Question 1

Economic benefits to tariffs and import quotas include: more jobs in the protected industry,lower prices to consumers,and increased gains from trade.

Accepted Answer

A) True 
 B)False

Question 2

Trade moves jobs from import-competing industries to export industries.

Accepted Answer

A) True 
 B)False

Question 3

Economic policies of protectionism include: I.reduced trade barriers.
II.tariffs.
III.quotas.

Accepted Answer

A)  I and II only 
B)  II and III only 
C)  I and III only 
D)  I,II,and III

Question 4

During the recent financial crisis many workers lost their jobs.Amy,for example,lost her job as a pharmaceutical salesperson.After five months of unemployment she spent $6,000 on a class that taught her the skills she would need to sell medical devices.Today Amy makes 25%more than she did in pharmaceutical sales and enjoys her new job much more than her old job.Which of the following concepts best illustrates this scenario?

Accepted Answer

A)  Trade restrictions result in loss of jobs. 
B)  Trade re-allocates jobs across industries. 
C)  Trade results in a misallocation of resources. 
D)  Unemployment is a bad thing.

Question 5

An increase in import trade tends to ______ domestic prices.

Accepted Answer

A)  increase 
B)  decrease 
C)  hold constant 
D)  have an indeterminate effect on

Question 6

Use the following to answer questions 
Figure: International Trade 2 
-(Figure: International Trade 2)Refer to the figure.How much revenue does the tariff in this figure generate for the government?

Accepted Answer

A)  $30 
B)  $24 
C)  $6 
D)  $54

Question 7

Use the following to answer questions 
Figure: Bananas 
-(Figure: Bananas)Refer to the figure.If there is a $3 tariff on bananas,domestic consumers buy ______ fewer bananas and domestic producers grow ______ additional bananas.

Accepted Answer

A)  50,000;10,000 
B)  75,000;10,000 
C)  50,000;20,000 
D)  75,000;20,000

Question 8

Who does protectionism hurt?

Accepted Answer

A)  domestic producers only 
B)  domestic consumers only 
C)  international producers only 
D)  international producers and domestic consumers

Question 9

Use the following to answer questions 
Figure: Foreign Trade Market 
-(Figure: Foreign Trade Market)Refer to the figure.What is the dollar value of the lost consumer surplus as a result of prohibiting trade in this market?

Accepted Answer

A)  $26,000 
B)  $28,000 
C)  $32,000 
D)  $36,000

Question 10

A tariff results in a higher: I.consumer surplus.
II.producer surplus.
III.government revenue.

Accepted Answer

A)  I and II only 
B)  II and III only 
C)  I and III only 
D)  I,II,and III

Question 11

Suppose that a tariff increases domestic production of a good from 25 million units to 75 million units and raises the domestic price by $1.50.Assuming a linear domestic supply curve and a perfectly elastic world supply curve,what is the value of the resources wasted by increased domestic production?

Accepted Answer

A)  $37.5 million 
B)  $50 million 
C)  $75 million 
D)  $150 million

Question 12

If Tyler and Alex are trading partners,do their gains from trade depend on whether Tyler and Alex live in the same country?

Accepted Answer

A)  It is better if Tyler and Alex are both Americans. 
B)  It is better if one of them is American and one is not. 
C)  It is better if neither of them is American. 
D)  It doesn't matter in which country Tyler and Alex live.

Question 13

Briefly describe a few activities that a typical student might do on any given day that reflect the effects of globalization.

Accepted Answer

The answer of Briefly describe a few activities that a...

Question 14

If quotas on sugar were eliminated in the United States,domestic production of sugar would fall.Why is this a benefit in economic terms for the United States? I.Resources are freed up that could be used more efficiently elsewhere.
II.It is beneficial because it allows foreign producers of sugar to earn income and thus those countries are better off.
III.U.S.consumers are able to enjoy increased consumer surplus because of the lower prices of imported sugar.

Accepted Answer

A)  I and II only 
B)  I and III only 
C)  II and III only 
D)  I,II,and III

Question 15

Why does economic growth require job destruction?

Accepted Answer

A)  Economic growth requires international trade,which has been proven to cause short-term job loss. 
B)  Economic growth comes from creating and producing goods that use resources more productively,causing job loss in industries that use outdated technology. 
C)  Excessive job creation can destroy economic growth. 
D)  When economic growth occurs,there are not enough resources left over for worker retraining and re-education programs.

Question 16

Use the following to answer questions 
Figure: International Trade 3 
-(Figure: International Trade 3)Refer to the figure.If the government in this diagram eliminates all imports with a tariff,the value of the wasted resources will be:

Accepted Answer

A)  $4.50. 
B)  $81. 
C)  $27. 
D)  $36.

Question 17

The United States subsidizes mohair (goat fleece)purportedly for national security reasons.

Accepted Answer

A) True 
 B)False

Question 18

Without trade restrictions the price of tennis shoes is $30,and with trade restrictions the price of tennis shoes is $45.The difference in the two prices reflects:

Accepted Answer

A)  per-unit profits. 
B)  the value of the extra resources for domestic production of an additional pair of tennis shoes. 
C)  the gain in consumer surplus from free trade. 
D)  All of the answers are correct.

Question 19

Consider the following two statements and select the best answer. I.The national security argument might be a valid argument for trade protection.
II.Industries with spillover effects should be protected from foreign competition.

Accepted Answer

A)  I and II are both true. 
B)  I and II are both false. 
C)  I is likely to be true,and II is likely to be false. 
D)  I is likely to be false,and II is likely to be true.

Question 20

A tariff benefits domestic producers but hurts domestic consumers.

Accepted Answer

A) True 
 B)False

Exam 19: International Trade

Economic benefits to tariffs and import quotas include: more jobs in the protected industry,lower prices to consumers,and increased gains from trade.

Trade moves jobs from import-competing industries to export industries.

Economic policies of protectionism include: I.reduced trade barriers. II.tariffs. III.quotas.

An increase in import trade tends to ______ domestic prices.

Use the following to answer questions Figure: International Trade 2 -(Figure: International Trade 2) Refer to the figure.How much revenue does the tariff in this figure generate for the government?

Use the following to answer questions Figure: Bananas -(Figure: Bananas) Refer to the figure.If there is a $3 tariff on bananas,domestic consumers buy fewer bananas and domestic producers grow additional bananas.

Who does protectionism hurt?

Use the following to answer questions Figure: Foreign Trade Market -(Figure: Foreign Trade Market) Refer to the figure.What is the dollar value of the lost consumer surplus as a result of prohibiting trade in this market?

A tariff results in a higher: I.consumer surplus. II.producer surplus. III.government revenue.

If Tyler and Alex are trading partners,do their gains from trade depend on whether Tyler and Alex live in the same country?

Briefly describe a few activities that a typical student might do on any given day that reflect the effects of globalization.

Why does economic growth require job destruction?

Use the following to answer questions Figure: International Trade 3 -(Figure: International Trade 3) Refer to the figure.If the government in this diagram eliminates all imports with a tariff,the value of the wasted resources will be:

The United States subsidizes mohair (goat fleece)purportedly for national security reasons.

Without trade restrictions the price of tennis shoes is $30,and with trade restrictions the price of tennis shoes is $45.The difference in the two prices reflects:

Consider the following two statements and select the best answer. I.The national security argument might be a valid argument for trade protection. II.Industries with spillover effects should be protected from foreign competition.

A tariff benefits domestic producers but hurts domestic consumers.

Exam 19: International Trade

Economic benefits to tariffs and import quotas include: more jobs in the protected industry,lower prices to consumers,and increased gains from trade.

Trade moves jobs from import-competing industries to export industries.

Economic policies of protectionism include: I.reduced trade barriers. II.tariffs. III.quotas.

An increase in import trade tends to ______ domestic prices.

Use the following to answer questions Figure: International Trade 2 -(Figure: International Trade 2) Refer to the figure.How much revenue does the tariff in this figure generate for the government?

Use the following to answer questions Figure: Bananas -(Figure: Bananas) Refer to the figure.If there is a $3 tariff on bananas,domestic consumers buy ______ fewer bananas and domestic producers grow ______ additional bananas.

Who does protectionism hurt?

Use the following to answer questions Figure: Foreign Trade Market -(Figure: Foreign Trade Market) Refer to the figure.What is the dollar value of the lost consumer surplus as a result of prohibiting trade in this market?

A tariff results in a higher: I.consumer surplus. II.producer surplus. III.government revenue.

If Tyler and Alex are trading partners,do their gains from trade depend on whether Tyler and Alex live in the same country?

Briefly describe a few activities that a typical student might do on any given day that reflect the effects of globalization.

Why does economic growth require job destruction?

Use the following to answer questions Figure: International Trade 3 -(Figure: International Trade 3) Refer to the figure.If the government in this diagram eliminates all imports with a tariff,the value of the wasted resources will be:

The United States subsidizes mohair (goat fleece)purportedly for national security reasons.

Without trade restrictions the price of tennis shoes is $30,and with trade restrictions the price of tennis shoes is $45.The difference in the two prices reflects:

Consider the following two statements and select the best answer. I.The national security argument might be a valid argument for trade protection. II.Industries with spillover effects should be protected from foreign competition.

A tariff benefits domestic producers but hurts domestic consumers.

Use the following to answer questions Figure: Bananas -(Figure: Bananas) Refer to the figure.If there is a $3 tariff on bananas,domestic consumers buy fewer bananas and domestic producers grow additional bananas.