Question 1

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as _______.

Accepted Answer

A)   a non-tariff barrier
B)   a quota
C)   a government bureaucracy
D)   an import quota A

Question 2

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:

Accepted Answer

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

Question 3

There are nontariff barriers in the form of _______regulations, in which certain textiles are made in the United States, shipped to other countries, combined in making apparel with textiles made in those other countries-and then re-exported back to the United States at a lower tariff rate.

Accepted Answer

A)   import quota
B)   export quota
C)   "rules of origin"
D)   dumping C

Question 4

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect?

Accepted Answer

A)   government tax revenues increase
B)   domestic production and sales by the protected industries increase
C)   consumers' real incomes decrease
D)   prices of the goods produced by protected industries increase

Question 5

Suppose the government of Taiwan subsidized its watch-making industry, enabling Taiwanese producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Taiwanese subsidization policy by:

Accepted Answer

A)   setting a tariff high enough to just offset the subsidy granted to the Taiwanese watch-making industry.
B)   setting a declining quota on the import of Taiwanese watches such that the nation's domestic watch-making industry would continue to grow at the same rate as the rest of the economy.
C)   setting a tariff such that the prices of Taiwanese and domestic watches to the consumer are equal.
D)   accepting the subsidy of the Taiwanese government, making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.

Question 6

"Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic producers of the restricted products at the expense of domestic consumers." This statement:

Accepted Answer

A)   contains one error; the trade restraints do not increase the scarcity of foreign-produced goods.
B)   contains one error; domestic producers gain at the expense of foreign producers rather than domestic consumers.
C)   contains two errors; trade restraints do not increase the domestic scarcity of product and neither do they harm domestic consumers.
D)   is essentially correct.

Question 7

"The Unsafe consumer Products Argument" is one argument for shutting out certain imported products to domestic markets is that they are unsafe for consumers. What is the World Trade Organization's position regarding this argument?

Accepted Answer

The answer of "The Unsafe consumer Products Argument" is one...

Question 8

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

The answer of What are the effects of a tariff,...

Question 9

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that:

Accepted Answer

A)   firms will be protected from subsidized foreign competition.
B)   domestic producers can attain the economies of scale to allow them to compete in world markets.
C)   there will be adequate supplies of crucial resources in case they are needed for national defence.
D)   it will not be subjected to a takeover from a foreign competitor.

Question 10

Which of the following is the best example of a tariff?

Accepted Answer

A)   a tax placed on all small cars sold in the domestic market
B)   a limit imposed on the number of small cars that can be imported from a foreign country
C)   a subsidy from the American government to domestic manufacturers of small cars so they can compete more effectively with foreign producers of small cars
D)   a $1000-per-car fee imposed on all small cars imported

Question 11

During the second half of the twentieth century, trade barriers have in general:

Accepted Answer

A)   declined quite substantially both in the U.S. economy and in the global economy.
B)   declined quite substantially in the U.S. economy but not in the global economy.
C)   increased quite substantially in the U.S. economy and in the global economy.
D)   increased quite sbstantially in the U.S. economy but not in the global economy.

Question 12

Why would foreign firms export a product at less than its cost of production-which
Presumably means making a loss?

Accepted Answer

A)   Many nations participate in poor planning and as a result produce a surplus of product which they sell at a loss.
B)   This may be part of a long-term strategy in which foreign firms would sell at below the cost of production in the short-term for a time, and when they have driven out the domestic U.S. competition, they would then raise prices.
C)   Many nations simply wish to keep their workers employed, no matter what the cost.
D)   Many nations simply produce and sell inferior goods at prices that reflect this fact.

Question 13

Raising an existing tariff on grapes from Argentina will:

Accepted Answer

A)   increase domestic production of grapes.
B)   increase total American consumption of grapes.
C)   increase American consumption of domestically produced grapes.
D)   increase American imports of grapes from Argentina.

Question 14

A new American import quota on imported steel would be likely to:

Accepted Answer

A)   increase the production of steel-using American firms.
B)   increase American production of steel.
C)   generate tax revenue to the government.
D)   reduce the cost of production to steel-using American firms.

Question 15

Introducing a tariff on vitamin Z would:

Accepted Answer

A)   reduce exports of vitamin Z.
B)   increase American consumption of domestically produced vitamin Z.
C)   increase total American consumption of vitamin Z.
D)   decrease domestic production of vitamin Z.

Question 16

Why would foreign firms export a product at less than its cost of production-which presumably means making a loss? This question has two possible answers, discuss both of them.

Accepted Answer

The answer of Why would foreign firms export a product...

Question 17

As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a(n) _______ advantage and toward industries where it has a(n) _______
Advantage.

Accepted Answer

A)   absolute; absolute
B)   comparative; comparative
C)   comparative; competitive
D)   comparative; absolute

Question 18

In the national interest argument. It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument has been made for commodities that are important to the U.S. economy as a whole, like oil. Discuss some arguments economists may raise against this.

Accepted Answer

The answer of In the national interest argument. It is...

Question 19

In theory, imports might injure workers in several different ways: fewer jobs, lower wages, or poor working conditions. Provide a counterpoint for each and describe.

Accepted Answer

The answer of In theory, imports might injure workers in...

Question 20

Import tariffs generally _______ the output of domestic producers of the affected products and also _______ the output of domestic exporters.

Accepted Answer

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

Exam 20: Globalization and Protectionism

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as _______.

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:

There are nontariff barriers in the form of _______regulations, in which certain textiles are made in the United States, shipped to other countries, combined in making apparel with textiles made in those other countries-and then re-exported back to the United States at a lower tariff rate.

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect?

Suppose the government of Taiwan subsidized its watch-making industry, enabling Taiwanese producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Taiwanese subsidization policy by:

"Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic producers of the restricted products at the expense of domestic consumers." This statement:

"The Unsafe consumer Products Argument" is one argument for shutting out certain imported products to domestic markets is that they are unsafe for consumers. What is the World Trade Organization's position regarding this argument?

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?

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that:

Which of the following is the best example of a tariff?

During the second half of the twentieth century, trade barriers have in general:

Why would foreign firms export a product at less than its cost of production-which Presumably means making a loss?

Raising an existing tariff on grapes from Argentina will:

A new American import quota on imported steel would be likely to:

Introducing a tariff on vitamin Z would:

Why would foreign firms export a product at less than its cost of production-which presumably means making a loss? This question has two possible answers, discuss both of them.

As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a(n) _ advantage and toward industries where it has a(n) _ Advantage.

In theory, imports might injure workers in several different ways: fewer jobs, lower wages, or poor working conditions. Provide a counterpoint for each and describe.

Import tariffs generally _ the output of domestic producers of the affected products and also _ the output of domestic exporters.

Exam 20: Globalization and Protectionism

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as _______.

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:

There are nontariff barriers in the form of _______regulations, in which certain textiles are made in the United States, shipped to other countries, combined in making apparel with textiles made in those other countries-and then re-exported back to the United States at a lower tariff rate.

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect?

Suppose the government of Taiwan subsidized its watch-making industry, enabling Taiwanese producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Taiwanese subsidization policy by:

"Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic producers of the restricted products at the expense of domestic consumers." This statement:

"The Unsafe consumer Products Argument" is one argument for shutting out certain imported products to domestic markets is that they are unsafe for consumers. What is the World Trade Organization's position regarding this argument?

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?

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that:

Which of the following is the best example of a tariff?

During the second half of the twentieth century, trade barriers have in general:

Why would foreign firms export a product at less than its cost of production-which Presumably means making a loss?

Raising an existing tariff on grapes from Argentina will:

A new American import quota on imported steel would be likely to:

Introducing a tariff on vitamin Z would:

Why would foreign firms export a product at less than its cost of production-which presumably means making a loss? This question has two possible answers, discuss both of them.

As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a(n) _______ advantage and toward industries where it has a(n) _______ Advantage.

In theory, imports might injure workers in several different ways: fewer jobs, lower wages, or poor working conditions. Provide a counterpoint for each and describe.

Import tariffs generally _______ the output of domestic producers of the affected products and also _______ the output of domestic exporters.

As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a(n) _ advantage and toward industries where it has a(n) _ Advantage.

Import tariffs generally _ the output of domestic producers of the affected products and also _ the output of domestic exporters.