Question 1

If the dollar appreciates against the Mexican peso,

Accepted Answer

A) Mexican imports to the U.S.become more expensive. 
B) U.S.exports to Mexico become less expensive. 
C) U.S.exports to Mexico become more expensive. 
D) The value of Mexican imports to the United States does not change. 
A) Mexican imports to the U.S.become more expensive. 
B) U.S.exports to Mexico become less expensive. 
C) U.S.exports to Mexico become more expensive. 
D) The value of Mexican imports to the United States does not change.

Question 2

Measuring the impact of a quota or tariff on the U.S.economy is an example of ________.Stating that a quota or tariff should be eliminated is an example of ________.

Accepted Answer

A) statistical analysis;economic analysis 
B) positive analysis;normative analysis 
C) econometric analysis;protectionism 
D) trade analysis;an opinion 
A) statistical analysis;economic analysis 
B) positive analysis;normative analysis 
C) econometric analysis;protectionism 
D) trade analysis;an opinion

Question 3

Figure 19-4   Suppose the U.S.government imposes a $0.50 per pound tariff on sugar imports.Figure 19-4 shows the demand and supply curves for sugar and the impact of this tariff.
-Use Figure 19-4 to answer questions a-i.
a.Following the imposition of the tariff,what is the price that domestic consumers must now pay and what is the quantity purchased?
b.Calculate the value of consumer surplus with the tariff in place.
c.What is the quantity supplied by domestic sugar producers with the tariff in place?
d.Calculate the value of producer surplus received by U.S.sugar producers with the tariff in place.
e.What is the quantity of sugar imported with the tariff in place?
f.What is the amount of tariff revenue collected by the government?
g.The tariff has reduced consumer surplus.Calculate the loss in consumer surplus due to the tariff.
h.What portion of the consumer surplus loss is redistributed to domestic producers? To the government?
i.Calculate the deadweight loss due to the tariff.

Accepted Answer

a.Price = $2.00 per pound;Quantity purch

Question 4

A tariff is

Accepted Answer

A) a limit placed on the quantity of goods that can be imported into a country. 
B) a tax imposed by a government on goods imported into a country. 
C) a subsidy granted to importers of a vital input. 
D) a health and safety restriction imposed on an imported product. 
A) a limit placed on the quantity of goods that can be imported into a country. 
B) a tax imposed by a government on goods imported into a country. 
C) a subsidy granted to importers of a vital input. 
D) a health and safety restriction imposed on an imported product.

Question 5

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

Accepted Answer

A) tariff. 
B) quota. 
C) quantity floor. 
D) barricade. 
A) tariff. 
B) quota. 
C) quantity floor. 
D) barricade.

Question 6

What are the four main sources of comparative advantage? Briefly explain each source and provide examples.

Accepted Answer

The 4 main sources cited are:
1.climate

Question 7

Which of the following will not shift the demand for the euro to the right?

Accepted Answer

A) an increase in interest rates in the European Union 
B) an increase in incomes in countries that buy goods from the European Union 
C) expectations among speculators that the price of the euro will rise in the future 
D) a decrease in the demand for European goods 
A) an increase in interest rates in the European Union 
B) an increase in incomes in countries that buy goods from the European Union 
C) expectations among speculators that the price of the euro will rise in the future 
D) a decrease in the demand for European goods

Question 8

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by

Accepted Answer

A) establishing the General Agreement on Tariffs and Trade (GATT). 
B) passing the Smoot-Hawley Tariff. 
C) establishing the World Trade Organization (WTO). 
D) passing the North American Free Trade Agreement (NAFT
A) . 
A) establishing the General Agreement on Tariffs and Trade (GATT). 
B) passing the Smoot-Hawley Tariff. 
C) establishing the World Trade Organization (WTO). 
D) passing the North American Free Trade Agreement (NAFT
A) .

Question 9

The simple trade model demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage.In reality we do not see complete specialization in production.State three reasons why this is case.

Accepted Answer

Three reasons outlined in the text are:

Question 10

In the United States,imports and exports make up more than half of GDP.

Accepted Answer

A) True 
 B)False

Question 11

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

Accepted Answer

A) split their time evenly between work and school. 
B) usually have few good alternatives to work. 
C) are only allowed to work if they have attended school up to age 15. 
D) who work are relatively rare,as most do attend school full time. 
A) split their time evenly between work and school. 
B) usually have few good alternatives to work. 
C) are only allowed to work if they have attended school up to age 15. 
D) who work are relatively rare,as most do attend school full time.

Question 12

If the dollar appreciates,how will aggregate demand in the United States be affected?

Accepted Answer

A) Aggregate demand will shift to the right as exports increase. 
B) Aggregate demand will shift to the right as imports increase. 
C) Aggregate demand will shift to the left as imports increase. 
D) Aggregate demand will shift to the left as exports increase. 
A) Aggregate demand will shift to the right as exports increase. 
B) Aggregate demand will shift to the right as imports increase. 
C) Aggregate demand will shift to the left as imports increase. 
D) Aggregate demand will shift to the left as exports increase.

Question 13

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia can not benefit from trade with Norway.

Accepted Answer

A) True 
 B)False

Question 14

Under trade agreements signed with other countries,the United States is allowed to impose tariffs on imports if foreign firms are selling products in the United States at below their production cost.This is exactly what occurred when the United States raised the tariff on wire hangers imported from China.This tariff

Accepted Answer

A) increased wages in the Chinese wire hanger industry and increased imports of Chinese wire hangers to the United States. 
B) decreased imports of Chinese wire hangers to the United States and increased exports of U.S.wire hangers to China. 
C) saved some jobs in the U.S.wire hanger industry,but increased costs and possibly cost jobs in the U.S.dry cleaning industry. 
D) increased costs in the Chinese wire hanger industry and decreased costs in the U.S.wire hanger industry. 
A) increased wages in the Chinese wire hanger industry and increased imports of Chinese wire hangers to the United States. 
B) decreased imports of Chinese wire hangers to the United States and increased exports of U.S.wire hangers to China. 
C) saved some jobs in the U.S.wire hanger industry,but increased costs and possibly cost jobs in the U.S.dry cleaning industry. 
D) increased costs in the Chinese wire hanger industry and decreased costs in the U.S.wire hanger industry.

Question 15

Whenever a buyer and a seller agree to trade,

Accepted Answer

A) the agreement is made based on absolute advantage. 
B) they must have identical opportunity costs in producing their respective products. 
C) one party will always be worse off. 
D) both must believe they will be made better off. 
A) the agreement is made based on absolute advantage. 
B) they must have identical opportunity costs in producing their respective products. 
C) one party will always be worse off. 
D) both must believe they will be made better off.

Question 16

You're traveling in Ireland and are thinking about buying a new digital camera.You've decided you'd be willing to pay $125 for a new camera,but cameras in Ireland are all priced in euros.If the camera you're looking at costs 115 euros,under which of the following exchange rates would you be willing to purchase the camera? (Assume no taxes or duties are associated with the purchase. )

Accepted Answer

A) 0.56 euros per dollar 
B) 0.89 euros per dollar 
C) 0.92 euros per dollar 
D) You would purchase the new camera at any of the above exchange rates. 
A) 0.56 euros per dollar 
B) 0.89 euros per dollar 
C) 0.92 euros per dollar 
D) You would purchase the new camera at any of the above exchange rates.

Question 17

Which of the following statements is used to justify protectionism?

Accepted Answer

A) Free trade leads to higher prices for imported goods. 
B) Free trade increases employment by protecting domestic firms. 
C) A country should not rely on other countries for goods that are critical to its national defense. 
D) Trade restrictions are not necessary to protect new firms since they can gain experience and become more productive without protection. 
A) Free trade leads to higher prices for imported goods. 
B) Free trade increases employment by protecting domestic firms. 
C) A country should not rely on other countries for goods that are critical to its national defense. 
D) Trade restrictions are not necessary to protect new firms since they can gain experience and become more productive without protection.

Question 18

The selling of a product for a price below its cost of production is called

Accepted Answer

A) fair competition. 
B) dumping. 
C) unfair competition. 
D) operating at a loss. 
A) fair competition. 
B) dumping. 
C) unfair competition. 
D) operating at a loss.

Question 19

Figure 19-3   Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 19-3 illustrates the impact of the quota.
-Refer to Figure 19-3.What is the area of domestic producer surplus without a quota?

Accepted Answer

A) C 
B) C + B 
C) A + B + C 
D) A + B + C + D 
A) C 
B) C + B 
C) A + B + C 
D) A + B + C + D

Question 20

If Japanese workers are more productive than French workers then trade between Japan and France

Accepted Answer

A) can take place only if France has an absolute advantage in producing a good or service Japanese buyers want. 
B) cannot take place because Japanese goods and services will be less expensive than French goods and services. 
C) cannot take place until French workers become more productive. 
D) will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want. 
A) can take place only if France has an absolute advantage in producing a good or service Japanese buyers want. 
B) cannot take place because Japanese goods and services will be less expensive than French goods and services. 
C) cannot take place until French workers become more productive. 
D) will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want.

If the dollar appreciates against the Mexican peso,

Measuring the impact of a quota or tariff on the U.S.economy is an example of .Stating that a quota or tariff should be eliminated is an example of .

A tariff is

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

What are the four main sources of comparative advantage? Briefly explain each source and provide examples.

Which of the following will not shift the demand for the euro to the right?

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by

The simple trade model demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage.In reality we do not see complete specialization in production.State three reasons why this is case.

In the United States,imports and exports make up more than half of GDP.

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

If the dollar appreciates,how will aggregate demand in the United States be affected?

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia can not benefit from trade with Norway.

Whenever a buyer and a seller agree to trade,

Which of the following statements is used to justify protectionism?

The selling of a product for a price below its cost of production is called

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the area of domestic producer surplus without a quota?

If Japanese workers are more productive than French workers then trade between Japan and France

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

If the dollar appreciates against the Mexican peso,

Measuring the impact of a quota or tariff on the U.S.economy is an example of ________.Stating that a quota or tariff should be eliminated is an example of ________.

A tariff is

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

What are the four main sources of comparative advantage? Briefly explain each source and provide examples.

Which of the following will not shift the demand for the euro to the right?

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by

The simple trade model demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage.In reality we do not see complete specialization in production.State three reasons why this is case.

In the United States,imports and exports make up more than half of GDP.

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

If the dollar appreciates,how will aggregate demand in the United States be affected?

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia can not benefit from trade with Norway.

Whenever a buyer and a seller agree to trade,

Which of the following statements is used to justify protectionism?

The selling of a product for a price below its cost of production is called

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the area of domestic producer surplus without a quota?

If Japanese workers are more productive than French workers then trade between Japan and France

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

Measuring the impact of a quota or tariff on the U.S.economy is an example of .Stating that a quota or tariff should be eliminated is an example of .