Question 1

Domestic producers of goods that compete with imports benefit from protectionism in the short run.

Accepted Answer

A) True 
 B)False  True

Question 2

Exhibit 17-6  
-In Exhibit 17-6,if the world price of a baseball is $3 and a tariff of $1 per baseball is imposed in the United States,how much tariff revenue will the United States government collect?

Accepted Answer

A) $4,000 
B) $16,000 
C) $20,000 
D) $24,000 
E) $48,000 
A) $4,000 
B) $16,000 
C) $20,000 
D) $24,000 
E) $48,000 A

Question 3

Exhibit 17-8  
-If the country in Exhibit 17-8 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,

Accepted Answer

A) imports will not change 
B) imports will increase from 25 to 50 units per month 
C) domestic production will increase from 100 to 175 units per month 
D) domestic production will increase from 100 to 125 units per month 
E) domestic production will increase from 100 to 150 units per month 
A) imports will not change 
B) imports will increase from 25 to 50 units per month 
C) domestic production will increase from 100 to 175 units per month 
D) domestic production will increase from 100 to 125 units per month 
E) domestic production will increase from 100 to 150 units per month D

Question 4

Exhibit 17-9  
-If the country in Exhibit 17-9 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,the gain to those awarded the right to import the 50 units and sell it at the new domestic price is represented by area

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) c + d 
A) a 
B) b 
C) c 
D) d 
E) c + d

Question 5

Exhibit 17-5  
-At a world price of $1.00 in Exhibit 17-5,

Accepted Answer

A) 20 units will be exported 
B) 20 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported 
A) 20 units will be exported 
B) 20 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported

Question 6

International trade equalizes the opportunity cost of producing any good around the world.

Accepted Answer

A) True 
 B)False

Question 7

As a result of international trade,

Accepted Answer

A) the gain to producers in the importing country exceeds the loss to consumers in the importing country 
B) the loss to producers in the importing country is less than the gain to consumers in the importing country caused by a decrease in price 
C) the loss to producers in the importing country exceeds the gain to consumers in the importing country caused by an increase in price 
D) the loss to producers in the importing country is equal to the gain to consumers in the importing country because price increases and equilibrium quantity decreases 
E) the loss to producers in the importing country is equal to the gain to consumers in the importing country because price decreases and equilibrium quantity increases 
A) the gain to producers in the importing country exceeds the loss to consumers in the importing country 
B) the loss to producers in the importing country is less than the gain to consumers in the importing country caused by a decrease in price 
C) the loss to producers in the importing country exceeds the gain to consumers in the importing country caused by an increase in price 
D) the loss to producers in the importing country is equal to the gain to consumers in the importing country because price increases and equilibrium quantity decreases 
E) the loss to producers in the importing country is equal to the gain to consumers in the importing country because price decreases and equilibrium quantity increases

Question 8

Exhibit 17-9  
-If the country in Exhibit 17-9 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,the decrease in consumer surplus can be represented by area

Accepted Answer

A) a 
B) c + d 
C) c + d + e 
D) b + c + d + e 
E) a + b + c + d + e 
A) a 
B) c + d 
C) c + d + e 
D) b + c + d + e 
E) a + b + c + d + e

Question 9

Which of the following is not a type of trade restriction?

Accepted Answer

A) low-interest loans to foreign buyers 
B) export subsidies to domestic producers 
C) restrictive health and safety standards 
D) domestic content requirements 
E) economies of scale 
A) low-interest loans to foreign buyers 
B) export subsidies to domestic producers 
C) restrictive health and safety standards 
D) domestic content requirements 
E) economies of scale

Question 10

To maximize worldwide gains from trade,the country that should produce a good is the country that

Accepted Answer

A) has the lowest opportunity cost of producing it 
B) can produce that good using the fewest resources 
C) will produce that good using the most expensive resources 
D) has the most desire for that good 
E) has produced that good in the past 
A) has the lowest opportunity cost of producing it 
B) can produce that good using the fewest resources 
C) will produce that good using the most expensive resources 
D) has the most desire for that good 
E) has produced that good in the past

Question 11

An import quota is a

Accepted Answer

A) tax on imports 
B) legal limit on the amount of a specific good that can be imported into a particular country 
C) tax on import quantities above the legal limit 
D) way to increase tariff revenues 
E) legal incentive for members of GATT to increase their exports of a particular good 
A) tax on imports 
B) legal limit on the amount of a specific good that can be imported into a particular country 
C) tax on import quantities above the legal limit 
D) way to increase tariff revenues 
E) legal incentive for members of GATT to increase their exports of a particular good

Question 12

An effective import quota is one that

Accepted Answer

A) reduces imports to zero 
B) increases exports 
C) reduces the price of an imported good below the world price 
D) limits imports to less than what would be imported under free trade 
E) reduces demand for a good to zero 
A) reduces imports to zero 
B) increases exports 
C) reduces the price of an imported good below the world price 
D) limits imports to less than what would be imported under free trade 
E) reduces demand for a good to zero

Question 13

An effective import quota is one that increases the amount of tariff revenues received.

