Exam 20: International Trade

Refer to the graph above which shows the import demand and export supply curves for two nations that produce a certain product. The import demand curves for the two nations are represented by lines:

"The nation needs to prevent foreign nations from selling their excess goods in our nation at a price below cost so we can save American firms." This quotation would be most closely associated with which protectionist argument?

Refer to the graph above which shows the import demand and export supply curves for two nations that produce a certain product. Lines 6 and 8 apply to one nation and represent, respectively:

Which of the following is a valid counter-argument to the call for higher tariffs to save U.S. jobs?

In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce:

The principle of comparative advantage indicates that mutually beneficial international trade can take place only when:

One major factor that serves as an economic basis for world trade is the uneven distribution of resources among nations.

The table below shows labor-productivity figures in two countries facing constant costs: Refer to the table above. Based on the data provided, it can be deduced that:

A major goal of the World Trade Organization is to:

The benefits to trading nations based on comparative advantage accrue from:

Major achievements of the European Union (EU) include the following, except:

Assume that a VER (voluntary export restraint) is imposed on an imported product. The difference between the domestic price and the world price is captured by:

Tariffs and quotas are costly to consumers because:

The production possibilities for country X are either 6,000 bushels of soybeans or 10,000 bushels of wheat. The production possibilities for country Y are either 2,000 bushels of soybeans or 4,000 bushels of wheat. Which of the following is true?

The basic difference in the economic effects of a tariff compared with a quota is that a:

Refer to the above table for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the tariff would generate government revenues of:

Export subsidies tend to hurt domestic consumers and benefit the foreign consumers.

Use the following table to answer the question below for Country Y. Column 1 is the price of a product. Column 2 is the quantity demanded domestically (Q_dd) and Column 3 is the quantity supplied domestically (Q_sd). Refer to the table above. At what price will Country Y export 100 units of the product?

Suppose the world economy is composed of just two countries: Italy and Greece. Each can produce steel or chemicals, but at different levels of economic efficiency. The production possibilities curves for the two countries are shown in the graphs below. Refer to the graphs and information above. Assume that prior to specialization and trade, Italy and Greece preferred points I and G on their respective production possibilities curves. As a result of complete specialization according to comparative advantage, the resulting gains in total output will be:

The following are commonly-used arguments for protection against imports, except: