Question 1

Protection can give new industries a chance to get a foothold so that they can later compete in the international market after they become more productive through learning by doing.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that the U.S.has comparative advantage on cars while Japan has comparative advantage on TVs.Assume that both countries produce both goods in autarky.If both countries open their economies to trade,identify the workers in each country who will be hurt by free trade.

Accepted Answer

The answer of Suppose that the U.S.has comparative advantage on...

Question 3

What are the rationales for protectionist policies?

Accepted Answer

The answer of What are the rationales for protectionist policies?...

Question 4

Why did the Application claim that Sam Walton "effectively ran an anti-poverty program"?

Accepted Answer

A) because Walmart stocked its shelves with lower priced goods and services imported from countries like China 
B) because Walmart contributed heavily to the "Make a Wish Foundation" 
C) because Walmart donated expired grocery items to the poor 
D) because the tax generated from sales at Walmart is used to fund anti-poverty programs

Question 5

Suppose the U.S.imposes a ban on imported steel from China because the Chinese steel was made with factories that pollute the environment.If China complains to the WTO regarding the U.S.ban,the WTO will side with:

Accepted Answer

A) China,because the pollution in China does not harm the U.S.directly. 
B) China,because the WTO is in favor of industries that generate pollution. 
C) the U.S. ,because a country can determine what goods can and cannot enter its borders. 
D) the U.S. ,because US factories have to comply with U.S.environmental standards.

Question 6

If the opportunity cost of a table is 5 chairs in nation A and 1 chair in nation B,it makes sense for nation B to produce chairs.

Accepted Answer

A) True 
 B)False

Question 7

Based on what you learned from the application,can a firm who exports to the U.S.be charged with dumping even though the price they sell at home is lower?

Accepted Answer

A) no 
B) yes,because the "constructed value" estimated by the department of Commerce can overstate the price that the firm charges at home 
C) yes,because the firm that brings forward the charges can supply overstated figures data to the Department of Commerce 
D) B and C are correct.

Question 8

________ occurs when a firm cuts prices below production costs in a deliberate attempt to drive competitors out of business.

Accepted Answer

A) Voracious dumping 
B) Price discrimination 
C) Predatory pricing 
D) Deliberate dumping

Question 9

Which of the following statements is false?

Accepted Answer

A) The production possibilities curve shows the combinations of goods that can be consumed by a nation before trade begins. 
B) The production possibilities curve shows the combinations of goods that can be consumed by a nation after trade and specialization begins. 
C) The production possibilities curve shows the combinations of goods that can be produced by a nation before trading begins. 
D) The production possibilities curve shows the combinations of goods that can be produced by a nation after trade and specialization begins.

Question 10

If Nation A can produce shirts at a lower opportunity cost than any other nation,Nation A is said to have a(n)________ in the production of shirts.

Accepted Answer

A) autarky 
B) comparative advantage 
C) absolute advantage 
D) comparative disadvantage

Question 11

Daily Output of Scotland and Poland
  Table 18.1
-Refer to Table 18.1.Possible terms of trade between Scotland and Poland are:

Accepted Answer

A) 1 accordion for 1/4 bagpipe. 
B) 1 bagpipe for 2 accordions. 
C) 1 bagpipe for 1/3 accordion. 
D) 1 accordion for 1 bagpipe.

Question 12

According to the application,how large was the change in relative price that helped the poor that can be attributed to trade with China?

Accepted Answer

A) 1/3 
B) 1/2 
C) 1/4 
D) 1/10

Question 13

An import quota is illegal under the rules of the:

Accepted Answer

A) World Trade Organization. 
B) Congress. 
C) Federal Reserve. 
D) World Wide Web.

Question 14

Figure 18.1
-Refer to Figure 18.1.The terms of trade for Duckland is:

Accepted Answer

A) 1 pair of sunglasses for 6/5 umbrellas. 
B) 1 pair of sunglasses for 2/3 umbrellas. 
C) 1 pair of sunglasses for 5/6 umbrellas. 
D) 1 pair of sunglasses for 3/2 umbrellas.

Question 15

Which of the following benefits from a quota or VER?

Accepted Answer

A) consumers 
B) domestic producers 
C) the government 
D) all of the above

Question 16

What is the rationale for protecting infant industries?

Accepted Answer

The answer of What is the rationale for protecting infant...

Question 17

The Dominican Republic-Central American Free Trade Association includes:

Accepted Answer

A) the U.S. 
B) Honduras. 
C) Costa Rica. 
D) all of the above.

Question 18

The government can facilitate the transfer of unskilled workers to high-skilled jobs by:

Accepted Answer

A) increasing tariffs to help unskilled workers. 
B) increasing tariffs to speed the development of jobs requiring skilled labor. 
C) providing assistance for education and training for unskilled workers. 
D) laying off skilled workers to provide jobs for unskilled workers.

Question 19

Which of the following statements is true?

Accepted Answer

A) Free trade will benefit all workers in a nation equally. 
B) As a result of specialization some workers will be displaced and hence,harmed by free trade. 
C) Free trade leads to lower wages for all workers in both nations. 
D) Specialization will result in a decline in an industry and none of those workers will be able to find other jobs.

Question 20

Regional agreements help GATT reach agreements faster.

Accepted Answer

A) True 
 B)False

Exam 18: International Trade and Public Policy

Protection can give new industries a chance to get a foothold so that they can later compete in the international market after they become more productive through learning by doing.

Suppose that the U.S.has comparative advantage on cars while Japan has comparative advantage on TVs.Assume that both countries produce both goods in autarky.If both countries open their economies to trade,identify the workers in each country who will be hurt by free trade.

What are the rationales for protectionist policies?

Why did the Application claim that Sam Walton "effectively ran an anti-poverty program"?

Suppose the U.S.imposes a ban on imported steel from China because the Chinese steel was made with factories that pollute the environment.If China complains to the WTO regarding the U.S.ban,the WTO will side with:

If the opportunity cost of a table is 5 chairs in nation A and 1 chair in nation B,it makes sense for nation B to produce chairs.

Based on what you learned from the application,can a firm who exports to the U.S.be charged with dumping even though the price they sell at home is lower?

________ occurs when a firm cuts prices below production costs in a deliberate attempt to drive competitors out of business.

Which of the following statements is false?

If Nation A can produce shirts at a lower opportunity cost than any other nation,Nation A is said to have a(n) ________ in the production of shirts.

Daily Output of Scotland and Poland Table 18.1 -Refer to Table 18.1.Possible terms of trade between Scotland and Poland are:

According to the application,how large was the change in relative price that helped the poor that can be attributed to trade with China?

An import quota is illegal under the rules of the:

Figure 18.1 -Refer to Figure 18.1.The terms of trade for Duckland is:

Which of the following benefits from a quota or VER?

What is the rationale for protecting infant industries?

The Dominican Republic-Central American Free Trade Association includes:

The government can facilitate the transfer of unskilled workers to high-skilled jobs by:

Which of the following statements is true?

Regional agreements help GATT reach agreements faster.