Question 1

Which of the following is not a problem with trade restrictions?

Accepted Answer

A)  the high cost of rent-seeking activities such as lobbying
B)  the high cost of enforcement
C)  the unintended effects on related industries
D)  the inability to save U.S.jobs in the short run in industries that compete with imports
E)  the possibility of retaliationF) A) and E)
G) A) and D)

Question 2

An import quota is a

Accepted Answer

A)  legal limit on the quantity of a good that can be imported per year
B)  legal requirement that a specified percentage of a final good's value must be produced domestically
C)  legal requirement that exports to a certain country must exceed a specified value before that country's product may be imported
D)  percentage tax on an imported product
E)  lump-sum tax on an imported productF) A) and D)
G) B) and E)

Question 3

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true with regard to opportunity costs in the two countries?

Accepted Answer

A)  The opportunity cost of producing watches is higher in Denmark.
B)  The opportunity cost of producing cheese is higher in Denmark.
C)  The opportunity cost of producing cheese is identical in both countries.
D)  It is impossible to compare opportunity costs because the two countries use different currencies.
E)  In both countries combined, the opportunity cost of one watch is 150 pounds of cheese.F) D) and E)
G) A) and E)

Question 4

If production is subject to economies of scale,

Accepted Answer

A)  countries can gain from trade if each nation specializes
B)  one country will develop an absolute advantage in the production of all goods
C)  higher output levels result in higher average production costs
D)  one country will develop a comparative advantage in the production of all goods
E)  countries cannot gain from tradeF) A) and B)
G) None of the above

Question 5

Under a tariff, the domestic government gains revenue, but under an import quota it does not, unless it sells the quota rights.

Accepted Answer

A) True 
 B)False

Question 6

A nation's consumption possibilities frontier is

Accepted Answer

A)  always the same as its production possibilities frontier
B)  never the same as its production possibilities frontier
C)  the same as its production possibilities frontier only if there is advantageous trade
D)  the same as its production possibilities frontier only if there is no international trade
E)  usually lower than its production possibilities frontierF) C) and E)
G) B) and C)

Question 7

Which country is the United States' largest trading partner?

Accepted Answer

A)  Canada
B)  Japan
C)  Great Britain
D)  Mexico
E)  South KoreaF) A) and C)
G) B) and D)

Question 8

Which of the following is not a type of trade restriction?

Accepted Answer

A)  low-interest loans to foreign buyers
B)  export subsidies for domestic firms
C)  domestic content requirements
D)  restrictive health and safety standards
E)  economies of scaleF) All of the above
G) A) and E)

Question 9

Tina Makumbi imports sesame oil from Ethiopia and sells to a market that has a downward sloping demand curve.The demand curve indicates that some consumers are willing to pay $1.50 or more per pound for the first few pounds, but every consumer gets to buy at the market clearing price of $0.50 per pound.The difference between the most that consumers would pay and the actual amount they do pay is called

Accepted Answer

A)  exporter surplus
B)  trade balance
C)  producer surplus
D)  consumer equilibrium
E)  consumer surplusF) All of the above
G) C) and E)

Question 10

Low wages may be traceable to all of the following except one.Which is the exception?

Accepted Answer

A)  low productivity
B)  too much saving
C)  unstable business climate
D)  poor education and training
E)  lack of adequate physical capital supplied to laborF) A) and D)
G) B) and C)

Question 11

Which of the following factors is the most significant in determining the pattern of international trade?

Accepted Answer

A)  absolute advantage
B)  diplomatic expertise
C)  comparative advantage
D)  overpowering military strength
E)  a country's size relative to another country'sF) C) and D)
G) A) and B)

Question 12

Exhibit 19-8  If the country in Exhibit 19-8 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,

Accepted Answer

A)  imports will not change
B)  imports will increase from 25 to 50 units per month
C)  domestic production will increase from 100 to 175 units per month
D)  domestic production will increase from 100 to 125 units per month
E)  domestic production will increase from 100 to 150 units per monthF) A) and D)
G) C) and D)

Question 13

Exhibit 19-1  Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.What is the opportunity cost of a coconut in Lambda?

Accepted Answer

A)  1/2 fish
B)  1 fish
C)  2 fish
D)  21/2 fish
E)  cannot tell from the information providedF) A) and E)
G) A) and B)

Question 14

International trade between countries typically produces a winner and a loser.Generally, it is the economically more advanced country that gains at the expense of the less developed nation.

Accepted Answer

A) True 
 B)False

Question 15

A country will import a good only if

Accepted Answer

A)  there is excess domestic quantity supplied at the world price
B)  domestic quantity supplied is greater than world quantity supplied
C)  domestic quantity demanded is less than world quantity demanded
D)  domestic quantity demanded is zero at the world price
E)  excess quantity demanded is positive at the world priceF) C) and E)
G) A) and E)

Question 16

A tax on imports equal to a percentage of the cost of those imports is known as

Accepted Answer

A)  a specific tariff
B)  an ad valorem tariff
C)  a tax on luxury goods only
D)  an effective quota
E)  an ad valorem quotaF) C) and D)
G) A) and D)

Question 17

Exhibit 19-4  In Exhibit 19-4, if the world price of tulips is $1 and there are no trade restrictions, The Netherlands will

Accepted Answer

A)  produce 7, 000, consume 10, 000, and export 3, 000 tulips
B)  produce 10, 000 and consume 10, 000 tulips
C)  produce no tulips
D)  import all of the tulips that it consumes
E)  consume all of the tulips that it producesF) B) and D)
G) C) and D)

Question 18

Revenue from a(n) __________ goes to the U.S.government while revenue from a(n) __________ goes to whomever secures the right to sell foreign goods in the U.S.market.

Accepted Answer

A)  export subsidy, quota
B)  tariff, quota
C)  domestic content requirement, low-interest loan
D)  tariff, export subsidy
E)  quota, tariffF) B) and E)
G) A) and C)

Question 19

The General Agreement on Tariffs and Trade (GATT) was established in

Accepted Answer

A)  1870 to protect U.S.industries and decrease world trade
B)  1921 to manage legal and accounting requirements for U.S.tariffs and quotas
C)  1947 to reduce trade restrictions among 23 countries
D)  1973 to increase trade restrictions, after OPEC significantly raised oil prices
E)  1990 to create a common marketF) A) and B)
G) C) and D)

Question 20

Absolute advantage

Accepted Answer

A)  is the same as comparative advantage
B)  implies autarky
C)  means that countries of the same size have the same opportunity cost of producing both goods
D)  means that a country can produce more of two goods than another country can
E)  means that a country can produce less of two goods than another country canF) A) and D)
G) A) and C)

Exam 19: International Trade

Low wages may be traceable to all of the following except one.Which is the exception?

Correct Answer
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A country will import a good only if

Correct Answer
verified

A tax on imports equal to a percentage of the cost of those imports is known as

Correct Answer
verified

Exhibit 19-1 Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.What is the opportunity cost of a coconut in Lambda?

Correct Answer
verified

The General Agreement on Tariffs and Trade (GATT) was established in

Correct Answer
verified

Under a tariff, the domestic government gains revenue, but under an import quota it does not, unless it sells the quota rights.

Correct Answer
verified

Which of the following factors is the most significant in determining the pattern of international trade?

Correct Answer
verified

Which of the following is not a type of trade restriction?

Correct Answer
verified

Which of the following is not a problem with trade restrictions?

Correct Answer
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Which country is the United States' largest trading partner?

Correct Answer
verified

International trade between countries typically produces a winner and a loser.Generally, it is the economically more advanced country that gains at the expense of the less developed nation.

Correct Answer
verified

Correct Answer
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Exhibit 19-8 If the country in Exhibit 19-8 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,

Correct Answer
verified

Exhibit 19-4 In Exhibit 19-4, if the world price of tulips is $1 and there are no trade restrictions, The Netherlands will

Correct Answer
verified

Absolute advantage

Correct Answer
verified

A nation's consumption possibilities frontier is

Correct Answer
verified

An import quota is a

Correct Answer
verified

Revenue from a(n) goes to the U.S.government while revenue from a(n) goes to whomever secures the right to sell foreign goods in the U.S.market.

Correct Answer
verified

If production is subject to economies of scale,

Correct Answer
verified

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true with regard to opportunity costs in the two countries?

Correct Answer
verified

Exam 19: International Trade

Low wages may be traceable to all of the following except one.Which is the exception?

Correct AnswerverifiedShow Answer

A country will import a good only if

Correct AnswerverifiedShow Answer

A tax on imports equal to a percentage of the cost of those imports is known as

Correct AnswerverifiedShow Answer

Exhibit 19-1 Exhibit 19-1 shows the production possibilities frontiers for the countries of Lambda and Beta for fish and coconuts.What is the opportunity cost of a coconut in Lambda?

Correct AnswerverifiedShow Answer

The General Agreement on Tariffs and Trade (GATT) was established in

Correct AnswerverifiedShow Answer

Under a tariff, the domestic government gains revenue, but under an import quota it does not, unless it sells the quota rights.

Correct AnswerverifiedShow Answer

Which of the following factors is the most significant in determining the pattern of international trade?

Correct AnswerverifiedShow Answer

Which of the following is not a type of trade restriction?

Correct AnswerverifiedShow Answer

Which of the following is not a problem with trade restrictions?

Correct AnswerverifiedShow Answer

Which country is the United States' largest trading partner?

Correct AnswerverifiedShow Answer

International trade between countries typically produces a winner and a loser.Generally, it is the economically more advanced country that gains at the expense of the less developed nation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Exhibit 19-8 If the country in Exhibit 19-8 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,

Correct AnswerverifiedShow Answer

Exhibit 19-4 In Exhibit 19-4, if the world price of tulips is $1 and there are no trade restrictions, The Netherlands will

Correct AnswerverifiedShow Answer

Absolute advantage

Correct AnswerverifiedShow Answer

A nation's consumption possibilities frontier is

Correct AnswerverifiedShow Answer

An import quota is a

Correct AnswerverifiedShow Answer

Revenue from a(n) __________ goes to the U.S.government while revenue from a(n) __________ goes to whomever secures the right to sell foreign goods in the U.S.market.

Correct AnswerverifiedShow Answer

If production is subject to economies of scale,

Correct AnswerverifiedShow Answer

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true with regard to opportunity costs in the two countries?

Correct AnswerverifiedShow Answer

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Revenue from a(n) goes to the U.S.government while revenue from a(n) goes to whomever secures the right to sell foreign goods in the U.S.market.

Correct Answer
verified

Correct Answer
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Correct Answer
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