Question 1

The welfare loss from an import quota is greater than that of an equivalent tariff because

Accepted Answer

A) tariff revenues can be used to society's benefit. 
B) the loss in consumer surplus is not as large. 
C) domestic producers gain more from a quota than from a tariff. 
D) tariff revenues represent an additional deadweight loss. 
A) tariff revenues can be used to society's benefit. 
B) the loss in consumer surplus is not as large. 
C) domestic producers gain more from a quota than from a tariff. 
D) tariff revenues represent an additional deadweight loss. A

Question 2

Which of the following is likely to decrease the exchange rate of Yen to euros (¥/€)?

Accepted Answer

A) An increase in investment opportunities in the U.S. 
B) A decrease in investment opportunities in the eurozone 
C) A decrease in demand for European goods in Japan 
D) An increase in investment opportunities in the eurozone 
A) An increase in investment opportunities in the U.S. 
B) A decrease in investment opportunities in the eurozone 
C) A decrease in demand for European goods in Japan 
D) An increase in investment opportunities in the eurozone D

Question 3

If an Albanian company hires a U.S.-based law firm, it is

Accepted Answer

A) insourcing, from a U.S. perspective. 
B) using domestic outsourcing. 
C) changing into a multinational enterprise. 
D) vertically integrating. 
A) insourcing, from a U.S. perspective. 
B) using domestic outsourcing. 
C) changing into a multinational enterprise. 
D) vertically integrating. A

Question 4

If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then the U.S. has

Accepted Answer

A) a comparative advantage in the production of beer. 
B) an absolute advantage in the production of beer. 
C) a comparative advantage in the production of pizza. 
D) a comparative advantage in the production of beer and pizza. 
A) a comparative advantage in the production of beer. 
B) an absolute advantage in the production of beer. 
C) a comparative advantage in the production of pizza. 
D) a comparative advantage in the production of beer and pizza.

Question 5

The North American Free Trade Agreement is an example of

Accepted Answer

A) a beggar-thy-neighbor trade policy. 
B) a preferential trade arrangement. 
C) a multinational quota system. 
D) a general agreement on tariffs and trade. 
A) a beggar-thy-neighbor trade policy. 
B) a preferential trade arrangement. 
C) a multinational quota system. 
D) a general agreement on tariffs and trade.

Question 6

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S1 represents the world supply curve. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of

Accepted Answer

A) 10 units. 
B) 20 units. 
C) 30 units. 
D) 40 units. 
A) 10 units. 
B) 20 units. 
C) 30 units. 
D) 40 units.

Question 7

Tariffs and quotas create a loss in social welfare because

Accepted Answer

A) producer surplus declines. 
B) revenues from tariffs are misspent. 
C) consumer surplus declines. 
D) All of the above. 
A) producer surplus declines. 
B) revenues from tariffs are misspent. 
C) consumer surplus declines. 
D) All of the above.

Question 8

If a foreign producer sells a good in a country at a lower price than in its home market, this is called

Accepted Answer

A) a countervailing duty. 
B) a tariff offset. 
C) dumping. 
D) a reverse tariff. 
A) a countervailing duty. 
B) a tariff offset. 
C) dumping. 
D) a reverse tariff.

Question 9

Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?

Accepted Answer

A) An increase in investment opportunities in the U.S. 
B) A decrease in investment opportunities in the eurozone 
C) An increase in demand for European goods in Japan 
D) A decrease in demand for European goods in Japan 
A) An increase in investment opportunities in the U.S. 
B) A decrease in investment opportunities in the eurozone 
C) An increase in demand for European goods in Japan 
D) A decrease in demand for European goods in Japan

Question 10

Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?

Accepted Answer

A) A decrease in investment opportunities in the U.S. 
B) A decrease in investment opportunities in the eurozone 
C) An increase in demand for European goods in Japan 
D) An increase in investment opportunities in the eurozone 
A) A decrease in investment opportunities in the U.S. 
B) A decrease in investment opportunities in the eurozone 
C) An increase in demand for European goods in Japan 
D) An increase in investment opportunities in the eurozone

Question 11

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S1 represents the world supply curve. Suppose a free market exists. The smallest tariff necessary to completely eliminate imported rice is

Accepted Answer

A) $1 per unit. 
B) $2 per unit. 
C) $3 per unit. 
D) $4 per unit. 
A) $1 per unit. 
B) $2 per unit. 
C) $3 per unit. 
D) $4 per unit.

Question 12

Outsourcing generally results from

Accepted Answer

A) unpatriotic behavior. 
B) comparative advantage. 
C) tax evasion. 
D) rent seeking. 
A) unpatriotic behavior. 
B) comparative advantage. 
C) tax evasion. 
D) rent seeking.

Question 13

According to the mini-case on the Barbie Doll, Mattel is successful because

Accepted Answer

A) it has been selling Barbie dolls for a long time. 
B) the Barbie doll is the top import into the U.S. 
C) international trade allows them to produce a wide variety of doll types at many price points. 
D) there are low fixed costs for product design. 
A) it has been selling Barbie dolls for a long time. 
B) the Barbie doll is the top import into the U.S. 
C) international trade allows them to produce a wide variety of doll types at many price points. 
D) there are low fixed costs for product design.

