Question 1

From which of the following countries does the U.S. import the largest dollar value of goods?

Accepted Answer

A) ​Canada 
B) ​Mexico 
C) ​Great Britain 
D) ​Japan 
A) ​Canada 
B) ​Mexico 
C) ​Great Britain 
D) ​Japan

Question 2

Assume that the U.S. can produce either 10 million cell phones or 20 million picture frames and that Canada can produce either 2 million cell phones or 6 million picture frames. Based on this information, which of the following is true?

Accepted Answer

A) ​Both countries could benefit if the U.S.traded cell phones to Canada for picture frames. 
B) ​Both countries could benefit if the U.S.traded picture frames to Canada for cell phones. 
C) ​Canada could gain from trade but the U.S.could not. 
D) ​The U.S.could gain from trade but Canada could not. 
A) ​Both countries could benefit if the U.S.traded cell phones to Canada for picture frames. 
B) ​Both countries could benefit if the U.S.traded picture frames to Canada for cell phones. 
C) ​Canada could gain from trade but the U.S.could not. 
D) ​The U.S.could gain from trade but Canada could not.

Question 3

The change in the total gain to a nation from international trade is the:

Accepted Answer

A) ​producer surplus. 
B) ​consumer surplus. 
C) ​excess of producer surplus over consumer surplus. 
D) ​sum of consumer and producer surpluses. 
A) ​producer surplus. 
B) ​consumer surplus. 
C) ​excess of producer surplus over consumer surplus. 
D) ​sum of consumer and producer surpluses.

Question 4

Which of the following is not a result we would expect to result from a tariff on leather shoes?

Accepted Answer

A) ​The price of leather shoes in the U.S.would increase. 
B) ​The amount of shoes imported into the U.S.would decline. 
C) ​Fewer pairs of shoes would be sold in the U.S. 
D) ​Domestic producers would sell fewer shoes at the higher prices. 
A) ​The price of leather shoes in the U.S.would increase. 
B) ​The amount of shoes imported into the U.S.would decline. 
C) ​Fewer pairs of shoes would be sold in the U.S. 
D) ​Domestic producers would sell fewer shoes at the higher prices.

Question 5

Trade occurs when a country has an absolute advantage and not just a comparative advantage over another country.

Accepted Answer

A) True 
 B)False

Question 6

How do subsidies distort trade patterns and lead to inefficiencies?

Accepted Answer

With subsidies, producers will export go

Question 7

Which of the following is not a major trading partner of the U.S.?

Accepted Answer

A) ​Canada 
B) ​Mexico 
C) ​Russia 
D) ​China 
A) ​Canada 
B) ​Mexico 
C) ​Russia 
D) ​China

Question 8

A reduction in the tariff on imported steel would most likely benefit

Accepted Answer

A) ​workers in the steel industry. 
B) ​the domestic consumers of steel. 
C) ​the domestic producers of steel. 
D) ​foreign producers at the expense of domestic consumers. 
A) ​workers in the steel industry. 
B) ​the domestic consumers of steel. 
C) ​the domestic producers of steel. 
D) ​foreign producers at the expense of domestic consumers.

Question 9

A nation can gain from international trade when the relative domestic prices of the nation differs from that in other countries, and it imports goods for which it is a high opportunity cost producer.

Accepted Answer

A) True 
 B)False

Question 10

Suppose that the U.S. can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude

Accepted Answer

A) ​the U.S.has a comparative advantage in the production of cars. 
B) ​France has a comparative advantage in the production of wine. 
C) ​the U.S.has a absolute advantage in the production of wine. 
D) ​all of the above are conclusions are correct. 
A) ​the U.S.has a comparative advantage in the production of cars. 
B) ​France has a comparative advantage in the production of wine. 
C) ​the U.S.has a absolute advantage in the production of wine. 
D) ​all of the above are conclusions are correct.

Question 11

The central reason why there are gains from international trade is because

Accepted Answer

A) ​trading allows otherwise unemployed people to have jobs. 
B) ​the rate of interest is not the same in all countries. 
C) ​resources are not equally distributed to all nations. 
D) ​those nations with absolute advantages in producing many goods can produce all of those goods at lower opportunity costs than other countries. 
A) ​trading allows otherwise unemployed people to have jobs. 
B) ​the rate of interest is not the same in all countries. 
C) ​resources are not equally distributed to all nations. 
D) ​those nations with absolute advantages in producing many goods can produce all of those goods at lower opportunity costs than other countries.

Question 12

Which of the following is an incorrect observation?

Accepted Answer

A) ​Import tariffs benefit domestic producers and the government, but harms domestic consumers. 
B) ​Gains from trade in terms of world output are reduced by export subsidies. 
C) ​The overall domestic employment effects of a tariff imposition are likely to be positive. 
D) ​If the imposition of a tariff leads to retaliatory tariffs by other countries, domestic employment outside the industry gaining the tariff protection would likely suffer. 
A) ​Import tariffs benefit domestic producers and the government, but harms domestic consumers. 
B) ​Gains from trade in terms of world output are reduced by export subsidies. 
C) ​The overall domestic employment effects of a tariff imposition are likely to be positive. 
D) ​If the imposition of a tariff leads to retaliatory tariffs by other countries, domestic employment outside the industry gaining the tariff protection would likely suffer.

Question 13

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy of reducing or eliminating imports of rice into their country would include:

Accepted Answer

A) ​making the price of rice in Japan rise. 
B) ​making the real incomes of Japanese rice producers rise, but the real incomes of Japanese rice consumers fall. 
C) ​making the real incomes of non-Japanese rice exporting countries lower. 
D) ​all of the above 
A) ​making the price of rice in Japan rise. 
B) ​making the real incomes of Japanese rice producers rise, but the real incomes of Japanese rice consumers fall. 
C) ​making the real incomes of non-Japanese rice exporting countries lower. 
D) ​all of the above

Question 14

If opening up international trade resulted in the U.S. becoming a wheat exporter, relative to the prior no-trade situation, the U.S. domestic price of wheat:

Accepted Answer

A) ​would rise, but domestic output would fall. 
B) ​would decline, but domestic output would rise. 
C) ​would decline, as would domestic output. 
D) ​would rise, as would domestic output. 
A) ​would rise, but domestic output would fall. 
B) ​would decline, but domestic output would rise. 
C) ​would decline, as would domestic output. 
D) ​would rise, as would domestic output.

Question 15

If one nation can produce greater quantities of a good than another nation, it has a(n)

Accepted Answer

A) ​comparative advantage in producing that good. 
B) ​absolute advantage in producing that good. 
C) ​absolute advantage, but a comparative disadvantage in producing that good. 
D) ​comparative advantage, but an absolute disadvantage in producing that good. 
A) ​comparative advantage in producing that good. 
B) ​absolute advantage in producing that good. 
C) ​absolute advantage, but a comparative disadvantage in producing that good. 
D) ​comparative advantage, but an absolute disadvantage in producing that good.

Question 16

Politicians often argue for tariff increases in order to reduce the size of a balance of trade deficit. If tariffs are increased, the long-run effect is most likely to be:

Accepted Answer

A) ​a decrease in both U.S.imports and exports. 
B) ​an increase in both U.S.imports and exports. 
C) ​an decrease in U.S.imports, and an increase in U.S.exports. 
D) ​an increase in U.S.imports, and a decrease in U.S.exports. 
A) ​a decrease in both U.S.imports and exports. 
B) ​an increase in both U.S.imports and exports. 
C) ​an decrease in U.S.imports, and an increase in U.S.exports. 
D) ​an increase in U.S.imports, and a decrease in U.S.exports.

Question 17

Assume that one day's labor in England can produce either 20 units of cloth or 2 units of wine, while in Portugal, one day's labor can produce either 24 units of cloth or 12 units of wine. If England transfers 2 units of labor from wine to cloth and Portugal transfers 1 unit of labor from cloth to wine, the increase in combined output by those two workers will be

Accepted Answer

A) ​16 wine, 8 cloth 
B) ​16 wine, 16 cloth 
C) ​12 wine, 12 cloth 
D) ​8 wine, 16 cloth 
A) ​16 wine, 8 cloth 
B) ​16 wine, 16 cloth 
C) ​12 wine, 12 cloth 
D) ​8 wine, 16 cloth

Question 18

If two countries each are currently producing two goods, and each begins to specialize in the good in which it has a comparative advantage, what will happen to total world output?

Accepted Answer

A) ​It will increase. 
B) ​It will decrease. 
C) ​It will be unchanged in both countries. 
D) ​It will rise in one country, and fall in the other, but the total is unchanged. 
A) ​It will increase. 
B) ​It will decrease. 
C) ​It will be unchanged in both countries. 
D) ​It will rise in one country, and fall in the other, but the total is unchanged.

Question 19

​Exhibit 18-6
​  
-Refer to Exhibit 18-6. The amount of government revenue from the tariff is equal to area:

Accepted Answer

A) ​D + E + F 
B) ​E 
C) ​B + D + E + F 
D) ​C + D + E + F 
A) ​D + E + F 
B) ​E 
C) ​B + D + E + F 
D) ​C + D + E + F

Question 20

The net loss in welfare from a quota is proportionately larger than for a tariff because:

Accepted Answer

A) ​it does not result in government revenue. 
B) ​the loss in consumer surplus is greater than the gain to producers and the government. 
C) ​it prevents nations from fully realizing their competitive advantage. 
D) ​it brings about higher prices and revenues to domestic producers. 
A) ​it does not result in government revenue. 
B) ​the loss in consumer surplus is greater than the gain to producers and the government. 
C) ​it prevents nations from fully realizing their competitive advantage. 
D) ​it brings about higher prices and revenues to domestic producers.

From which of the following countries does the U.S. import the largest dollar value of goods?

Assume that the U.S. can produce either 10 million cell phones or 20 million picture frames and that Canada can produce either 2 million cell phones or 6 million picture frames. Based on this information, which of the following is true?

The change in the total gain to a nation from international trade is the:

Which of the following is not a result we would expect to result from a tariff on leather shoes?

Trade occurs when a country has an absolute advantage and not just a comparative advantage over another country.

How do subsidies distort trade patterns and lead to inefficiencies?

Which of the following is not a major trading partner of the U.S.?

A reduction in the tariff on imported steel would most likely benefit

A nation can gain from international trade when the relative domestic prices of the nation differs from that in other countries, and it imports goods for which it is a high opportunity cost producer.

Suppose that the U.S. can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude

The central reason why there are gains from international trade is because

Which of the following is an incorrect observation?

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy of reducing or eliminating imports of rice into their country would include:

If opening up international trade resulted in the U.S. becoming a wheat exporter, relative to the prior no-trade situation, the U.S. domestic price of wheat:

If one nation can produce greater quantities of a good than another nation, it has a(n)

Politicians often argue for tariff increases in order to reduce the size of a balance of trade deficit. If tariffs are increased, the long-run effect is most likely to be:

If two countries each are currently producing two goods, and each begins to specialize in the good in which it has a comparative advantage, what will happen to total world output?

Exhibit 18-6 -Refer to Exhibit 18-6. The amount of government revenue from the tariff is equal to area:

The net loss in welfare from a quota is proportionately larger than for a tariff because:

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

From which of the following countries does the U.S. import the largest dollar value of goods?

Assume that the U.S. can produce either 10 million cell phones or 20 million picture frames and that Canada can produce either 2 million cell phones or 6 million picture frames. Based on this information, which of the following is true?

The change in the total gain to a nation from international trade is the:

Which of the following is not a result we would expect to result from a tariff on leather shoes?

Trade occurs when a country has an absolute advantage and not just a comparative advantage over another country.

How do subsidies distort trade patterns and lead to inefficiencies?

Which of the following is not a major trading partner of the U.S.?

A reduction in the tariff on imported steel would most likely benefit

A nation can gain from international trade when the relative domestic prices of the nation differs from that in other countries, and it imports goods for which it is a high opportunity cost producer.

Suppose that the U.S. can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude

The central reason why there are gains from international trade is because

Which of the following is an incorrect observation?

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy of reducing or eliminating imports of rice into their country would include:

If opening up international trade resulted in the U.S. becoming a wheat exporter, relative to the prior no-trade situation, the U.S. domestic price of wheat:

If one nation can produce greater quantities of a good than another nation, it has a(n)

Politicians often argue for tariff increases in order to reduce the size of a balance of trade deficit. If tariffs are increased, the long-run effect is most likely to be:

If two countries each are currently producing two goods, and each begins to specialize in the good in which it has a comparative advantage, what will happen to total world output?

​Exhibit 18-6 ​ -Refer to Exhibit 18-6. The amount of government revenue from the tariff is equal to area:

The net loss in welfare from a quota is proportionately larger than for a tariff because:

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. The amount of government revenue from the tariff is equal to area: