Question 1

"The nation needs to prevent foreign nations from selling their excess goods in our nation at a price below cost so we can save American ﬁrms." This quotation would be most closely associated with
Which protectionist argument?

Accepted Answer

A)  increase domestic employment 
B)  protection against dumping 
C)  strategic trade policy 
D)  cheap foreign labor

Question 2

$$\begin{array} { | l | c | c | } 
\hline & \text { Wine } & \text { Machines } \
\hline \text { Brazil } & 30 & 10 \
\hline \text { Poland } & 10 & 10 \
\hline
\end{array}$$ The accompanying table gives maximum-output alternatives for Brazil and Poland. It can be seen that if the two nations open up trade with each other, then

Accepted Answer

A)  Brazil will specialize in producing machines and import wine. 
B)  Poland will specialize in producing machines and import wine. 
C)  Poland will export wine. 
D)  Brazil will not gain from specializing and trading, but Poland will gain.

Question 3

An excise tax that is applied to an imported product that is not at all produced domestically is called a(n)

Accepted Answer

A)  protective tariff. 
B)  revenue tariff. 
C)  import quota. 
D)  nontariff barrier.

Question 4

Refer to the graphs. Terryville has a comparative advantage in producing

Accepted Answer

A)  product A. 
B)  product B. 
C)  both products A and B. 
D)  neither product A nor B.

Question 5

Beneﬁts from international trade are based on differences in the following areas, except

Accepted Answer

A)  resource endowments. 
B)  technological capabilities. 
C)  product quality and other attributes. 
D)  income levels.

Question 6

Whenever a foreign producer is selling a product like steel at a lower price than domestic
producers, then dumping is being practiced and must be corrected.

Accepted Answer

A) True 
 B)False

Question 7

$ \quad\quad { Country ~X } $
$\begin{array} { | c | c | c | } 
\hline Price & Q _ { d d } & Q _ { S d } \
\hline \$ 5.00 & 200 & 400 \
\hline 4.00 & 250 & 350 \
\hline 3.00 & 300 & 300 \
\hline 2.00 & 350 & 250 \
\hline 1.00 & 400 & 200 \
\hline
\end{array}$
The accompanying table gives data for Country $ X $. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically $ \left(Q_{d d}\right) $, and Column 3 is the quantity supplied domestically $ \left(Q_{s d}\right) $. If Country $ X $ opens itself up to international trade and the world-market price of the product is $ \$ 3 $, then Country $ X $ will

Accepted Answer

A)  neither export nor import the product. 
B)  export some units of the product. 
C)  import some units of the product. 
D)  not produce the product.

Question 8

As it relates to international trade, dumping

Accepted Answer

A)  is a form of price discrimination illegal under U.S. antitrust laws. 
B)  is the practice of selling goods in a foreign market at less than cost. 
C)  constitutes a general case for permanent tariffs. 
D)  is deﬁned as selling more goods than allowed by an import quota.

Question 9

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size.
${ \text { Alpha's production possibilities } }$
$\begin{array}{l}
\begin{array} { | l | c | c | c | c | c | } 
\hline & A & B & C & D & E \
\hline \text { Fish (Tons) } & 80 & 60 & 40 & 20 & 0 \
\hline \text { Chips (Tons) } & 0 & 5 & 10 & 15 & 20 \
\hline
\end{array}\\\
{ \text { Beta's production possibilities } } \
\begin{array} { | l | c | c | c | c | c | } 
\hline & A & B & C & D & E \
\hline \text { Fish (Tons) } & 240 & 180 & 120 & 60 & 0 \
\hline \text { Chips (Tons) } & 0 & 10 & 20 & 30 & 40 \
\hline
\end{array}
\end{array}$ The given data show that

Accepted Answer

A)  Beta has a comparative advantage in producing chips. 
B)  Alpha has a comparative advantage in catching ?sh. 
C)  Alpha is subject to constant costs and Beta is subject to increasing costs. 
D)  Beta is more e?cient than Alpha both in catching ?sh and in producing chips.

Question 10

During the Great Depression, most nations lowered tariffs and abolished import quotas to
encourage the ﬂow of trade.

Accepted Answer

A) True 
 B)False

Question 11

The beneﬁts to trading nations based on comparative advantage accrue from

Accepted Answer

A)  specialization only. 
B)  specialization and trading. 
C)  trading only. 
D)  protection of domestic industries.

Question 12

In a two-nation, two-good world, which of the following statements is true?

Accepted Answer

A)  One nation cannot possibly have an absolute advantage over the other nation in both products. 
B)  If one nation has the comparative advantage in one product, then the other nation would have the comparative advantage in the other product. 
C)  One nation will always have the comparative advantage over the other nation in one of the products. 
D)  If one nation has the absolute advantage in one product, then the other nation would have the absolute advantage in the other product.

Question 13

Refer to the diagram, where $S _ { d }$ and
$D _ { d }$ are the domestic supply and demand for a product and
$P _ { c }$ is
The world price of that product. With free trade, that is, assuming no tariff, the outputs produced by
Domestic and foreign producers, respectively, would be

Accepted Answer

A)  v and vz. 
B)  w and wy. 
C)  w and wz. 
D)  vx and xz.

Question 14

The law of increasing opportunity costs limits international specialization.

Accepted Answer

A) True 
 B)False

Question 15

Which is not a commonly heard argument for protectionism?

Accepted Answer

A)  A strong national defense requires that some military products be produced domestically. 
B)  Infant industries need short-term protection from foreign competition in order to grow. 
C)  Specialization along the lines of comparative advantage can lead to some economic instability in a nation. 
D)  When other nations' economies grow, they typically import fewer goods and services.

Question 16

A nation with abundant capital resources tends to be an exporter of

Accepted Answer

A)  labor-intensive products 
B)  capital-intensive products. 
C)  natural resource-based products. 
D)  consumer products.

Question 17

Some people accuse an offshoring ﬁrm of "exporting jobs". This activity called offshoring is really equivalent to

Accepted Answer

A)  exporting products. 
B)  importing products. 
C)  import tariffs. 
D)  import quotas.

Question 18

$ \quad\quad { Country ~Y } $
$\begin{array} { | c | c | c | } 
\hline Price & Q _ { \text {dd } } & Q _ { \text {sd } } \
\hline \$ 9.00 & 250 & 450 \
\hline 8.00 & 300 & 400 \
\hline 7.00 & 350 & 350 \
\hline 6.00 & 400 & 300 \
\hline
\end{array}$
The accompanying table gives data for Country Y. Column 1 is the price of a product. Column 2 is the quantity demanded domestically $\left( Q _ { d d } \right)$, and Column 3 is the quantity supplied domestically $\left( Q _ { s d } \right)$. At what price will Country $Y$ export 100 units of the product?

Accepted Answer

A)  $9.00 
B)  $8.00 
C)  $7.00 
D)  $6.00

Question 19

Which country has the largest share of total world exports?

Accepted Answer

A)  Japan 
B)  Germany 
C)  United States 
D)  China

Question 20

Cite three important reasons why nations trade.

Accepted Answer

The answer of Cite three important reasons why nations trade....

Exam 20: International Trade

"The nation needs to prevent foreign nations from selling their excess goods in our nation at a price below cost so we can save American ﬁrms." This quotation would be most closely associated with Which protectionist argument?

An excise tax that is applied to an imported product that is not at all produced domestically is called a(n)

Refer to the graphs. Terryville has a comparative advantage in producing

Beneﬁts from international trade are based on differences in the following areas, except

Whenever a foreign producer is selling a product like steel at a lower price than domestic producers, then dumping is being practiced and must be corrected.

As it relates to international trade, dumping

During the Great Depression, most nations lowered tariffs and abolished import quotas to encourage the ﬂow of trade.

The beneﬁts to trading nations based on comparative advantage accrue from

In a two-nation, two-good world, which of the following statements is true?

Refer to the diagram, where SdS _ { d }Sd​ and DdD _ { d }Dd​ are the domestic supply and demand for a product and PcP _ { c }Pc​ is The world price of that product. With free trade, that is, assuming no tariff, the outputs produced by Domestic and foreign producers, respectively, would be

The law of increasing opportunity costs limits international specialization.

Which is not a commonly heard argument for protectionism?

A nation with abundant capital resources tends to be an exporter of

Some people accuse an offshoring ﬁrm of "exporting jobs". This activity called offshoring is really equivalent to

Which country has the largest share of total world exports?

Cite three important reasons why nations trade.