Question 14

Compared to free trade, a ban on imports of a good

Accepted Answer

A) increases the domestic price of the good. 
B) decreases consumer surplus. 
C) results in a deadweight loss. 
D) All of the above. 
A) increases the domestic price of the good. 
B) decreases consumer surplus. 
C) results in a deadweight loss. 
D) All of the above.

Question 15

The imposition of a quota on an imported good

Accepted Answer

A) shifts the demand curve down for the good. 
B) shifts the supply curve up for the good. 
C) Both A and B. 
D) Not enough information to determine. 
A) shifts the demand curve down for the good. 
B) shifts the supply curve up for the good. 
C) Both A and B. 
D) Not enough information to determine.

Question 16

The ability to produce a good at a lower opportunity cost than someone else is called

Accepted Answer

A) competitive production. 
B) comparative advantage. 
C) selective advantage. 
D) absolute advantage. 
A) competitive production. 
B) comparative advantage. 
C) selective advantage. 
D) absolute advantage.

Question 17

The larger the U.S. imposed per unit import tariff on a good imported and that is also produced in the U.S.

Accepted Answer

A) the smaller the U.S consumer surplus. 
B) the larger the U.S. producer surplus. 
C) government revenue may be larger or smaller. 
D) All of the above. 
A) the smaller the U.S consumer surplus. 
B) the larger the U.S. producer surplus. 
C) government revenue may be larger or smaller. 
D) All of the above.

Question 18

If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are no transaction costs, and the exchange rate is 10 rand/US$, then

Accepted Answer

A) there is an arbitrage opportunity by buying the wine in the U.S., and selling it in South Africa and the price in South Africa will drop. 
B) there is an arbitrage opportunity by buying the wine in the U.S., and selling it in South Africa and the price in the U.S. will drop. 
C) there is no arbitrage opportunity. 
D) Unable to determine, since France is in the eurozone and we would need exchange rates in euro terms. 
A) there is an arbitrage opportunity by buying the wine in the U.S., and selling it in South Africa and the price in South Africa will drop. 
B) there is an arbitrage opportunity by buying the wine in the U.S., and selling it in South Africa and the price in the U.S. will drop. 
C) there is no arbitrage opportunity. 
D) Unable to determine, since France is in the eurozone and we would need exchange rates in euro terms.

Question 19

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S1 represents the world supply curve. Currently 10 units are imported. The loss from shifting production from foreign to domestic producers equals

Accepted Answer

A) c + e. 
B) i. 
C) e. 
D) a + c + d + e. 
A) c + e. 
B) i. 
C) e. 
D) a + c + d + e.

Question 20

A firm that buys goods that it would normally produce internally from an international company is using

Accepted Answer

A) transfer pricing. 
B) insourcing. 
C) international outsourcing. 
D) domestic outsourcing. 
A) transfer pricing. 
B) insourcing. 
C) international outsourcing. 
D) domestic outsourcing.

The welfare loss from an import quota is greater than that of an equivalent tariff because

Which of the following is likely to decrease the exchange rate of Yen to euros (¥/€)?

If an Albanian company hires a U.S.-based law firm, it is

If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then the U.S. has

The North American Free Trade Agreement is an example of

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of

Tariffs and quotas create a loss in social welfare because

If a foreign producer sells a good in a country at a lower price than in its home market, this is called

Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?

Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. Suppose a free market exists. The smallest tariff necessary to completely eliminate imported rice is

Outsourcing generally results from

According to the mini-case on the Barbie Doll, Mattel is successful because

Compared to free trade, a ban on imports of a good

The imposition of a quota on an imported good

The ability to produce a good at a lower opportunity cost than someone else is called

The larger the U.S. imposed per unit import tariff on a good imported and that is also produced in the U.S.

If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are no transaction costs, and the exchange rate is 10 rand/US$, then

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. Currently 10 units are imported. The loss from shifting production from foreign to domestic producers equals

A firm that buys goods that it would normally produce internally from an international company is using

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Filters

Exam 17: Global Business

The welfare loss from an import quota is greater than that of an equivalent tariff because

Which of the following is likely to decrease the exchange rate of Yen to euros (¥/€)?

If an Albanian company hires a U.S.-based law firm, it is

If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then the U.S. has

The North American Free Trade Agreement is an example of

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S1 represents the world supply curve. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of

Tariffs and quotas create a loss in social welfare because

If a foreign producer sells a good in a country at a lower price than in its home market, this is called

Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?

Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S1 represents the world supply curve. Suppose a free market exists. The smallest tariff necessary to completely eliminate imported rice is

Outsourcing generally results from

According to the mini-case on the Barbie Doll, Mattel is successful because

Compared to free trade, a ban on imports of a good

The imposition of a quota on an imported good

The ability to produce a good at a lower opportunity cost than someone else is called

The larger the U.S. imposed per unit import tariff on a good imported and that is also produced in the U.S.

If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are no transaction costs, and the exchange rate is 10 rand/US$, then

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S1 represents the world supply curve. Currently 10 units are imported. The loss from shifting production from foreign to domestic producers equals

A firm that buys goods that it would normally produce internally from an international company is using

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Filters

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. Suppose a free market exists. The smallest tariff necessary to completely eliminate imported rice is

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. Currently 10 units are imported. The loss from shifting production from foreign to domestic producers equals