Question 1

One reason a country does not specialise completely in production is that not all goods and services are traded internationally.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  One that 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 that 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 3

Why do domestic firms offshore production processes?

Accepted Answer

To reduce

Question 4

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 hat : 2 clocks. 
B)  1 hat : 4 clocks. 
C)  1 hat : 5 clocks. 
D)  1 hat : 8 clocks. 
A)  1 hat : 2 clocks. 
B)  1 hat : 4 clocks. 
C)  1 hat : 5 clocks. 
D)  1 hat : 8 clocks.

Question 5

In 2009,approximately what proportion of world merchandise trade did Australia account for?

Accepted Answer

A)  1 per cent 
B)  12 per cent 
C)  8 per cent 
D)  5 per cent 
A)  1 per cent 
B)  12 per cent 
C)  8 per cent 
D)  5 per cent

Question 6

Selling a product at a price below its cost is known as dumping.

Accepted Answer

A) True 
 B)False

Question 7

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 consume?

Accepted Answer

A)  100 
B)  130 
C)  250 
D)  400 
A)  100 
B)  130 
C)  250 
D)  400

Question 8

Between 1960 and 2010,Australia's imports increased from approximately

Accepted Answer

A)  15 per cent of GDP to 20 per cent of GDP. 
B)  10 per cent of GDP to 18 per cent of GDP. 
C)  24 per cent of GDP to 30 per cent of GDP. 
D)  35 per cent of GDP to 50 per cent of GDP. 
A)  15 per cent of GDP to 20 per cent of GDP. 
B)  10 per cent of GDP to 18 per cent of GDP. 
C)  24 per cent of GDP to 30 per cent of GDP. 
D)  35 per cent of GDP to 50 per cent of GDP.

Question 9

Absolute advantage is

Accepted Answer

A)  the ability to produce more of a good or service than competitors when using the same amount of resources. 
B)  the ability to produce higher quality goods compared to one's competitors. 
C)  the ability to produce a good or service at a higher opportunity cost than one's competitors. 
D)  the ability to produce more of a good or service than competitors who have more resources. 
A)  the ability to produce more of a good or service than competitors when using the same amount of resources. 
B)  the ability to produce higher quality goods compared to one's competitors. 
C)  the ability to produce a good or service at a higher opportunity cost than one's competitors. 
D)  the ability to produce more of a good or service than competitors who have more resources.

Question 10

If Japanese workers are more productive than French workers,then trade between Japan and France

Accepted Answer

A)  can take place only if France has an absolute advantage in producing a good or service Japanese buyers want. 
B)  cannot take place because Japanese goods and services will be less expensive than French goods and services. 
C)  cannot take place until French workers become more productive. 
D)  will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want. 
A)  can take place only if France has an absolute advantage in producing a good or service Japanese buyers want. 
B)  cannot take place because Japanese goods and services will be less expensive than French goods and services. 
C)  cannot take place until French workers become more productive. 
D)  will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want.

Question 11

If the opportunity cost of production for two goods is different between two countries,then

Accepted Answer

A)  trade cannot benefit either country. 
B)  only one country can be made better off by trade. 
C)  mutually beneficial trade is possible. 
D)  trade will only benefit both countries if one can lower its opportunity costs. 
A)  trade cannot benefit either country. 
B)  only one country can be made better off by trade. 
C)  mutually beneficial trade is possible. 
D)  trade will only benefit both countries if one can lower its opportunity costs.

Question 12

What is a tariff?

Accepted Answer

A tariff is a tax im

Question 13

Table 18-3
   Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

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

Question 14

A quota

Accepted Answer

A)  makes domestic consumers better off. 
B)  makes both domestic producers and consumers better off. 
C)  makes everyone worse off. 
D)  makes domestic producers better off. 
A)  makes domestic consumers better off. 
B)  makes both domestic producers and consumers better off. 
C)  makes everyone worse off. 
D)  makes domestic producers better off.

Question 15

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.Which country has a comparative advantage in producing hats?

Accepted Answer

A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country 
A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country

Question 16

Table 18-5
   Table 18-5 shows the output per week for bows and arrows by Ahmet and MyLinh.
-Refer to Table 18-5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh.

Accepted Answer

The answer of Table 18-5
   Table 18-5 shows...

Question 17

Many economists criticise protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

Accepted Answer

A)  The criticisms of economists are based on theory. In fact, protectionism increases consumer and producer surplus as well as employment. 
B)  Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C)  Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D)  Supporters of protectionism believe that free trade will lead to inflation. 
A)  The criticisms of economists are based on theory. In fact, protectionism increases consumer and producer surplus as well as employment. 
B)  Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C)  Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D)  Supporters of protectionism believe that free trade will lead to inflation.

Question 18

What are three primary reasons for the growth of international trade over the past 50 years?

Accepted Answer

The increase in trade is the r

Question 19

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 20

A tariff is

Accepted Answer

A)  a limit placed on the quantity of goods that can be imported into a country. 
B)  a tax imposed by a government on goods imported into a country. 
C)  a subsidy granted to importers of a vital input. 
D)  a health and safety restriction imposed on an imported product. 
A)  a limit placed on the quantity of goods that can be imported into a country. 
B)  a tax imposed by a government on goods imported into a country. 
C)  a subsidy granted to importers of a vital input. 
D)  a health and safety restriction imposed on an imported product.

One reason a country does not specialise completely in production is that not all goods and services are traded internationally.

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

Why do domestic firms offshore production processes?

In 2009,approximately what proportion of world merchandise trade did Australia account for?

Selling a product at a price below its cost is known as dumping.

Between 1960 and 2010,Australia's imports increased from approximately

Absolute advantage is

If Japanese workers are more productive than French workers,then trade between Japan and France

If the opportunity cost of production for two goods is different between two countries,then

What is a tariff?

Table 18-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

A quota

Table 18-5 Table 18-5 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 18-5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh.

Many economists criticise protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

What are three primary reasons for the growth of international trade over the past 50 years?

Firms offshore

A tariff is

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

One reason a country does not specialise completely in production is that not all goods and services are traded internationally.

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

Why do domestic firms offshore production processes?

In 2009,approximately what proportion of world merchandise trade did Australia account for?

Selling a product at a price below its cost is known as dumping.

Between 1960 and 2010,Australia's imports increased from approximately

Absolute advantage is

If Japanese workers are more productive than French workers,then trade between Japan and France

If the opportunity cost of production for two goods is different between two countries,then

What is a tariff?

Table 18-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

A quota

Table 18-5 Table 18-5 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 18-5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh.

Many economists criticise protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

What are three primary reasons for the growth of international trade over the past 50 years?

Firms offshore

A tariff is

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