Question 1

Which of the following statements regarding trade is NOT true?

Accepted Answer

A)  Trade increases productivity through specialization and production according to comparative advantage. 
B)  Trade raises the price of goods for both trading partners. 
C)  Trade increases productivity through specialization and the division of knowledge. 
D)  Trade makes people better off when preferences differ. 
A)  Trade increases productivity through specialization and production according to comparative advantage. 
B)  Trade raises the price of goods for both trading partners. 
C)  Trade increases productivity through specialization and the division of knowledge. 
D)  Trade makes people better off when preferences differ.

Question 2

Economic theory supports the existence of specialized majors in college.

Accepted Answer

A) True 
 B)False

Question 3

Use the following to answer questions 
Figure: International Trade 4  
-(Figure: International Trade 4)Refer to the figure.If,in this figure,the government allowed free trade,consumer surplus would:

Accepted Answer

A)  increase by $118. 
B)  increase by $31.50. 
C)  decrease by $81. 
D)  increase by $66.50. 
A)  increase by $118. 
B)  increase by $31.50. 
C)  decrease by $81. 
D)  increase by $66.50.

Question 4

Domestic consumers lose more than domestic producers gain because of import restrictions.

Accepted Answer

A) True 
 B)False

Question 5

Trade increases competition for domestic producers and results in lower prices of domestic goods.

Accepted Answer

A) True 
 B)False

Question 6

Restrictions on trade:

Accepted Answer

A)  reduce income,increasing the necessity of child labor. 
B)  reduce child labor by making countries more reliant on adult labor. 
C)  will allow children to leave jobs in agriculture for higher-paying jobs in manufacturing. 
D)  lead to higher income for developing countries but not industrialized countries. 
A)  reduce income,increasing the necessity of child labor. 
B)  reduce child labor by making countries more reliant on adult labor. 
C)  will allow children to leave jobs in agriculture for higher-paying jobs in manufacturing. 
D)  lead to higher income for developing countries but not industrialized countries.

Question 7

The United States is the only government that engages in protectionist policies.

Accepted Answer

A) True 
 B)False

Question 8

You are a policymaker and a lobbyist comes to you,arguing that his industry is important for national security and has important spillover benefits.Why might you be suspicious of his claims?

Accepted Answer

A)  He may not know anything about the industry he represents. 
B)  His industry benefits from tariffs that decrease foreign competition. 
C)  The lobbyist has the same interests as the rest of the country. 
D)  Every industry is important for national security. 
A)  He may not know anything about the industry he represents. 
B)  His industry benefits from tariffs that decrease foreign competition. 
C)  The lobbyist has the same interests as the rest of the country. 
D)  Every industry is important for national security.

Question 9

Use the following to answer questions 
Figure: Trade  
-(Figure: Trade)Refer to the figure.If this figure represents the market for oil and the country imposes no tariffs on international trade,domestic consumption will be:

Accepted Answer

A)  500 units. 
B)  1,000 units. 
C)  1,150 units. 
D)  1,300 units. 
A)  500 units. 
B)  1,000 units. 
C)  1,150 units. 
D)  1,300 units.

Question 10

What are the gains and losses of a trade restriction versus free trade? Explain carefully.

Accepted Answer

There are two types of losses from a tra

Question 11

All of the following reduce child labor,EXCEPT:

Accepted Answer

A)  greater wealth. 
B)  trade restrictions. 
C)  openness to trade. 
D)  a lower opportunity cost of education. 
A)  greater wealth. 
B)  trade restrictions. 
C)  openness to trade. 
D)  a lower opportunity cost of education.

Question 12

Use the following to answer questions 
Figure: Foreign Trade  
-(Figure: Foreign Trade)Refer to the figure.What quantity would be imported?

Accepted Answer

A)  600 
B)  1,400 
C)  1,000 
D)  800 
A)  600 
B)  1,400 
C)  1,000 
D)  800

Which of the following statements regarding trade is NOT true?

Economic theory supports the existence of specialized majors in college.

Use the following to answer questions Figure: International Trade 4 -(Figure: International Trade 4)Refer to the figure.If,in this figure,the government allowed free trade,consumer surplus would:

Domestic consumers lose more than domestic producers gain because of import restrictions.

Trade increases competition for domestic producers and results in lower prices of domestic goods.

Restrictions on trade:

The United States is the only government that engages in protectionist policies.

You are a policymaker and a lobbyist comes to you,arguing that his industry is important for national security and has important spillover benefits.Why might you be suspicious of his claims?

Use the following to answer questions Figure: Trade -(Figure: Trade)Refer to the figure.If this figure represents the market for oil and the country imposes no tariffs on international trade,domestic consumption will be:

What are the gains and losses of a trade restriction versus free trade? Explain carefully.

All of the following reduce child labor,EXCEPT:

Use the following to answer questions Figure: Foreign Trade -(Figure: Foreign Trade)Refer to the figure.What quantity would be imported?

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Finance

Political Economy and Public Choice

Filters

Exam 19: International Trade

Which of the following statements regarding trade is NOT true?

Economic theory supports the existence of specialized majors in college.

Use the following to answer questions Figure: International Trade 4 -(Figure: International Trade 4)Refer to the figure.If,in this figure,the government allowed free trade,consumer surplus would:

Domestic consumers lose more than domestic producers gain because of import restrictions.

Trade increases competition for domestic producers and results in lower prices of domestic goods.

Restrictions on trade:

The United States is the only government that engages in protectionist policies.

You are a policymaker and a lobbyist comes to you,arguing that his industry is important for national security and has important spillover benefits.Why might you be suspicious of his claims?

Use the following to answer questions Figure: Trade -(Figure: Trade)Refer to the figure.If this figure represents the market for oil and the country imposes no tariffs on international trade,domestic consumption will be:

What are the gains and losses of a trade restriction versus free trade? Explain carefully.

All of the following reduce child labor,EXCEPT:

Use the following to answer questions Figure: Foreign Trade -(Figure: Foreign Trade)Refer to the figure.What quantity would be imported?

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Finance

Political Economy and Public Choice

Filters