Question 1

Dumping typically occurs as long as the foreign producer sells its output at a price

Accepted Answer

A) above its total costs. 
B) below its average total costs but above its average variable costs. 
C) below its average variable costs. 
D) above its average fixed costs but below its total variable costs. 
A) above its total costs. 
B) below its average total costs but above its average variable costs. 
C) below its average variable costs. 
D) above its average fixed costs but below its total variable costs.

Question 2

The net effect of regional trade agreements has been

Accepted Answer

A) an increase in the total amount of trade in the world. 
B) a decrease in the total amount of trade in the world. 
C) no change in the total amount of trade in the world. 
D) either an increase or decrease in the amount of trade in the world, depending on where trade takes place. 
A) an increase in the total amount of trade in the world. 
B) a decrease in the total amount of trade in the world. 
C) no change in the total amount of trade in the world. 
D) either an increase or decrease in the amount of trade in the world, depending on where trade takes place.

Question 3

Maximum Feasible Hourly Production Rates of Either
Cuckoo Clocks or Movies Using All Available Resources
Product United States Switzerland
Cuckoo Clocks 4 2
Movies 10 4
-Refer to the above table. If opportunity costs are constant, residents of the United States will gain from specializing and trading with Switzerland if the

Accepted Answer

A) produce both clocks and films and export clocks to Switzerland. 
B) produce both clocks and films and export both to Switzerland. 
C) import films and export clocks to Switzerland. 
D) import clocks and export films. 
A) produce both clocks and films and export clocks to Switzerland. 
B) produce both clocks and films and export both to Switzerland. 
C) import films and export clocks to Switzerland. 
D) import clocks and export films.

Question 4

Discuss the relationship between world trade and world Gross Domestic Product (GDP)since the early 1950s.

Accepted Answer

Both world trade and world GDP have grow

Question 5

The ability to produce a good or service at a lower opportunity cost than other producers is called

Accepted Answer

A) absolute advantage. 
B) comparative advantage. 
C) implicit advantage. 
D) marginal advantage. 
A) absolute advantage. 
B) comparative advantage. 
C) implicit advantage. 
D) marginal advantage.

Question 6

Restrictions on imports

Accepted Answer

A) usually have no permanent effects on an economy. 
B) is the best way to increase exports. 
C) protect United States jobs. 
D) eventually reduce exports. 
A) usually have no permanent effects on an economy. 
B) is the best way to increase exports. 
C) protect United States jobs. 
D) eventually reduce exports.

Question 7

Maximum Feasible Hourly Production Rates (in Tons)of Either
Cookies or Coffee Using All Available Resources
Product Country Alpha Country Beta
Cookies 3 8
Coffee 9 4
-Use the above table. If these two countries, Alpha and Beta, specialize based on comparative advantage

Accepted Answer

A) Alpha will specialize in cookies, and Beta will specialize in coffee production. 
B) Alpha will specialize in producing both items. 
C) Beta will specialize in producing both items. 
D) Alpha will specialize in coffee, and Beta will specialize in cookies. 
A) Alpha will specialize in cookies, and Beta will specialize in coffee production. 
B) Alpha will specialize in producing both items. 
C) Beta will specialize in producing both items. 
D) Alpha will specialize in coffee, and Beta will specialize in cookies.

Question 8

Dumping occurs when, in a foreign market, a good is sold

Accepted Answer

A) below its cost of production or below the price in that market. 
B) at a discount below the list price. 
C) below its nominal price. 
D) at a price above the equilibrium price. 
A) below its cost of production or below the price in that market. 
B) at a discount below the list price. 
C) below its nominal price. 
D) at a price above the equilibrium price.

Question 9

The North American Free Trade Agreement and the European Union are examples of

Accepted Answer

A) defense treaties. 
B) regional trade blocs. 
C) labor agreements designed only for industrialized countries. 
D) agriculturally based economies. 
A) defense treaties. 
B) regional trade blocs. 
C) labor agreements designed only for industrialized countries. 
D) agriculturally based economies.

