Question 1

Which of the following products is a leading import of the United States?

Accepted Answer

A)  Grains 
B)  Aircraft 
C)  Petroleum 
D)  Generating equipment 
A)  Grains 
B)  Aircraft 
C)  Petroleum 
D)  Generating equipment C

Question 2

Whenever a foreign producer is selling a product like steel at a lower price than domestic producers, then dumping is being practiced and must be corrected.

Accepted Answer

A) True 
 B)False  False

Question 3

The imposition of a tariff on a product is least likely to result in a(n):

Accepted Answer

A)  Increase in the efficiency in the domestic industry producing the product 
B)  Increase in the price of the product 
C)  Decrease in the quantity of imports 
D)  Decrease in the real incomes of workers in other industries 
A)  Increase in the efficiency in the domestic industry producing the product 
B)  Increase in the price of the product 
C)  Decrease in the quantity of imports 
D)  Decrease in the real incomes of workers in other industries A

Question 4

Import quotas on products will reduce the quantity of the imported products and:

Accepted Answer

A)  Decrease the price to the consumers 
B)  Increase the price to the consumers 
C)  Will not affect the price to the consumers 
D)  Increase the total quantity of the product consumed 
A)  Decrease the price to the consumers 
B)  Increase the price to the consumers 
C)  Will not affect the price to the consumers 
D)  Increase the total quantity of the product consumed

Question 5

Globalization of resource markets has resulted in the business practice of offshoring, which involves:

Accepted Answer

A)  Only an outflow of jobs away from the U.S. 
B)  No possible expansion of jobs in the U.S. 
C)  Huge losses to consumers in the U.S. 
D)  Both an outflow as well as an inflow of jobs in the U.S. 
A)  Only an outflow of jobs away from the U.S. 
B)  No possible expansion of jobs in the U.S. 
C)  Huge losses to consumers in the U.S. 
D)  Both an outflow as well as an inflow of jobs in the U.S.

Question 6

The World Trade Organization was established by the United States to force other nations to open their markets to U.S. goods.

Accepted Answer

A) True 
 B)False

Question 7

Which is not a commonly heard argument for protectionism?

Accepted Answer

A)  A strong national defense requires that some military products be produced domestically 
B)  Infant industries need short-term protection from foreign competition in order to grow 
C)  Specialization along the lines of comparative advantage can lead to some economic instability in a nation 
D)  When other nations' economies grow they typically import fewer goods and services 
A)  A strong national defense requires that some military products be produced domestically 
B)  Infant industries need short-term protection from foreign competition in order to grow 
C)  Specialization along the lines of comparative advantage can lead to some economic instability in a nation 
D)  When other nations' economies grow they typically import fewer goods and services

Question 8

A trade deficit refers to a situation where:

Accepted Answer

A)  Government spending (including transfer payments) exceeds tax revenues 
B)  A nation's purchases from other nations are less than its sales to other nations 
C)  Assets are less than liabilities 
D)  Exports are less than imports 
A)  Government spending (including transfer payments) exceeds tax revenues 
B)  A nation's purchases from other nations are less than its sales to other nations 
C)  Assets are less than liabilities 
D)  Exports are less than imports

Question 9

Among the principal exports of the United States are agricultural products.

Accepted Answer

A) True 
 B)False

Question 10

Autos and chemicals are in million of units in the following production possibilities tables:   Refer to the tables above. If Germany and the United States engage in trade, the mutually-beneficial terms of trade will be between:

Accepted Answer

A)  3 and 4 units of autos for 1 unit of chemicals 
B)  2 and 4 units of autos for 1 unit of chemicals 
C)  2 and 4 units of chemicals for 1 unit of autos 
D)  0.33 and 0.5 units of autos for 1 unit of chemicals 
A)  3 and 4 units of autos for 1 unit of chemicals 
B)  2 and 4 units of autos for 1 unit of chemicals 
C)  2 and 4 units of chemicals for 1 unit of autos 
D)  0.33 and 0.5 units of autos for 1 unit of chemicals

Question 11

In a two-nation two-good world, it is possible for one nation to have the comparative advantage in both goods.

Accepted Answer

A) True 
 B)False

Question 12

The world price for a traded product will be between the domestic no-trade prices of the trading nations.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the graph above, where Sd and Dd are the domestic supply and demand curves for a product. The world price of the product is $6. If the market is open to international trade but there is a tariff of $2 per unit imposed, the total government revenue generated by the tariff would be:

Accepted Answer

A)  $40 
B)  $60 
C)  $80 
D)  $100 
A)  $40 
B)  $60 
C)  $80 
D)  $100

Question 14

A nation will import a particular product if the world price is less than the domestic price.

Accepted Answer

A) True 
 B)False

Question 15

Refer to the table above for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit imported is imposed, then the quantity of output that would be supplied domestically would be:

Accepted Answer

A)  1,400 units, and the quantity of output that would be imported would be 800 units 
B)  1,600 units, and the quantity of output that would be imported would be 800 units 
C)  1,600 units, and the quantity of output that would be imported would be 400 units 
D)  1,400 units, and the quantity of output that would be imported would be 400 units 
A)  1,400 units, and the quantity of output that would be imported would be 800 units 
B)  1,600 units, and the quantity of output that would be imported would be 800 units 
C)  1,600 units, and the quantity of output that would be imported would be 400 units 
D)  1,400 units, and the quantity of output that would be imported would be 400 units

Question 16

Refer to the graph above which shows the import demand and export supply curves for two nations that produce a certain product. In this two-nation model, the equilibrium world price and quantity will be:

Accepted Answer

A)  A and Q2 
B)  B and Q4 
C)  C and Q2 
D)  D and Q4 
A)  A and Q2 
B)  B and Q4 
C)  C and Q2 
D)  D and Q4

Question 17

Which of the following statements best describes a protective tariff?

Accepted Answer

A)  An excise tax that is usually applied to products which are not produced domestically in order to raise revenues for government 
B)  An excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets 
C)  A specification of the maximum amount of a product that may be imported in any period of time which is often used to protect domestic producers of a product 
D)  Such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protect domestic markets 
A)  An excise tax that is usually applied to products which are not produced domestically in order to raise revenues for government 
B)  An excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets 
C)  A specification of the maximum amount of a product that may be imported in any period of time which is often used to protect domestic producers of a product 
D)  Such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protect domestic markets

Question 18

The graph above shows the production possibilities curves for two hypothetical nations, Orin and Pohl, which each make two hypothetical products, jaxs and keps. Which of the following statements is correct?

Accepted Answer

A)  Orin has a comparative advantage in both jaxs and keps 
B)  Pohl has a comparative advantage in jaxs 
C)  The opportunity cost of making jaxs is lower in Orin than in Pohl 
D)  Orin is more efficient than Pohl 
A)  Orin has a comparative advantage in both jaxs and keps 
B)  Pohl has a comparative advantage in jaxs 
C)  The opportunity cost of making jaxs is lower in Orin than in Pohl 
D)  Orin is more efficient than Pohl

Question 19

Refer to the table above for a certain product's market in Econland. If the world price for this product were $6, then Econland would import:

Accepted Answer

A)  400 units and domestic producers would supply 1,400 
B)  800 units and domestic producers would supply 1,400 
C)  800 units and domestic producers would supply 2,200 
D)  400 units and domestic producers would supply 2,200 
A)  400 units and domestic producers would supply 1,400 
B)  800 units and domestic producers would supply 1,400 
C)  800 units and domestic producers would supply 2,200 
D)  400 units and domestic producers would supply 2,200

Question 20

If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that:

Accepted Answer

A)  Nation A has the absolute advantage over Nation B in producing cloth 
B)  Nation B has the absolute advantage over Nation A in producing cloth 
C)  Nation A has the comparative advantage over Nation B in producing cloth 
D)  Nation B has the comparative advantage over Nation A in producing cloth 
A)  Nation A has the absolute advantage over Nation B in producing cloth 
B)  Nation B has the absolute advantage over Nation A in producing cloth 
C)  Nation A has the comparative advantage over Nation B in producing cloth 
D)  Nation B has the comparative advantage over Nation A in producing cloth

Exam 20: International Trade

Which of the following products is a leading import of the United States?

Whenever a foreign producer is selling a product like steel at a lower price than domestic producers, then dumping is being practiced and must be corrected.

The imposition of a tariff on a product is least likely to result in a(n):

Import quotas on products will reduce the quantity of the imported products and:

Globalization of resource markets has resulted in the business practice of offshoring, which involves:

The World Trade Organization was established by the United States to force other nations to open their markets to U.S. goods.

Which is not a commonly heard argument for protectionism?

A trade deficit refers to a situation where:

Among the principal exports of the United States are agricultural products.

Autos and chemicals are in million of units in the following production possibilities tables: Refer to the tables above. If Germany and the United States engage in trade, the mutually-beneficial terms of trade will be between:

In a two-nation two-good world, it is possible for one nation to have the comparative advantage in both goods.

The world price for a traded product will be between the domestic no-trade prices of the trading nations.

Refer to the graph above, where Sd and Dd are the domestic supply and demand curves for a product. The world price of the product is $6. If the market is open to international trade but there is a tariff of $2 per unit imposed, the total government revenue generated by the tariff would be:

A nation will import a particular product if the world price is less than the domestic price.

Refer to the table above for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit imported is imposed, then the quantity of output that would be supplied domestically would be:

Refer to the graph above which shows the import demand and export supply curves for two nations that produce a certain product. In this two-nation model, the equilibrium world price and quantity will be:

Which of the following statements best describes a protective tariff?

The graph above shows the production possibilities curves for two hypothetical nations, Orin and Pohl, which each make two hypothetical products, jaxs and keps. Which of the following statements is correct?

Refer to the table above for a certain product's market in Econland. If the world price for this product were $6, then Econland would import:

If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

Refer to the graph above, where S_d and D_d are the domestic supply and demand curves for a product. The world price of the product is $6. If the market is open to international trade but there is a tariff of $2 per unit imposed, the total government revenue generated by the tariff would be: