Question 1

Some nations that seek to produce all of their own needs face the problem that

Accepted Answer

A) ​they can deplete their natural resources faster as a result. 
B) ​some industries are too small to be efficient if restricted to their domestic markets alone. 
C) ​the opportunity cost of producing some of their own goods is higher than that of trading with others for them. 
D) ​all of the above are true. 
A) ​they can deplete their natural resources faster as a result. 
B) ​some industries are too small to be efficient if restricted to their domestic markets alone. 
C) ​the opportunity cost of producing some of their own goods is higher than that of trading with others for them. 
D) ​all of the above are true.

Question 2

Mutually beneficial trade will occur whenever the exchange rate between the goods involved is set at a level where:

Accepted Answer

A) ​each country can export a good at a price below the opportunity cost of producing the good in the domestic market. 
B) ​each country can import a good at a price below the opportunity cost of producing the good in the domestic market. 
C) ​the exchange ratio is exactly equal to the opportunity cost of producing the good in each country. 
D) ​each country will specialize in the production of those goods in which it has an absolute advantage. 
A) ​each country can export a good at a price below the opportunity cost of producing the good in the domestic market. 
B) ​each country can import a good at a price below the opportunity cost of producing the good in the domestic market. 
C) ​the exchange ratio is exactly equal to the opportunity cost of producing the good in each country. 
D) ​each country will specialize in the production of those goods in which it has an absolute advantage.

Question 3

After the United States introduces a tariff in the market for widgets, the price of widgets in the United States will:

Accepted Answer

A) ​decrease. 
B) ​increase. 
C) ​remain the same. 
D) ​change in an indeterminate manner. 
A) ​decrease. 
B) ​increase. 
C) ​remain the same. 
D) ​change in an indeterminate manner.

Question 4

Tariffs contribute to higher prices of textile products imported into the United States, but import quotas on textiles brought into the United States do not.

Accepted Answer

A) True 
 B)False

Question 5

What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?

Accepted Answer

A tariff raises the domestic price of th

Question 6

Assume that Germany can produce 10 million bottles of beer or 4 million bottles of vodka. Further assume that Russia can produce 7 million bottles of beer or 3 million bottles of vodka. As a result, which of the following is true with regard to absolute and comparative advantage?

Accepted Answer

A) ​Germany has the absolute advantage in beer and the comparative advantage in beer. 
B) ​Germany has the absolute advantage in beer and the comparative advantage in vodka. 
C) ​Russia has the absolute advantage in beer and the comparative advantage in beer. 
D) ​Russia has the absolute advantage in beer and the comparative advantage in vodka. 
A) ​Germany has the absolute advantage in beer and the comparative advantage in beer. 
B) ​Germany has the absolute advantage in beer and the comparative advantage in vodka. 
C) ​Russia has the absolute advantage in beer and the comparative advantage in beer. 
D) ​Russia has the absolute advantage in beer and the comparative advantage in vodka.

Question 7

One difference between a tariff and a quota is that the tariff brings in revenue to
the government while the quota benefits the foreign producer who is lucky enough to receive an import license.

Accepted Answer

A) True 
 B)False

Question 8

A new U.S. tariff on imported steel would be likely to:

Accepted Answer

A) ​raise the cost of production to steel-using American firms. 
B) ​generate tax revenue to the government. 
C) ​increase U.S.production of steel. 
D) ​all of the above 
A) ​raise the cost of production to steel-using American firms. 
B) ​generate tax revenue to the government. 
C) ​increase U.S.production of steel. 
D) ​all of the above

Question 9

A country has an absolute advantage over another if it can produce a good with fewer resources.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following arguments in favor of trade restrictions is of questionable validity?

Accepted Answer

A) ​total domestic employment 
B) ​national security 
C) ​infant industries 
D) ​all of the above 
A) ​total domestic employment 
B) ​national security 
C) ​infant industries 
D) ​all of the above

Question 11

Which of the following observations is true of subsidies?

Accepted Answer

A) ​They act as barriers to trade. 
B) ​They reduce the amounts of actual labor, raw material, and capital costs of production. 
C) ​They are capable of distorting trade patterns. 
D) ​They reduce inefficiencies. 
A) ​They act as barriers to trade. 
B) ​They reduce the amounts of actual labor, raw material, and capital costs of production. 
C) ​They are capable of distorting trade patterns. 
D) ​They reduce inefficiencies.

Question 12

Suppose that in the absence of trade, the U.S. price for bicycles was higher than the world price for bicycles. Would allowing international trade, mean that the U.S. would import or export bicycles? Who in the U.S. would benefit and who would lose with a free trade policy, and would the gains be greater than the losses?

Accepted Answer

The U.S. would import bicycles, as consu

Question 13

The difference between the price the consumer is willing to pay for a good or service and what he would have to pay for that unit is called:

Accepted Answer

A) ​the total gains from trading that unit. 
B) ​the gain in producer surplus. 
C) ​the gain in consumer surplus. 
D) ​the total surplus. 
A) ​the total gains from trading that unit. 
B) ​the gain in producer surplus. 
C) ​the gain in consumer surplus. 
D) ​the total surplus.

Question 14

Compared to the no-trade situation, when a country imports a good:

Accepted Answer

A) ​domestic consumers gain, domestic producers lose, and the gains outweigh the losses. 
B) ​domestic consumers lose, domestic producers gain, and the gains outweigh the losses. 
C) ​domestic consumers gain, domestic producers lose, and the losses outweigh the gains. 
D) ​domestic consumers gain, domestic producers lose an equal amount. 
A) ​domestic consumers gain, domestic producers lose, and the gains outweigh the losses. 
B) ​domestic consumers lose, domestic producers gain, and the gains outweigh the losses. 
C) ​domestic consumers gain, domestic producers lose, and the losses outweigh the gains. 
D) ​domestic consumers gain, domestic producers lose an equal amount.

Question 15

After the U.S. introduces of a tariff in the market for phones, the price of phones in the U.S. will

Accepted Answer

A) ​decrease 
B) ​increase 
C) ​remain the same 
D) ​change in an indeterminate manner 
A) ​decrease 
B) ​increase 
C) ​remain the same 
D) ​change in an indeterminate manner

Question 16

In the mid 1990s countries of the world exported $6.5 trillion dollars worth of goods and services. How large were total world imports of goods and services during this period? Explain your answer.

Accepted Answer

For the world as a whole, imports have t

Question 17

​Exhibit 18-6
​  
-Refer to Exhibit 18-6. After the tariff domestic producers gain area:

Accepted Answer

A) ​C + G 
B) ​C + A 
C) ​C 
D) ​B 
A) ​C + G 
B) ​C + A 
C) ​C 
D) ​B

Question 18

What are the commonly used arguments for the use of tariffs?

Accepted Answer

Arguments for the use of tariffs include

Question 19

Introducing a tariff on vitamin E would:

Accepted Answer

A) ​reduce imports of vitamin E. 
B) ​increase U.S.consumption of domestically produced vitamin E. 
C) ​decrease total U.S.consumption of vitamin E. 
D) ​all of the above. 
A) ​reduce imports of vitamin E. 
B) ​increase U.S.consumption of domestically produced vitamin E. 
C) ​decrease total U.S.consumption of vitamin E. 
D) ​all of the above.

Question 20

Iceland can produce 32 units of food per person per year or 8 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?

Accepted Answer

A) ​Iceland has both a comparative and absolute advantage in producing food. 
B) ​Iceland has a comparative advantage, but not an absolute advantage in producing food. 
C) ​Lavaland has both a comparative and absolute advantage in producing clothing. 
D) ​Lavaland has both a comparative and absolute advantage in producing food. 
A) ​Iceland has both a comparative and absolute advantage in producing food. 
B) ​Iceland has a comparative advantage, but not an absolute advantage in producing food. 
C) ​Lavaland has both a comparative and absolute advantage in producing clothing. 
D) ​Lavaland has both a comparative and absolute advantage in producing food.

Some nations that seek to produce all of their own needs face the problem that

Mutually beneficial trade will occur whenever the exchange rate between the goods involved is set at a level where:

After the United States introduces a tariff in the market for widgets, the price of widgets in the United States will:

Tariffs contribute to higher prices of textile products imported into the United States, but import quotas on textiles brought into the United States do not.

What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?

Assume that Germany can produce 10 million bottles of beer or 4 million bottles of vodka. Further assume that Russia can produce 7 million bottles of beer or 3 million bottles of vodka. As a result, which of the following is true with regard to absolute and comparative advantage?

One difference between a tariff and a quota is that the tariff brings in revenue to the government while the quota benefits the foreign producer who is lucky enough to receive an import license.

A new U.S. tariff on imported steel would be likely to:

A country has an absolute advantage over another if it can produce a good with fewer resources.

Which of the following arguments in favor of trade restrictions is of questionable validity?

Which of the following observations is true of subsidies?

The difference between the price the consumer is willing to pay for a good or service and what he would have to pay for that unit is called:

Compared to the no-trade situation, when a country imports a good:

After the U.S. introduces of a tariff in the market for phones, the price of phones in the U.S. will

In the mid 1990s countries of the world exported $6.5 trillion dollars worth of goods and services. How large were total world imports of goods and services during this period? Explain your answer.

Exhibit 18-6 -Refer to Exhibit 18-6. After the tariff domestic producers gain area:

What are the commonly used arguments for the use of tariffs?

Introducing a tariff on vitamin E would:

Iceland can produce 32 units of food per person per year or 8 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Financial Markets, Saving, and Investment

Filters

Exam 20: Economic Growth in the Global Economy

Some nations that seek to produce all of their own needs face the problem that

Mutually beneficial trade will occur whenever the exchange rate between the goods involved is set at a level where:

After the United States introduces a tariff in the market for widgets, the price of widgets in the United States will:

Tariffs contribute to higher prices of textile products imported into the United States, but import quotas on textiles brought into the United States do not.

What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?

Assume that Germany can produce 10 million bottles of beer or 4 million bottles of vodka. Further assume that Russia can produce 7 million bottles of beer or 3 million bottles of vodka. As a result, which of the following is true with regard to absolute and comparative advantage?

One difference between a tariff and a quota is that the tariff brings in revenue to the government while the quota benefits the foreign producer who is lucky enough to receive an import license.

A new U.S. tariff on imported steel would be likely to:

A country has an absolute advantage over another if it can produce a good with fewer resources.

Which of the following arguments in favor of trade restrictions is of questionable validity?

Which of the following observations is true of subsidies?

The difference between the price the consumer is willing to pay for a good or service and what he would have to pay for that unit is called:

Compared to the no-trade situation, when a country imports a good:

After the U.S. introduces of a tariff in the market for phones, the price of phones in the U.S. will

In the mid 1990s countries of the world exported $6.5 trillion dollars worth of goods and services. How large were total world imports of goods and services during this period? Explain your answer.

​Exhibit 18-6 ​ -Refer to Exhibit 18-6. After the tariff domestic producers gain area:

What are the commonly used arguments for the use of tariffs?

Introducing a tariff on vitamin E would:

Iceland can produce 32 units of food per person per year or 8 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Financial Markets, Saving, and Investment

Filters

Exhibit 18-6 -Refer to Exhibit 18-6. After the tariff domestic producers gain area: