Question 1

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

Accepted Answer

A) they do not want to offend their employers who want them. 
B) politicians lobby to convince workers the restrictions will make them better off. 
C) they believe the restrictions will protect their jobs. 
D) they don't understand that the restrictions will threaten their jobs. 
A) they do not want to offend their employers who want them. 
B) politicians lobby to convince workers the restrictions will make them better off. 
C) they believe the restrictions will protect their jobs. 
D) they don't understand that the restrictions will threaten their jobs.

Question 2

If currency speculators decide that the value of the dollar should rise in the future relative to the yen,this will increase the demand for dollars and decrease the supply of dollars.

Accepted Answer

A) True 
 B)False

Question 3

The "Buy American" provision in the 2009 stimulus package would require that stimulus money be spent only on U.S.-made goods.In the market for steel,the "Buy American" provision would ________ the price of steel in the United States and ________ the quantity of steel demanded in the United States.

Accepted Answer

A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease 
A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease

Question 4

If the exchange rate between the Mexican peso and the U.S.dollar expressed in terms of pesos per dollar is 13.5 pesos = 1 dollar,what is the exchange rate when expresses in terms of dollars per peso?

Accepted Answer

If 13.5 pesos = 1 do

Question 5

The World Trade Organization (WTO)promotes foreign trade and investment,or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.One reason for these anti-globalization protests is

Accepted Answer

A) foreign trade and investment are examples of zero-sum games. 
B) protesters believe that globalization will result in a return to communism in developing countries. 
C) protesters believe that free trade destroys the distinctive cultures of many countries. 
D) protesters object to the loss of intellectual property (such as software programs and movies)that results from foreign trade and investment. 
A) foreign trade and investment are examples of zero-sum games. 
B) protesters believe that globalization will result in a return to communism in developing countries. 
C) protesters believe that free trade destroys the distinctive cultures of many countries. 
D) protesters object to the loss of intellectual property (such as software programs and movies)that results from foreign trade and investment.

Question 6

Currency traders expect the dollar to appreciate.What impact will this have on equilibrium in the foreign exchange market?

Accepted Answer

A) The dollar will appreciate,and the equilibrium quantity of dollars will decrease. 
B) The dollar will depreciate,and the equilibrium quantity of dollars exchanged will decrease. 
C) The dollar will appreciate,and the equilibrium quantity of dollars will increase. 
D) The dollar will appreciate,and the change in the equilibrium quantity of dollars exchanged cannot be determined. 
A) The dollar will appreciate,and the equilibrium quantity of dollars will decrease. 
B) The dollar will depreciate,and the equilibrium quantity of dollars exchanged will decrease. 
C) The dollar will appreciate,and the equilibrium quantity of dollars will increase. 
D) The dollar will appreciate,and the change in the equilibrium quantity of dollars exchanged cannot be determined.

Question 7

Figure 19-5   Bragabong currently both produces and imports almonds.The government of Bragabong decides to restrict international trade in almonds by imposing a quota that allows imports of only 10 million kilos each year.Figure 19-5 shows the estimated demand and supply curves for almonds in Bragabong and the results of imposing the quota.
-Use Figure 19-5 to answer questions a-j .
a.If there is no quota what is the domestic price of almonds and what is the quantity of almonds demanded by consumers?
b.If there is no quota how many kilos of almonds would domestic producers supply and what quantity would be imported?
c.If there is no quota what is the dollar value of consumer surplus?
d.If there is no quota what is the dollar value of producer surplus received by producers in Bragabong?
e.If there is no quota what is the revenue received by foreign producers who supply almonds to Bragabong?
f.With a quota in place what is the price that consumers of Bragabong must now pay and what is the quantity demanded?
g.With a quota in place what is the dollar value of consumer surplus? Are consumers better off?
h.With a quota in place what is the dollar value of producer surplus received by producers in Bragabong? Are domestic producers better off?
i.Calculate the revenue to foreign producers who are granted permission to sell in Bragabong after the imposition of the quota.
j.Calculate the deadweight loss as a result of the quota.

Accepted Answer

a.Price without a quota = $3 per kilo;qu

Question 8

How will contractionary monetary policy in Japan affect the demand and supply of the yen in the foreign exchange market?

Accepted Answer

A) The demand for the yen will fall,and the supply of the yen will increase. 
B) The demand for the yen will increase,and the supply of the yen will fall. 
C) The demand for the yen will fall,and the supply of the yen will fall. 
D) The demand for the yen will increase,and the supply of the yen will increase. 
A) The demand for the yen will fall,and the supply of the yen will increase. 
B) The demand for the yen will increase,and the supply of the yen will fall. 
C) The demand for the yen will fall,and the supply of the yen will fall. 
D) The demand for the yen will increase,and the supply of the yen will increase.

Question 9

Exports are domestically produced goods and services

Accepted Answer

A) sold to other countries. 
B) sold to the government. 
C) sold at home. 
D) which are used to produce other goods and services. 
A) sold to other countries. 
B) sold to the government. 
C) sold at home. 
D) which are used to produce other goods and services.

Question 10

Table 19-2
Output Per Hour of Work
   Table 19-2 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand.
-Refer to Table 19-2.Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand.

Accepted Answer

The answer of Table 19-2
Output Per Hour of Work
 ...

Question 11

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Accepted Answer

A) Absolute advantage 
B) Specialization 
C) Autarky 
D) Comparative advantage 
A) Absolute advantage 
B) Specialization 
C) Autarky 
D) Comparative advantage

Question 12

Caterpillar's sales were severely affected by the decline in the U.S.housing market that began in 2006.Sales in the United States declined by ________ between 2006 and 2008,and export sales ________ during the same time period.

Accepted Answer

A) more than half;increased by enough to make 2008 a record sales year 
B) almost 90 percent;remained virtually unchanged 
C) almost 90 percent;declined by half 
D) more than half;declined by a similar percentage 
A) more than half;increased by enough to make 2008 a record sales year 
B) almost 90 percent;remained virtually unchanged 
C) almost 90 percent;declined by half 
D) more than half;declined by a similar percentage

Question 13

Currency traders expect the value of the dollar to fall.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

Accepted Answer

A) Demand for dollars will increase,and supply of dollars will decrease. 
B) Demand for dollars will increase,and supply of dollars will increase. 
C) Demand for dollars will decrease,and supply of dollars will increase. 
D) Demand for dollars will decrease,and supply of dollars will decrease. 
A) Demand for dollars will increase,and supply of dollars will decrease. 
B) Demand for dollars will increase,and supply of dollars will increase. 
C) Demand for dollars will decrease,and supply of dollars will increase. 
D) Demand for dollars will decrease,and supply of dollars will decrease.

Question 14

In 2010,________ of Caterpillar's sales were outside the United States.

Accepted Answer

A) only 12 percent 
B) more than two-thirds 
C) less than half 
D) 95 percent 
A) only 12 percent 
B) more than two-thirds 
C) less than half 
D) 95 percent

Question 15

Table 19-1
   Linda and Sandy own The Preppy Puppy,a dog grooming business.Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week.
-Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Linda has a comparative advantage in dog bathing. 
B) Sandy has an absolute advantage in dog bathing. 
C) Sandy has a comparative advantage in dog bathing. 
D) Linda has a comparative advantage in dog grooming and dog bathing. 
A) Linda has a comparative advantage in dog bathing. 
B) Sandy has an absolute advantage in dog bathing. 
C) Sandy has a comparative advantage in dog bathing. 
D) Linda has a comparative advantage in dog grooming and dog bathing.

Question 16

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Accepted Answer

A) True 
 B)False

Question 17

________ raised average tariff rates by over 50 percent in the United States in 1930.

Accepted Answer

A) The GATT 
B) The WTO 
C) NAFTA 
D) The Smoot-Hawley Tariff 
A) The GATT 
B) The WTO 
C) NAFTA 
D) The Smoot-Hawley Tariff

Question 18

If the exchange rate changes from $2.00 = £1 to $2.01 = £1 then

Accepted Answer

A) the dollar has depreciated. 
B) the dollar has appreciated. 
C) the British pound has depreciated. 
D) the British pound has stayed constant in value. 
A) the dollar has depreciated. 
B) the dollar has appreciated. 
C) the British pound has depreciated. 
D) the British pound has stayed constant in value.

Question 19

How does an increase in a country's exchange rate affect its balance of trade?

Accepted Answer

A) An increase in the exchange rate raises imports,reduces exports,and reduces the balance of trade. 
B) An increase in the exchange rate reduces imports,raises exports,and reduces the balance of trade. 
C) An increase in the exchange rate reduces imports,raises exports,and increases the balance of trade. 
D) An increase in the exchange rate raises imports,reduces exports,and increases the balance of trade. 
A) An increase in the exchange rate raises imports,reduces exports,and reduces the balance of trade. 
B) An increase in the exchange rate reduces imports,raises exports,and reduces the balance of trade. 
C) An increase in the exchange rate reduces imports,raises exports,and increases the balance of trade. 
D) An increase in the exchange rate raises imports,reduces exports,and increases the balance of trade.

Question 20

U.S.firms that sell products in foreign markets protested the "Buy American" provision in the 2009 stimulus bill,arguing that if the United States restricted imports from foreign firms,

Accepted Answer

A) foreign countries would likely retaliate by limiting U.S.exports. 
B) foreign firms would stop selling all products in the United States. 
C) U.S.firms would never be able to meet the increased demand for U.S.-produced goods. 
D) eventually the government would demand price cuts from U.S.manufacturers. 
A) foreign countries would likely retaliate by limiting U.S.exports. 
B) foreign firms would stop selling all products in the United States. 
C) U.S.firms would never be able to meet the increased demand for U.S.-produced goods. 
D) eventually the government would demand price cuts from U.S.manufacturers.

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

If currency speculators decide that the value of the dollar should rise in the future relative to the yen,this will increase the demand for dollars and decrease the supply of dollars.

The "Buy American" provision in the 2009 stimulus package would require that stimulus money be spent only on U.S.-made goods.In the market for steel,the "Buy American" provision would the price of steel in the United States and the quantity of steel demanded in the United States.

If the exchange rate between the Mexican peso and the U.S.dollar expressed in terms of pesos per dollar is 13.5 pesos = 1 dollar,what is the exchange rate when expresses in terms of dollars per peso?

The World Trade Organization (WTO)promotes foreign trade and investment,or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.One reason for these anti-globalization protests is

Currency traders expect the dollar to appreciate.What impact will this have on equilibrium in the foreign exchange market?

How will contractionary monetary policy in Japan affect the demand and supply of the yen in the foreign exchange market?

Exports are domestically produced goods and services

Table 19-2 Output Per Hour of Work Table 19-2 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 19-2.Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand.

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Caterpillar's sales were severely affected by the decline in the U.S.housing market that began in 2006.Sales in the United States declined by between 2006 and 2008,and export sales during the same time period.

Currency traders expect the value of the dollar to fall.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

In 2010,________ of Caterpillar's sales were outside the United States.

Table 19-1 Linda and Sandy own The Preppy Puppy,a dog grooming business.Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

________ raised average tariff rates by over 50 percent in the United States in 1930.

If the exchange rate changes from $2.00 = £1 to $2.01 = £1 then

How does an increase in a country's exchange rate affect its balance of trade?

U.S.firms that sell products in foreign markets protested the "Buy American" provision in the 2009 stimulus bill,arguing that if the United States restricted imports from foreign firms,

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters

Exam 19: Comparative Advantage,international Trade,and Exchange Rates

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

If currency speculators decide that the value of the dollar should rise in the future relative to the yen,this will increase the demand for dollars and decrease the supply of dollars.

The "Buy American" provision in the 2009 stimulus package would require that stimulus money be spent only on U.S.-made goods.In the market for steel,the "Buy American" provision would ________ the price of steel in the United States and ________ the quantity of steel demanded in the United States.

If the exchange rate between the Mexican peso and the U.S.dollar expressed in terms of pesos per dollar is 13.5 pesos = 1 dollar,what is the exchange rate when expresses in terms of dollars per peso?

The World Trade Organization (WTO)promotes foreign trade and investment,or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.One reason for these anti-globalization protests is

Currency traders expect the dollar to appreciate.What impact will this have on equilibrium in the foreign exchange market?

How will contractionary monetary policy in Japan affect the demand and supply of the yen in the foreign exchange market?

Exports are domestically produced goods and services

Table 19-2 Output Per Hour of Work Table 19-2 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 19-2.Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand.

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Caterpillar's sales were severely affected by the decline in the U.S.housing market that began in 2006.Sales in the United States declined by ________ between 2006 and 2008,and export sales ________ during the same time period.

Currency traders expect the value of the dollar to fall.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

In 2010,________ of Caterpillar's sales were outside the United States.

Table 19-1 Linda and Sandy own The Preppy Puppy,a dog grooming business.Table 19-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19-1.Select the statement that accurately interprets the data in the table.

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

________ raised average tariff rates by over 50 percent in the United States in 1930.

If the exchange rate changes from $2.00 = £1 to $2.01 = £1 then

How does an increase in a country's exchange rate affect its balance of trade?

U.S.firms that sell products in foreign markets protested the "Buy American" provision in the 2009 stimulus bill,arguing that if the United States restricted imports from foreign firms,

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters

The "Buy American" provision in the 2009 stimulus package would require that stimulus money be spent only on U.S.-made goods.In the market for steel,the "Buy American" provision would the price of steel in the United States and the quantity of steel demanded in the United States.

Caterpillar's sales were severely affected by the decline in the U.S.housing market that began in 2006.Sales in the United States declined by between 2006 and 2008,and export sales during the same time period.