Question 1

Imposing a restrictive quota on the import of sugar will likely:

Accepted Answer

A)  increase the price of sugar and decrease the quantity consumed. 
B)  increase the price of sugar and increase the quantity consumed. 
C)  leave the price of sugar unchanged and decrease the quantity consumed. 
D)  leave the price of sugar unchanged and increase the quantity consumed. 
A)  increase the price of sugar and decrease the quantity consumed. 
B)  increase the price of sugar and increase the quantity consumed. 
C)  leave the price of sugar unchanged and decrease the quantity consumed. 
D)  leave the price of sugar unchanged and increase the quantity consumed.

Question 2

A tariff is a:

Accepted Answer

A)  tax on imports. 
B)  subsidy on exports. 
C)  restriction on the quantity of domestic goods consumed by foreigners. 
D)  restriction on the quantity of imports from foreign producers. 
A)  tax on imports. 
B)  subsidy on exports. 
C)  restriction on the quantity of domestic goods consumed by foreigners. 
D)  restriction on the quantity of imports from foreign producers.

Question 3

Use the following to answer questions 
Figure: World Imports  
-(Figure: World Imports)Refer to the figure.The solution for a country without trade restrictions is where the equilibrium price and quantity are ________,respectively.

Accepted Answer

A)  $20 and 4 
B)  $40 and 11 
C)  $20 and 11 
D)  $20 and 20 
A)  $20 and 4 
B)  $40 and 11 
C)  $20 and 11 
D)  $20 and 20

Question 4

If the United States bans the importation of Japanese automobiles:

Accepted Answer

A)  U.S.consumers of cars will be better off because their consumer surplus increases. 
B)  there will likely be more U.S.auto workers but fewer Americans working in other industries. 
C)  U.S.producers of cars will be worse off because their producer surplus shrinks. 
D)  everyone in the United States will be much better off. 
A)  U.S.consumers of cars will be better off because their consumer surplus increases. 
B)  there will likely be more U.S.auto workers but fewer Americans working in other industries. 
C)  U.S.producers of cars will be worse off because their producer surplus shrinks. 
D)  everyone in the United States will be much better off.

Question 5

A quota is a stated quality standard that an imported good must reach before it can be allowed into the borders of the importing country.

Accepted Answer

A) True 
 B)False

Question 6

As a result of tariffs,domestic producers tend to:

Accepted Answer

A)  gain more than domestic consumers lose. 
B)  spend less money on lobbying. 
C)  have a greater incentive to lower their production costs. 
D)  lose more than the government gains. 
A)  gain more than domestic consumers lose. 
B)  spend less money on lobbying. 
C)  have a greater incentive to lower their production costs. 
D)  lose more than the government gains.

Question 7

If the world price of a good is greater than the domestic price in a country that can engage in international trade,then that country becomes an importer of that good.

Accepted Answer

A) True 
 B)False

Question 8

A tariff ______ the world supply of a good.

Accepted Answer

A)  reduces 
B)  increases 
C)  does not change 
D)  has no measurable effect on 
A)  reduces 
B)  increases 
C)  does not change 
D)  has no measurable effect on

Question 9

Sugar production is highly protected in the United States.Sugar importers must pay such high tariffs that it is hardly profitable for them to sell any sugar in the United States.Who are the winners and losers from such protectionism? Is the resulting market economically efficient? Why? If not,why would the government continue import restrictions that promote economic inefficiency?

Accepted Answer

The winners from tariffs such as those i

Question 10

Which statement is TRUE?

Accepted Answer

A)  Although inefficient,trade restrictions are effective at reducing child labor. 
B)  Most child labor around the world takes place in factories that export products. 
C)  Rising real GDP per capita has been an important force in reducing child labor. 
D)  About 50% of the world's children aged 10 to 14 work. 
A)  Although inefficient,trade restrictions are effective at reducing child labor. 
B)  Most child labor around the world takes place in factories that export products. 
C)  Rising real GDP per capita has been an important force in reducing child labor. 
D)  About 50% of the world's children aged 10 to 14 work.

Question 11

The United States is not competitive with Brazil in sugar production partly because:

Accepted Answer

A)  the average United States climate is not ideal for sugar production. 
B)  the average Brazilian climate is not ideal for sugar production. 
C)  the United States does not focus on sugar production. 
D)  Brazil does not focus on sugar production. 
A)  the average United States climate is not ideal for sugar production. 
B)  the average Brazilian climate is not ideal for sugar production. 
C)  the United States does not focus on sugar production. 
D)  Brazil does not focus on sugar production.

Question 12

Trade makes people better off through specialization.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer questions 
Figure: Foreign Trade 2  
-(Figure: Foreign Trade 2)Refer to the figure.What is the dollar value of the producer surplus gained as a result of prohibiting trade in this market?

Accepted Answer

A)  $15,000 
B)  $30,000 
C)  $12,500 
D)  $22,500 
A)  $15,000 
B)  $30,000 
C)  $12,500 
D)  $22,500

Question 14

As GDP per capita increases,child labor tends to

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  change unpredictably. 
A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  change unpredictably.

Question 15

When the world price is below the domestic price,the elimination of a tariff decreases domestic production and provides a benefit because:

Accepted Answer

A)  it causes unemployment when workers are laid off. 
B)  it makes producers better off. 
C)  no one is harmed by the decreased production,and everybody pays lower prices. 
D)  it frees up resources that can be used to produce other goods and services. 
A)  it causes unemployment when workers are laid off. 
B)  it makes producers better off. 
C)  no one is harmed by the decreased production,and everybody pays lower prices. 
D)  it frees up resources that can be used to produce other goods and services.

Question 16

If,at a world price of $200,domestic consumers buy 900 units and domestic producers sell 600 units,imports equal 1,500.

Accepted Answer

A) True 
 B)False

Question 17

One of the costs of protectionism is:

Accepted Answer

A)  increases in total national output. 
B)  a reduction in the variety of goods in domestic markets. 
C)  greater competition. 
D)  lower opportunity costs of domestic production. 
A)  increases in total national output. 
B)  a reduction in the variety of goods in domestic markets. 
C)  greater competition. 
D)  lower opportunity costs of domestic production.

Question 18

If the U.S.government wanted to use strategic trade protectionism for U.S.-produced fertilizer it would:

Accepted Answer

A)  place high taxes on foreign-made fertilizer. 
B)  place a trade quota on foreign-made fertilizer. 
C)  subsidize U.S.producers of fertilizer. 
D)  place a tax or put a limit on the exports of U.S.fertilizer. 
A)  place high taxes on foreign-made fertilizer. 
B)  place a trade quota on foreign-made fertilizer. 
C)  subsidize U.S.producers of fertilizer. 
D)  place a tax or put a limit on the exports of U.S.fertilizer.

Question 19

We pay for our exports with our imports.

Accepted Answer

A) True 
 B)False

Question 20

Economists consider tariffs to be:

Accepted Answer

A)  necessary. 
B)  beneficial to domestic consumers. 
C)  harmful to domestic producers. 
D)  obstacles that reduce gains from trade. 
A)  necessary. 
B)  beneficial to domestic consumers. 
C)  harmful to domestic producers. 
D)  obstacles that reduce gains from trade.

Imposing a restrictive quota on the import of sugar will likely:

A tariff is a:

Use the following to answer questions Figure: World Imports -(Figure: World Imports)Refer to the figure.The solution for a country without trade restrictions is where the equilibrium price and quantity are ________,respectively.

If the United States bans the importation of Japanese automobiles:

A quota is a stated quality standard that an imported good must reach before it can be allowed into the borders of the importing country.

As a result of tariffs,domestic producers tend to:

If the world price of a good is greater than the domestic price in a country that can engage in international trade,then that country becomes an importer of that good.

A tariff ______ the world supply of a good.

Which statement is TRUE?

The United States is not competitive with Brazil in sugar production partly because:

Trade makes people better off through specialization.

Use the following to answer questions Figure: Foreign Trade 2 -(Figure: Foreign Trade 2)Refer to the figure.What is the dollar value of the producer surplus gained as a result of prohibiting trade in this market?

As GDP per capita increases,child labor tends to

When the world price is below the domestic price,the elimination of a tariff decreases domestic production and provides a benefit because:

If,at a world price of $200,domestic consumers buy 900 units and domestic producers sell 600 units,imports equal 1,500.

One of the costs of protectionism is:

If the U.S.government wanted to use strategic trade protectionism for U.S.-produced fertilizer it would:

We pay for our exports with our imports.

Economists consider tariffs to be:

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

Imposing a restrictive quota on the import of sugar will likely:

A tariff is a:

Use the following to answer questions Figure: World Imports -(Figure: World Imports)Refer to the figure.The solution for a country without trade restrictions is where the equilibrium price and quantity are ________,respectively.

If the United States bans the importation of Japanese automobiles:

A quota is a stated quality standard that an imported good must reach before it can be allowed into the borders of the importing country.

As a result of tariffs,domestic producers tend to:

If the world price of a good is greater than the domestic price in a country that can engage in international trade,then that country becomes an importer of that good.

A tariff ______ the world supply of a good.

Which statement is TRUE?

The United States is not competitive with Brazil in sugar production partly because:

Trade makes people better off through specialization.

Use the following to answer questions Figure: Foreign Trade 2 -(Figure: Foreign Trade 2)Refer to the figure.What is the dollar value of the producer surplus gained as a result of prohibiting trade in this market?

As GDP per capita increases,child labor tends to

When the world price is below the domestic price,the elimination of a tariff decreases domestic production and provides a benefit because:

If,at a world price of $200,domestic consumers buy 900 units and domestic producers sell 600 units,imports equal 1,500.

One of the costs of protectionism is:

If the U.S.government wanted to use strategic trade protectionism for U.S.-produced fertilizer it would:

We pay for our exports with our imports.

Economists consider tariffs to be:

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