Accepted Answer

A) True 
 B)False

Question 14

Low wages may be traceable to all of the following except one.Which is the exception?

Accepted Answer

A) low productivity 
B) too much saving 
C) unstable business climate 
D) poor education and training 
E) lack of adequate physical capital supplied to labor 
A) low productivity 
B) too much saving 
C) unstable business climate 
D) poor education and training 
E) lack of adequate physical capital supplied to labor

Question 15

U.S.exports

Accepted Answer

A) represent approximately 50 percent of GDP 
B) represent approximately 35 percent of GDP 
C) represent approximately 11 percent of GDP 
D) consist primarily of agricultural commodities 
E) consist primarily of metals and other raw materials 
A) represent approximately 50 percent of GDP 
B) represent approximately 35 percent of GDP 
C) represent approximately 11 percent of GDP 
D) consist primarily of agricultural commodities 
E) consist primarily of metals and other raw materials

Question 16

Which country is the United States' largest trading partner?

Accepted Answer

A) Canada 
B) Japan 
C) Great Britain 
D) Mexico 
E) South Korea 
A) Canada 
B) Japan 
C) Great Britain 
D) Mexico 
E) South Korea

Question 17

One way to reduce pressure for Mexicans to cross the U.S.border illegally is to create job opportunities in Mexico.

Accepted Answer

A) True 
 B)False

Question 18

A tariff is

Accepted Answer

A) a tax on financial transactions 
B) a tax on either imports or exports 
C) the result of a treaty 
D) a penalty imposed on importers of capital 
E) an agreement between countries to limit trade 
A) a tax on financial transactions 
B) a tax on either imports or exports 
C) the result of a treaty 
D) a penalty imposed on importers of capital 
E) an agreement between countries to limit trade

Question 19

A major U.S.motive for negotiating a free-trade agreement with Mexico was to

Accepted Answer

A) help foster the study of the Spanish language as a means to trading with all Spanish-speaking countries 
B) increase immigration into the United States 
C) gain increased access to Mexican consumers 
D) keep Mexico from going Communist 
E) achieve,ultimately,political union with Mexico 
A) help foster the study of the Spanish language as a means to trading with all Spanish-speaking countries 
B) increase immigration into the United States 
C) gain increased access to Mexican consumers 
D) keep Mexico from going Communist 
E) achieve,ultimately,political union with Mexico

Question 20

World output will be maximized if each country

Accepted Answer

A) attempts to be self-sufficient 
B) specializes in producing those goods in which it has a comparative advantage 
C) specializes in producing those goods in which it has an absolute advantage 
D) reduces its consumption possibilities 
E) specializes in producing those goods for which it has the lowest demand 
A) attempts to be self-sufficient 
B) specializes in producing those goods in which it has a comparative advantage 
C) specializes in producing those goods in which it has an absolute advantage 
D) reduces its consumption possibilities 
E) specializes in producing those goods for which it has the lowest demand

Exam 18: International Trade

Domestic producers of goods that compete with imports benefit from protectionism in the short run.

Exhibit 17-6 -In Exhibit 17-6,if the world price of a baseball is $3 and a tariff of $1 per baseball is imposed in the United States,how much tariff revenue will the United States government collect?

Exhibit 17-8 -If the country in Exhibit 17-8 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,

Exhibit 17-9 -If the country in Exhibit 17-9 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,the gain to those awarded the right to import the 50 units and sell it at the new domestic price is represented by area

Exhibit 17-5 -At a world price of $1.00 in Exhibit 17-5,

International trade equalizes the opportunity cost of producing any good around the world.

As a result of international trade,

Exhibit 17-9 -If the country in Exhibit 17-9 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,the decrease in consumer surplus can be represented by area

Which of the following is not a type of trade restriction?

To maximize worldwide gains from trade,the country that should produce a good is the country that

An import quota is a

An effective import quota is one that

An effective import quota is one that increases the amount of tariff revenues received.

Low wages may be traceable to all of the following except one.Which is the exception?

U.S.exports

Which country is the United States' largest trading partner?

One way to reduce pressure for Mexicans to cross the U.S.border illegally is to create job opportunities in Mexico.

A tariff is

A major U.S.motive for negotiating a free-trade agreement with Mexico was to

World output will be maximized if each country

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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