aggregate Economy

Using Economics to Understand the World Around You

Elasticity: Demand and Supply

Demand: Consumer Choice

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Markets and Government

Antitrust and Regulation

Resource Markets

The Labor Market

The Capital Market

The Land Market and Natural Resources

Current Issues: Income, Income Distribution, Poverty, and Government Policy

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

Filters

Exam 21: International Trade Restrictions

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3 -In 1992, the EEC was replaced by the EU with an agreement to:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Proponents of strategic trade policy contend that:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Which of the following tools of commercial policy yields a revenue to the government?

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2 -In Figure 21.2, if the world price of wheat is $25 and a $10 tariff is imposed:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -When restrictions alter the pattern of international trade, the _____ benefit and the _____ suffer(s).

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3 -In Figure 21.3, with an import quota of 30 gallons of corn syrup, what is the new equilibrium price?

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -Protecting infant industries from foreign competition may make sense, but only until the industry matures.

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3 -Agreements to abolish most barriers to trade among nations are known as:

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -Domestic firms often claim that foreign firms have an unfair advantage because foreign workers are willing to work for very low wages.

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Which of the following is true of a tariff?

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2 -Suppose that the world price of kiwi fruit ($10 per box) is below the domestic price ($12 per box). A tariff of $1 per box would:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -The infant industry argument is that:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -If international trade is restricted by the government of a country:

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand.

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -Which of the following is a tool of commercial policy?

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -Preferential trade agreements have a beneficial trade-diversion effect when they reduce prices for traded goods and stimulate the volume of international trade.

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4 -In order to protect key industries, some countries impose taxes on their exports instead of imports, mainly because it is easier to collect taxes from the export industry.

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -One of the primary objectives of the WTO is:

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

Markets and the Price System

The Aggregate Economy

Using Economics to Understand the World Around You

Elasticity: Demand and Supply

Demand: Consumer Choice

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Markets and Government

Antitrust and Regulation

Resource Markets

The Labor Market

The Capital Market

The Land Market and Natural Resources

Current Issues: Income, Income Distribution, Poverty, and Government Policy

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

Filters

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5 -When restrictions alter the pattern of international trade, the _ benefit and the _ suffer(s).