Question 10

Maximum Feasible Hourly Production Rates (in Tons)of Either
Wine or Beef Using All Available Resources
Product Argentina France
Wine (gallons)30 60
Beef (pounds)10 30
-Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can produce a maximum of eight pies or two cakes in a day. Ethel has an comparative advantage in the production of

Accepted Answer

A) cakes. 
B) pies. 
C) both cakes and pies. 
D) neither cakes nor pies. 
A) cakes. 
B) pies. 
C) both cakes and pies. 
D) neither cakes nor pies.

Question 11

When nations specialize according to their comparative advantage

Accepted Answer

A) Total production and consumption in the world increase. 
B) Consumption rises in one country but must fall in all others. 
C) Total world production rises but total consumption in the world declines. 
D) none of the above 
A) Total production and consumption in the world increase. 
B) Consumption rises in one country but must fall in all others. 
C) Total world production rises but total consumption in the world declines. 
D) none of the above

Question 12

In comparing tariffs and quotas, we know that

Accepted Answer

A) neither raises revenues for the federal government. 
B) both raise revenues for the federal government. 
C) tariffs raise revenues for the federal government, while quotas do not. 
D) quotas raise revenues for the federal government, while tariffs do not. 
A) neither raises revenues for the federal government. 
B) both raise revenues for the federal government. 
C) tariffs raise revenues for the federal government, while quotas do not. 
D) quotas raise revenues for the federal government, while tariffs do not.

Question 13

A tax placed on imports is known as

Accepted Answer

A) voluntary restraint agreement. 
B) tariff. 
C) quota. 
D) infant industry. 
A) voluntary restraint agreement. 
B) tariff. 
C) quota. 
D) infant industry.

Question 14

Suppose that the opportunity cost of producing goods differs between two nations. We can correctly state that

Accepted Answer

A) the two nations should not specialize in the production of goods. 
B) specialization can lead to an increase in the production of all goods. 
C) specialization can lead to an increase in the consumption of all goods. 
D) neither country has a comparative advantage in the production of any good. 
A) the two nations should not specialize in the production of goods. 
B) specialization can lead to an increase in the production of all goods. 
C) specialization can lead to an increase in the consumption of all goods. 
D) neither country has a comparative advantage in the production of any good.

Question 15

In 1990, there were 50 bilateral agreements and regional trade agreements between countries. Today there are

Accepted Answer

A) more than 230 of these agreements. 
B) 30 of these agreements. 
C) none of these agreements remaining. 
D) more than 10,000 of these agreements. 
A) more than 230 of these agreements. 
B) 30 of these agreements. 
C) none of these agreements remaining. 
D) more than 10,000 of these agreements.

Question 16

Maximum Feasible Hourly Production Rates (in Tons)of Either
Wine or Beef Using All Available Resources
Product Argentina France
Wine (gallons)30 60
Beef (pounds)10 30
-An effect of international trade is

Accepted Answer

A) the increase in the average price of goods as the cost of transportation has to be included. 
B) the transmission of ideas around the world. 
C) that only countries that have absolute advantage in producing a good can participate. 
D) that the United States has a trade surplus. 
A) the increase in the average price of goods as the cost of transportation has to be included. 
B) the transmission of ideas around the world. 
C) that only countries that have absolute advantage in producing a good can participate. 
D) that the United States has a trade surplus.

Question 17

The infant industry argument suggests that

Accepted Answer

A) a country requires tariff protection when it has no comparative advantage in the production of any good. 
B) a country requires protection against unfair trade practices. 
C) an industry may require temporary tariff protection until the industry matures. 
D) the industry has no potential and must be protected to survive. 
A) a country requires tariff protection when it has no comparative advantage in the production of any good. 
B) a country requires protection against unfair trade practices. 
C) an industry may require temporary tariff protection until the industry matures. 
D) the industry has no potential and must be protected to survive.

Question 18

The organization that settles trade disputes between countries is the

Accepted Answer

A) World Bank. 
B) World Trade Organization. 
C) International Monetary Fund. 
D) United Nations. 
A) World Bank. 
B) World Trade Organization. 
C) International Monetary Fund. 
D) United Nations.

Question 19

Consider a world of two countries producing only wheat and cloth. In one hour, residents of Country A can produce 1 unit of wheat and 0.5 unit of cloth, whereas residents of Country B can produce 0.3 unit of wheat and 0.4 unit of cloth. Country A should export

Accepted Answer

A) wheat and cloth; country B should not export anything. 
B) wheat and country B should export cloth. 
C) nothing and country B should export both wheat and cloth. 
D) cloth and country B should export wheat. 
A) wheat and cloth; country B should not export anything. 
B) wheat and country B should export cloth. 
C) nothing and country B should export both wheat and cloth. 
D) cloth and country B should export wheat.

Question 20

Maximum Feasible Hourly Production Rates (in Tons)of Either
Wine or Beef Using All Available Resources
Product Argentina France
Wine (gallons)30 60
Beef (pounds)10 30
-Use the above table. Assuming constant opportunity costs, if Argentina and France specialize based on comparative advantage, then they will trade if the rate of exchange

Accepted Answer

A) is 2.5 gallons of wine for 1 pound of beef, and Argentina imports beef. 
B) 4 gallons of wine for 1 pound of beef, and France imports beef. 
C) 0.2 pound of beef for 1 gallon of wine, and Argentina imports wine. 
D) 8 pounds of beef for 1 gallon of wine, and France imports wine. 
A) is 2.5 gallons of wine for 1 pound of beef, and Argentina imports beef. 
B) 4 gallons of wine for 1 pound of beef, and France imports beef. 
C) 0.2 pound of beef for 1 gallon of wine, and Argentina imports wine. 
D) 8 pounds of beef for 1 gallon of wine, and France imports wine.

Dumping typically occurs as long as the foreign producer sells its output at a price

The net effect of regional trade agreements has been

Discuss the relationship between world trade and world Gross Domestic Product (GDP)since the early 1950s.

The ability to produce a good or service at a lower opportunity cost than other producers is called

Restrictions on imports

Maximum Feasible Hourly Production Rates (in Tons)of Either Cookies or Coffee Using All Available Resources Product Country Alpha Country Beta Cookies 3 8 Coffee 9 4 -Use the above table. If these two countries, Alpha and Beta, specialize based on comparative advantage

Dumping occurs when, in a foreign market, a good is sold

The North American Free Trade Agreement and the European Union are examples of

When nations specialize according to their comparative advantage

In comparing tariffs and quotas, we know that

A tax placed on imports is known as

Suppose that the opportunity cost of producing goods differs between two nations. We can correctly state that

In 1990, there were 50 bilateral agreements and regional trade agreements between countries. Today there are

Maximum Feasible Hourly Production Rates (in Tons)of Either Wine or Beef Using All Available Resources Product Argentina France Wine (gallons)30 60 Beef (pounds)10 30 -An effect of international trade is

The infant industry argument suggests that

The organization that settles trade disputes between countries is the

Consider a world of two countries producing only wheat and cloth. In one hour, residents of Country A can produce 1 unit of wheat and 0.5 unit of cloth, whereas residents of Country B can produce 0.3 unit of wheat and 0.4 unit of cloth. Country A should export

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

Dumping typically occurs as long as the foreign producer sells its output at a price

The net effect of regional trade agreements has been

Discuss the relationship between world trade and world Gross Domestic Product (GDP)since the early 1950s.

The ability to produce a good or service at a lower opportunity cost than other producers is called

Restrictions on imports

Maximum Feasible Hourly Production Rates (in Tons)of Either Cookies or Coffee Using All Available Resources Product Country Alpha Country Beta Cookies 3 8 Coffee 9 4 -Use the above table. If these two countries, Alpha and Beta, specialize based on comparative advantage

Dumping occurs when, in a foreign market, a good is sold

The North American Free Trade Agreement and the European Union are examples of

When nations specialize according to their comparative advantage

In comparing tariffs and quotas, we know that

A tax placed on imports is known as

Suppose that the opportunity cost of producing goods differs between two nations. We can correctly state that

In 1990, there were 50 bilateral agreements and regional trade agreements between countries. Today there are

Maximum Feasible Hourly Production Rates (in Tons)of Either Wine or Beef Using All Available Resources Product Argentina France Wine (gallons)30 60 Beef (pounds)10 30 -An effect of international trade is

The infant industry argument suggests that

The organization that settles trade disputes between countries is the

Consider a world of two countries producing only wheat and cloth. In one hour, residents of Country A can produce 1 unit of wheat and 0.5 unit of cloth, whereas residents of Country B can produce 0.3 unit of wheat and 0.4 unit of cloth. Country A should export

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