Question 1

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Accepted Answer

A)  Absolute advantage 
B)  Specialisation 
C)  Autarky 
D)  Comparative advantage 
A)  Absolute advantage 
B)  Specialisation 
C)  Autarky 
D)  Comparative advantage D

Question 2

What is an 'open economy'?

Accepted Answer

It is an economy that exports a large proportion of its output (GDP)and/or has few or no barriers to international trade.

Question 3

Measuring the impact of a quota or tariff on the economy is an example of ________.Stating that a quota or tariff should be eliminated is an example of ________.

Accepted Answer

A)  statistical analysis; economic analysis 
B)  positive analysis; normative analysis 
C)  econometric analysis; protectionism 
D)  trade analysis; an opinion 
A)  statistical analysis; economic analysis 
B)  positive analysis; normative analysis 
C)  econometric analysis; protectionism 
D)  trade analysis; an opinion B

Question 4

Examples of ________ show how trade between two countries can make each better off.

Accepted Answer

A)  absolute advantage 
B)  comparative advantage 
C)  autarky 
D)  trade barriers 
A)  absolute advantage 
B)  comparative advantage 
C)  autarky 
D)  trade barriers

Question 5

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

Accepted Answer

A)  they do not want to offend their employers who want them. 
B)  politicians lobby to convince workers the restrictions will make them better off. 
C)  they believe the restrictions will protect their jobs. 
D)  they don't understand that the restrictions will threaten their jobs. 
A)  they do not want to offend their employers who want them. 
B)  politicians lobby to convince workers the restrictions will make them better off. 
C)  they believe the restrictions will protect their jobs. 
D)  they don't understand that the restrictions will threaten their jobs.

Question 6

The main purpose of most tariffs and quotas is to

Accepted Answer

A)  raise revenue for the government. 
B)  reduce the prices consumers pay for goods and services. 
C)  reduce the foreign competition that domestic firms face. 
D)  improve the quality of goods and services imported into the country. 
A)  raise revenue for the government. 
B)  reduce the prices consumers pay for goods and services. 
C)  reduce the foreign competition that domestic firms face. 
D)  improve the quality of goods and services imported into the country.

Question 7

Under autarky,domestic producer surplus is represented by the area

Accepted Answer

A)  above the supply curve and below the equilibrium price. 
B)  above the supply curve and below the demand curve. 
C)  below the demand curve and above the equilibrium price. 
D)  above the demand curve and below the supply curve. 
A)  above the supply curve and below the equilibrium price. 
B)  above the supply curve and below the demand curve. 
C)  below the demand curve and above the equilibrium price. 
D)  above the demand curve and below the supply curve.

Question 8

Japan has developed a comparative advantage in designing and producing automobiles.The source of its comparative advantage in these products is

Accepted Answer

A)  abundant supplies of natural resources. 
B)  a favourable climate. 
C)  a strong central government. 
D)  technology. 
A)  abundant supplies of natural resources. 
B)  a favourable climate. 
C)  a strong central government. 
D)  technology.

Question 9

Offshoring is

Accepted Answer

A)  when workers in a foreign country are hired by a domestic firm to produce something sold domestically. 
B)  importing a manufactured good made by a foreign firm. 
C)  exporting a good or service to buyers in other countries. 
D)  when domestic workers are hired by a domestic firm to produce something sold exclusively in other countries. 
A)  when workers in a foreign country are hired by a domestic firm to produce something sold domestically. 
B)  importing a manufactured good made by a foreign firm. 
C)  exporting a good or service to buyers in other countries. 
D)  when domestic workers are hired by a domestic firm to produce something sold exclusively in other countries.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Table 18-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Belize gain compared to the 'without trade' numbers?

Accepted Answer

A)  -100 
B)  0 
C)  150 
D)  250 
A)  -100 
B)  0 
C)  150 
D)  250

Question 12

Once a country has a comparative advantage in producing a product,it cannot lose that advantage.

Accepted Answer

A) True 
 B)False

Question 13

One of the main sources of comparative advantage is internal economies.

Accepted Answer

A) True 
 B)False

Question 14

Protectionism

Accepted Answer

A)  is the use of cheap labour to protect firms from paying high wages. 
B)  is the use of trade barriers to protect domestic firms from foreign competition. 
C)  refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D)  refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts. 
A)  is the use of cheap labour to protect firms from paying high wages. 
B)  is the use of trade barriers to protect domestic firms from foreign competition. 
C)  refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D)  refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts.

Question 15

Whenever a buyer and a seller agree to trade,

Accepted Answer

A)  the agreement is made based on absolute advantage. 
B)  they must have identical opportunity costs in producing their respective products. 
C)  one party will always be worse off. 
D)  both must believe they will be made better off. 
A)  the agreement is made based on absolute advantage. 
B)  they must have identical opportunity costs in producing their respective products. 
C)  one party will always be worse off. 
D)  both must believe they will be made better off.

Question 16

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.

Question 17

Table 18-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Denmark consume?

Accepted Answer

A)  150 
B)  180 
C)  270 
D)  400 
A)  150 
B)  180 
C)  270 
D)  400

Question 18

Table 18-2
   Sarita and Gabriel own S&G Bakery. Table 18-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 18-2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Sarita has a comparative advantage in baking pies. 
B)  Gabriel has a comparative advantage in baking cakes. 
C)  Sarita has a comparative advantage in baking pies and baking cakes. 
D)  Sarita has a comparative advantage in baking cakes. 
A)  Sarita has a comparative advantage in baking pies. 
B)  Gabriel has a comparative advantage in baking cakes. 
C)  Sarita has a comparative advantage in baking pies and baking cakes. 
D)  Sarita has a comparative advantage in baking cakes.

Question 19

Trade between countries that is without restrictions is called

Accepted Answer

A)  unobstructed commerce. 
B)  unabated trade. 
C)  free trade. 
D)  unencumbered trade. 
A)  unobstructed commerce. 
B)  unabated trade. 
C)  free trade. 
D)  unencumbered trade.

Question 20

Table 18-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.All of the following are terms of trade that could possibly benefit both countries except

Accepted Answer

A)  1/5 of a hat : 1 clock. 
B)  1/3 of a hat : 1 clock. 
C)  1/2 of a hat : 1 clock. 
D)  3/4 of a hat : 1 clock. 
A)  1/5 of a hat : 1 clock. 
B)  1/3 of a hat : 1 clock. 
C)  1/2 of a hat : 1 clock. 
D)  3/4 of a hat : 1 clock.

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

What is an 'open economy'?

Measuring the impact of a quota or tariff on the economy is an example of .Stating that a quota or tariff should be eliminated is an example of .

Examples of ________ show how trade between two countries can make each better off.

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

The main purpose of most tariffs and quotas is to

Under autarky,domestic producer surplus is represented by the area

Japan has developed a comparative advantage in designing and producing automobiles.The source of its comparative advantage in these products is

Offshoring is

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

Once a country has a comparative advantage in producing a product,it cannot lose that advantage.

One of the main sources of comparative advantage is internal economies.

Protectionism

Whenever a buyer and a seller agree to trade,

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

Table 18-2 Sarita and Gabriel own S&G Bakery. Table 18-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 18-2.Select the statement that accurately interprets the data in the table.

Trade between countries that is without restrictions is called

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 18: Fiscal Policy

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

What is an 'open economy'?

Measuring the impact of a quota or tariff on the economy is an example of ________.Stating that a quota or tariff should be eliminated is an example of ________.

Examples of ________ show how trade between two countries can make each better off.

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

The main purpose of most tariffs and quotas is to

Under autarky,domestic producer surplus is represented by the area

Japan has developed a comparative advantage in designing and producing automobiles.The source of its comparative advantage in these products is

Offshoring is

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

Once a country has a comparative advantage in producing a product,it cannot lose that advantage.

One of the main sources of comparative advantage is internal economies.

Protectionism

Whenever a buyer and a seller agree to trade,

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

Table 18-2 Sarita and Gabriel own S&G Bakery. Table 18-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 18-2.Select the statement that accurately interprets the data in the table.

Trade between countries that is without restrictions is called

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Measuring the impact of a quota or tariff on the economy is an example of .Stating that a quota or tariff should be eliminated is an example of .