Question 1

A government-imposed restriction on the quantity of a specific good that may be imported to and sold in the United States is called a

Accepted Answer

A) tariff system. 
B) quota system. 
C) reverse-trade system. 
D) union trade system. 
A) tariff system. 
B) quota system. 
C) reverse-trade system. 
D) union trade system.

Question 2

If the infant industry argument is used to protect an industry that has already matured, then

Accepted Answer

A) consumers lose because they will pay a price for a product that is above the world price. 
B) consumers lose because they will pay a price for a product, which is less than the world price. 
C) stockholders lose because the firm cannot compete with other firms. 
D) no one loses. 
A) consumers lose because they will pay a price for a product that is above the world price. 
B) consumers lose because they will pay a price for a product, which is less than the world price. 
C) stockholders lose because the firm cannot compete with other firms. 
D) no one loses.

Question 3

Maximum Feasible Hourly Production Rates of Either
Computers or Bicycles Using All Available Resources
Product United States Mexico
Computers 8 3
Bicycles 2 6
-Refer to the above table. Assuming that opportunity costs are constant, which of the following is a correct statement?

Accepted Answer

A) The United States has a comparative advantage in computers. 
B) The United States has a comparative advantage in bicycles. 
C) Mexico has a comparative advantage in computers. 
D) Mexico has a comparative advantage in both goods. 
A) The United States has a comparative advantage in computers. 
B) The United States has a comparative advantage in bicycles. 
C) Mexico has a comparative advantage in computers. 
D) Mexico has a comparative advantage in both goods.

Question 4

Which of the following statements is FALSE?

Accepted Answer

A) When it comes to overall productive efficiency, compared to Japan, Germany and the rest of the European Union, the United States lags far behind. 
B) Sophisticated financial systems have given U.S. productive efficiency a boost. 
C) The United States' international competitive position has been helped by its long history of widespread entrepreneurship. 
D) Economic restructuring and investments in information technology have added to productive efficiency in the United States. 
A) When it comes to overall productive efficiency, compared to Japan, Germany and the rest of the European Union, the United States lags far behind. 
B) Sophisticated financial systems have given U.S. productive efficiency a boost. 
C) The United States' international competitive position has been helped by its long history of widespread entrepreneurship. 
D) Economic restructuring and investments in information technology have added to productive efficiency in the United States.

Question 5

All of the following are reasons that trade between nations is beneficial EXCEPT

Accepted Answer

A) gains from specialization. 
B) exchange of ideas. 
C) protection of domestic industries. 
D) gains from trade. 
A) gains from specialization. 
B) exchange of ideas. 
C) protection of domestic industries. 
D) gains from trade.

Question 6

A tariff placed on a foreign good will

Accepted Answer

A) reduce the price of a competing domestic good. 
B) increase the price of a competing domestic good. 
C) increase the quantity sold of both the foreign and competing domestic good. 
D) reduce the quantity sold of both the foreign and competing domestic good. 
A) reduce the price of a competing domestic good. 
B) increase the price of a competing domestic good. 
C) increase the quantity sold of both the foreign and competing domestic good. 
D) reduce the quantity sold of both the foreign and competing domestic good.

Question 7

Which of the following is NOT a benefit of international trade?

Accepted Answer

A) It increases overall output. 
B) It results in a transmission of ideas. 
C) It promotes self-sufficiency. 
D) It results in the transmission of new processes. 
A) It increases overall output. 
B) It results in a transmission of ideas. 
C) It promotes self-sufficiency. 
D) It results in the transmission of new processes.

Question 8

Maximum Feasible Hourly Production Rates of Either
Computers or Bicycles Using All Available Resources
Product United States Mexico
Computers 8 3
Bicycles 2 6
-Refer to the above table. Assuming that opportunity costs are constant, the opportunity cost of producing a computer in the United States is equal to ________, and the opportunity cost of producing a computer in Mexico is ________.

Accepted Answer

A) 4 bicycles; 0.5 bicycles 
B) 0.25 bicycle; 2 bicycles 
C) 2.67 computers; 0.33 bicycles 
D) 0.375 bicycle; 3 computers 
A) 4 bicycles; 0.5 bicycles 
B) 0.25 bicycle; 2 bicycles 
C) 2.67 computers; 0.33 bicycles 
D) 0.375 bicycle; 3 computers

Question 9

Free trade policies may lead to

Accepted Answer

A) a decrease in world output. 
B) price increases in world markets. 
C) some labor sectors experiencing some short-term job loss. 
D) none of the above. 
A) a decrease in world output. 
B) price increases in world markets. 
C) some labor sectors experiencing some short-term job loss. 
D) none of the above.

Question 10

The WTO replaced the GATT in

Accepted Answer

A) 1900. 
B) 1945. 
C) 1960. 
D) 1995. 
A) 1900. 
B) 1945. 
C) 1960. 
D) 1995.

Question 11

What is GATT and what happened to tariff rates as a result of GATT?

Accepted Answer

GATT is the General Agreement on Tariffs

Question 12

The infant industry argument says that

Accepted Answer

A) tariffs should be imposed to allow a new industry in a country to get established. 
B) dumping should be allowed in order to establish a presence of an industry that has previously not had a presence in another country. 
C) countries should produce and trade goods according to their comparative advantage. 
D) imports should target new products from other countries to take advantage of the transmission of new ideas. 
A) tariffs should be imposed to allow a new industry in a country to get established. 
B) dumping should be allowed in order to establish a presence of an industry that has previously not had a presence in another country. 
C) countries should produce and trade goods according to their comparative advantage. 
D) imports should target new products from other countries to take advantage of the transmission of new ideas.

Question 13

Given two economic systems, A and B, if economy A has a comparative advantage in the production of widgets, then

Accepted Answer

A) the inputs necessary to produce widgets in economy A cost less than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of some goods than economy B. 
D) economy A would not benefit from the specialization of production. 
A) the inputs necessary to produce widgets in economy A cost less than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of some goods than economy B. 
D) economy A would not benefit from the specialization of production.

A government-imposed restriction on the quantity of a specific good that may be imported to and sold in the United States is called a

If the infant industry argument is used to protect an industry that has already matured, then

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product United States Mexico Computers 8 3 Bicycles 2 6 -Refer to the above table. Assuming that opportunity costs are constant, which of the following is a correct statement?

Which of the following statements is FALSE?

All of the following are reasons that trade between nations is beneficial EXCEPT

A tariff placed on a foreign good will

Which of the following is NOT a benefit of international trade?

Free trade policies may lead to

The WTO replaced the GATT in

What is GATT and what happened to tariff rates as a result of GATT?

The infant industry argument says that

Given two economic systems, A and B, if economy A has a comparative advantage in the production of widgets, then

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Exchange Rates and the Balance of Payments

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Exam 32: Comparative Advantage and the Open Economy

A government-imposed restriction on the quantity of a specific good that may be imported to and sold in the United States is called a

If the infant industry argument is used to protect an industry that has already matured, then

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product United States Mexico Computers 8 3 Bicycles 2 6 -Refer to the above table. Assuming that opportunity costs are constant, which of the following is a correct statement?

Which of the following statements is FALSE?

All of the following are reasons that trade between nations is beneficial EXCEPT

A tariff placed on a foreign good will

Which of the following is NOT a benefit of international trade?

Free trade policies may lead to

The WTO replaced the GATT in

What is GATT and what happened to tariff rates as a result of GATT?

The infant industry argument says that

Given two economic systems, A and B, if economy A has a comparative advantage in the production of widgets, then

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Exchange Rates and the Balance of Payments

Filters