Question 1

In the United States, imports and exports make up more than half of GDP.

Accepted Answer

A) True 
 B)False  False

Question 2

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. A

Question 3

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.With trade, what is the total gain in clock production?

Accepted Answer

A) 150 
B) 300 
C) 2,100 
D) 2,250 
A) 150 
B) 300 
C) 2,100 
D) 2,250 A

Question 4

Which of the following is the best example of a quota?

Accepted Answer

A) a limit imposed on the number of sport utility vehicles that the United States can import from Japan 
B) a subsidy granted by the U.S. government to domestic sport utility vehicle manufacturers so they can compete more effectively with foreign sport utility vehicle manufacturers 
C) a tax placed on all sport utility vehicles sold in the domestic market 
D) a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States 
A) a limit imposed on the number of sport utility vehicles that the United States can import from Japan 
B) a subsidy granted by the U.S. government to domestic sport utility vehicle manufacturers so they can compete more effectively with foreign sport utility vehicle manufacturers 
C) a tax placed on all sport utility vehicles sold in the domestic market 
D) a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States

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.With trade, what is the total gain in hat production?

Accepted Answer

A) 150 
B) 300 
C) 400 
D) 650 
A) 150 
B) 300 
C) 400 
D) 650

Question 6

Under autarky, consumer surplus is represented by the area

Accepted Answer

A) above the supply curve and below the equilibrium price. 
B) above the supply curve and below the demand curve. 
C) below the demand curve and above the equilibrium price. 
D) above the demand curve and below the supply curve. 
A) above the supply curve and below the equilibrium price. 
B) above the supply curve and below the demand curve. 
C) below the demand curve and above the equilibrium price. 
D) above the demand curve and below the supply curve.

Question 7

A Federal Reserve publication proclaimed that "Trade is a win-win situation for all countries that participate." This statement is

Accepted Answer

A) false since it ignores the workers who lose their jobs as result of international trade. 
B) false since not all countries participate in international trade. 
C) true because it refers to countries; individuals may be losers as a result of international trade. 
D) true because all consumers and workers benefit from international trade. 
A) false since it ignores the workers who lose their jobs as result of international trade. 
B) false since not all countries participate in international trade. 
C) true because it refers to countries; individuals may be losers as a result of international trade. 
D) true because all consumers and workers benefit from international trade.

Question 8

Figure 9-3
   
Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.What is the area that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Accepted Answer

A) I + J 
B) E + I + J + M 
C) I + J + K+ L 
D) G + H + I + J 
A) I + J 
B) E + I + J + M 
C) I + J + K+ L 
D) G + H + I + J

Question 9

A consequence of increasing marginal costs of producing digital music players in Japan is

Accepted Answer

A) Japan will not export digital music players. 
B) Japan will stop short of complete specialization in the production of digital music players. 
C) Japan will import digital music players from countries that don't experience increasing marginal costs. 
D) Japan will likely impose trade restrictions on imported digital music players. 
A) Japan will not export digital music players. 
B) Japan will stop short of complete specialization in the production of digital music players. 
C) Japan will import digital music players from countries that don't experience increasing marginal costs. 
D) Japan will likely impose trade restrictions on imported digital music players.

Question 10

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.Prior to trade, what was the opportunity cost to produce 1 clock in Denmark?

Accepted Answer

A) 1/6 of a hat 
B) 2/3 of a hat 
C) 1.5 hats 
D) 6 hats 
A) 1/6 of a hat 
B) 2/3 of a hat 
C) 1.5 hats 
D) 6 hats

Question 11

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.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Belize gain compared to the "without trade" numbers?

Accepted Answer

A) -100 
B) 0 
C) 150 
D) 250 
A) -100 
B) 0 
C) 150 
D) 250

Question 12

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

Accepted Answer

A) $0. 
B) $15. 
C) $30. 
D) $40. 
A) $0. 
B) $15. 
C) $30. 
D) $40.

Question 13

Free trade ________ living standards by ________ economic efficiency.

Accepted Answer

A) raises; increasing 
B) lowers; decreasing 
C) raises; equalizing 
D) lowers; eliminating 
A) raises; increasing 
B) lowers; decreasing 
C) raises; equalizing 
D) lowers; eliminating

Question 14

Trade only occurs if there are only winners, and no losers, as a result of the trade.

Accepted Answer

A) True 
 B)False

Question 15

Imposing trade barriers does all of the following except

Accepted Answer

A) reduces economic efficiency. 
B) lowers incomes. 
C) lowers domestic prices. 
D) invites retaliation from foreign governments. 
A) reduces economic efficiency. 
B) lowers incomes. 
C) lowers domestic prices. 
D) invites retaliation from foreign governments.

Question 16

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.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Belize consume?

Accepted Answer

A) 100 
B) 130 
C) 250 
D) 400 
A) 100 
B) 130 
C) 250 
D) 400

Question 17

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Accepted Answer

A) True 
 B)False

Question 18

Dalton, Georgia, a town with a population less than 35,000, has developed into a leading producer of carpets, despite its small size.Some government officials argue that the success achieved by firms in Dalton in developing a comparative advantage in carpet making because of external economies can be used to justify trade barriers as a means to protect an "infant industry." After an infant industry gains experience it can compete in international markets and the trade barriers can be removed.What objections do economists make to this argument in favor of trade barriers?

Accepted Answer

Many economists believe that this is the

Question 19

Twenty-nine countries in Europe have eliminated all tariffs with each other.This group of countries is known as the

Accepted Answer

A) European Union. 
B) United Federation of Europe. 
C) Gruppo Euro. 
D) European Free Trade Association. 
A) European Union. 
B) United Federation of Europe. 
C) Gruppo Euro. 
D) European Free Trade Association.

Question 20

Distinguish between a voluntary export restraint and a quota.

Accepted Answer

A voluntary export restraint is an agree

In the United States, imports and exports make up more than half of GDP.

Absolute advantage is

Which of the following is the best example of a quota?

Under autarky, consumer surplus is represented by the area

A Federal Reserve publication proclaimed that "Trade is a win-win situation for all countries that participate." This statement is

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

A consequence of increasing marginal costs of producing digital music players in Japan 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 deadweight loss is

Free trade living standards by economic efficiency.

Trade only occurs if there are only winners, and no losers, as a result of the trade.

Imposing trade barriers does all of the following except

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Twenty-nine countries in Europe have eliminated all tariffs with each other.This group of countries is known as the

Distinguish between a voluntary export restraint and a quota.

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 More Realistic Setting

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

Exam 9: Comparative Advantage and the Gains From International Trade

In the United States, imports and exports make up more than half of GDP.

Absolute advantage is

Which of the following is the best example of a quota?

Under autarky, consumer surplus is represented by the area

A Federal Reserve publication proclaimed that "Trade is a win-win situation for all countries that participate." This statement is

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

A consequence of increasing marginal costs of producing digital music players in Japan 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 deadweight loss is

Free trade ________ living standards by ________ economic efficiency.

Trade only occurs if there are only winners, and no losers, as a result of the trade.

Imposing trade barriers does all of the following except

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Twenty-nine countries in Europe have eliminated all tariffs with each other.This group of countries is known as the

Distinguish between a voluntary export restraint and a quota.

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 More Realistic Setting

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

Free trade living standards by economic efficiency.