Question 1

The process of countries becoming more open to foreign trade and investment is known as

Accepted Answer

A) autarky. 
B) foreign exchange. 
C) globalization. 
D) protectionism. 
A) autarky. 
B) foreign exchange. 
C) globalization. 
D) protectionism.

Question 2

Figure 9-2
   
Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.With the tariff in place, the United States consumes

Accepted Answer

A) 9 million pounds of rice. 
B) 15 million pounds of rice. 
C) 31 million pounds of rice. 
D) 42 million pounds of rice. 
A) 9 million pounds of rice. 
B) 15 million pounds of rice. 
C) 31 million pounds of rice. 
D) 42 million pounds of rice.

Question 3

Which of the following describes the infant industry argument for protectionism?

Accepted Answer

A) An industry must be protected in its early stages of development so that firms can compete with government-subsidized foreign competition. 
B) Some strategic industries must be protected to ensure adequate supplies of resources needed for national defense in emergencies. 
C) Domestic producers in high-wage countries must be protected from foreign producers in low-wage countries to produce a level playing field. 
D) Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets. 
A) An industry must be protected in its early stages of development so that firms can compete with government-subsidized foreign competition. 
B) Some strategic industries must be protected to ensure adequate supplies of resources needed for national defense in emergencies. 
C) Domestic producers in high-wage countries must be protected from foreign producers in low-wage countries to produce a level playing field. 
D) Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets.

Question 4

Figure 9-1
   
Figure 9-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of domestic producer surplus?

Accepted Answer

A) $0 
B) $40 
C) $320 
D) $360 
A) $0 
B) $40 
C) $320 
D) $360

Question 5

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   
Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.Which country has a comparative advantage in producing clocks?

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country 
A) Denmark 
B) Belize 
C) both countries 
D) neither country

Question 6

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

Accepted Answer

A) Governments always make the level of protection for infant industries too high. 
B) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. 
C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue). 
D) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never "growing up." 
A) Governments always make the level of protection for infant industries too high. 
B) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. 
C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue). 
D) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never "growing up."

Question 7

By 2016, the U.S.trade deficit with China

Accepted Answer

A) had fallen to almost zero. 
B) was nearly $300 billion. 
C) had decreased to the same level of the early 2000s. 
D) had become a trade surplus. 
A) had fallen to almost zero. 
B) was nearly $300 billion. 
C) had decreased to the same level of the early 2000s. 
D) had become a trade surplus.

Question 8

A quota is the same as a voluntary export restraint.

Accepted Answer

A) True 
 B)False

Question 9

________ refers to reductions in a firm's costs that result from an increase in the size of an industry.

Accepted Answer

A) Internal economies 
B) External economies 
C) Autarkic dominance 
D) Streamlining 
A) Internal economies 
B) External economies 
C) Autarkic dominance 
D) Streamlining

Question 10

Table 9-2
   
Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Sarita has an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B) Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C) Sarita has an absolute advantage in baking pies and cakes. 
D) Gabriel has an absolute advantage in baking pies and cakes. 
A) Sarita has an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B) Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C) Sarita has an absolute advantage in baking pies and cakes. 
D) Gabriel has an absolute advantage in baking pies and cakes.

Question 11

Today, the United States charges an average tariff rate

Accepted Answer

A) that is more than its average tariff rate in 1930. 
B) which is greater than any other high-income country. 
C) of less than 1.5 percent. 
D) that exceeds 50 percent. 
A) that is more than its average tariff rate in 1930. 
B) which is greater than any other high-income country. 
C) of less than 1.5 percent. 
D) that exceeds 50 percent.

Question 12

Which of the following is not an example of a trade restriction?

Accepted Answer

A) tariffs 
B) quotas and voluntary export restraints 
C) legislation requiring that cars sold in a country have a 50 percent domestic content 
D) consumer preferences for goods produced domestically 
A) tariffs 
B) quotas and voluntary export restraints 
C) legislation requiring that cars sold in a country have a 50 percent domestic content 
D) consumer preferences for goods produced domestically

Question 13

Protectionism

Accepted Answer

A) is the use of cheap labor to protect firms from paying high wages. 
B) is the use of trade barriers to protect domestic firms from foreign competition. 
C) refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D) refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts. 
A) is the use of cheap labor to protect firms from paying high wages. 
B) is the use of trade barriers to protect domestic firms from foreign competition. 
C) refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D) refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts.

Question 14

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that

Accepted Answer

A) Bulgaria also has an absolute advantage in producing sandals relative to Finland. 
B) Bulgaria has a lower opportunity cost of producing sandals relative to Finland. 
C) Finland has an absolute disadvantage in producing sandals relative to Bulgaria. 
D) labor costs are higher for sandal producers in Finland than in Bulgaria. 
A) Bulgaria also has an absolute advantage in producing sandals relative to Finland. 
B) Bulgaria has a lower opportunity cost of producing sandals relative to Finland. 
C) Finland has an absolute disadvantage in producing sandals relative to Bulgaria. 
D) labor costs are higher for sandal producers in Finland than in Bulgaria.

Question 15

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   
Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.Which country has an absolute advantage in producing hats?

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country 
A) Denmark 
B) Belize 
C) both countries 
D) neither country

Question 16

Figure 9-2
   
Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.If the tariff was replaced by a quota which limited rice imports to 16 million pounds, the amount of additional revenue received by rice importers would equal

Accepted Answer

A) $6.4 million. 
B) $9.6 million. 
C) $16 million. 
D) $19.8 million. 
A) $6.4 million. 
B) $9.6 million. 
C) $16 million. 
D) $19.8 million.

Question 17

Absolute advantage is

Accepted Answer

A) the ability to produce more of a good or service than competitors when using the same amount of resources. 
B) the ability to produce higher quality goods compared to one's competitors. 
C) the ability to produce a good or service at a higher opportunity cost than one's competitors. 
D) the ability to produce more of a good or service than competitors that have fewer resources. 
A) the ability to produce more of a good or service than competitors when using the same amount of resources. 
B) the ability to produce higher quality goods compared to one's competitors. 
C) the ability to produce a good or service at a higher opportunity cost than one's competitors. 
D) the ability to produce more of a good or service than competitors that have fewer resources.

Question 18

Figure 9-1
   
Figure 9-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 9-1.Under autarky, the producer surplus is

Accepted Answer

A) $40. 
B) $105. 
C) $195. 
D) $285. 
A) $40. 
B) $105. 
C) $195. 
D) $285.

Question 19

A situation in which a country does not trade with other countries is called

Accepted Answer

A) autarky. 
B) self-actualization. 
C) autonomy. 
D) independence. 
A) autarky. 
B) self-actualization. 
C) autonomy. 
D) independence.

Question 20

The United States is a leading exporter of wheat.What explains the source of the comparative advantage of the United States in wheat production?

Accepted Answer

A) positive externalities 
B) investment by multinational firms such as Archer-Daniels-Midland and Tyson Foods Inc. 
C) climate and soil conditions in the United States which are well-suited for wheat production 
D) a large supply of unskilled labor 
A) positive externalities 
B) investment by multinational firms such as Archer-Daniels-Midland and Tyson Foods Inc. 
C) climate and soil conditions in the United States which are well-suited for wheat production 
D) a large supply of unskilled labor

The process of countries becoming more open to foreign trade and investment is known as

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.With the tariff in place, the United States consumes

Which of the following describes the infant industry argument for protectionism?

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of domestic producer surplus?

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

By 2016, the U.S.trade deficit with China

A quota is the same as a voluntary export restraint.

________ refers to reductions in a firm's costs that result from an increase in the size of an industry.

Table 9-2 Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Today, the United States charges an average tariff rate

Which of the following is not an example of a trade restriction?

Protectionism

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that

Absolute advantage is

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky, the producer surplus is

A situation in which a country does not trade with other countries is called

The United States is a leading exporter of wheat.What explains the source of the comparative advantage of the United States in wheat production?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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Exam 9: Comparative Advantage and the Gains From International Trade

The process of countries becoming more open to foreign trade and investment is known as

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.With the tariff in place, the United States consumes

Which of the following describes the infant industry argument for protectionism?

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of domestic producer surplus?

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

By 2016, the U.S.trade deficit with China

A quota is the same as a voluntary export restraint.

________ refers to reductions in a firm's costs that result from an increase in the size of an industry.

Table 9-2 Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Today, the United States charges an average tariff rate

Which of the following is not an example of a trade restriction?

Protectionism

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that

Absolute advantage is

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky, the producer surplus is

A situation in which a country does not trade with other countries is called

The United States is a leading exporter of wheat.What explains the source of the comparative advantage of the United States in wheat production?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters