Question 1

Selling a product at a price below its cost is known as dumping.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Disagreements about whether the U.S.government should regulate international trade

Accepted Answer

A) began during the Great Depression. 
B) began after World War I when government officials no longer believed in isolationism. 
C) date back to the beginning of the country. 
D) did not occur until the end of the Mexican War in 1848. 
A) began during the Great Depression. 
B) began after World War I when government officials no longer believed in isolationism. 
C) date back to the beginning of the country. 
D) did not occur until the end of the Mexican War in 1848.

Question 4

Explain whether it is possible for a country to have an absolute advantage in the production of a product without having a comparative advantage in the production of that product.

Accepted Answer

A country can have an absolute advantage

Question 5

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.If there was no quota, how many pounds of peanuts would domestic consumers purchase?

Accepted Answer

A) 10 million 
B) 28 million 
C) 34 million 
D) 40 million 
A) 10 million 
B) 28 million 
C) 34 million 
D) 40 million

Question 6

What is autarky?

Accepted Answer

Autarky is a situati

Question 7

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 the deadweight loss as a result of the quota?

Accepted Answer

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

Question 8

________ 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) Autarkial dominance 
D) Streamlining 
A) Internal economies 
B) External economies 
C) Autarkial dominance 
D) Streamlining

Question 9

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent.In the U.S.steel market, the "Buy American" provision in the 2009 stimulus package would

Accepted Answer

A) convert some consumer surplus to deadweight loss. 
B) transfer some deadweight loss to producer surplus. 
C) transfer some producer surplus to consumer surplus. 
D) reduce the producer surplus received by foreign manufacturers. 
A) convert some consumer surplus to deadweight loss. 
B) transfer some deadweight loss to producer surplus. 
C) transfer some producer surplus to consumer surplus. 
D) reduce the producer surplus received by foreign manufacturers.

Question 10

The World Trade Organization (WTO)promotes foreign trade and investment, or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.One reason for these anti-globalization protests is

Accepted Answer

A) foreign trade and investment are examples of zero-sum games. 
B) protesters believe that globalization will result in a return to communism in developing countries. 
C) protesters believe that free trade destroys the distinctive cultures of many countries. 
D) protesters object to the loss of intellectual property (such as software programs and movies)that results from foreign trade and investment. 
A) foreign trade and investment are examples of zero-sum games. 
B) protesters believe that globalization will result in a return to communism in developing countries. 
C) protesters believe that free trade destroys the distinctive cultures of many countries. 
D) protesters object to the loss of intellectual property (such as software programs and movies)that results from foreign trade and investment.

Question 11

What does it mean for a country to have an absolute advantage in producing a product?

Accepted Answer

A country has an absolute adva

Question 12

In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.One reasons for this is

Accepted Answer

A) comparative advantage works better in theory than in practice. 
B) some countries have more resources than other countries. 
C) tastes for many traded goods are similar in many countries because of globalization. 
D) production of most goods involves increasing opportunity costs. 
A) comparative advantage works better in theory than in practice. 
B) some countries have more resources than other countries. 
C) tastes for many traded goods are similar in many countries because of globalization. 
D) production of most goods involves increasing opportunity costs.

Question 13

The United States has developed a comparative advantage in film production due to the film industry being long-established in southern California, and lower costs result from the size of the industry in the area.This source of comparative advantage is referred to as

Accepted Answer

A) the abundance of natural resources. 
B) superior process technology. 
C) external economies. 
D) best practices of unskilled labor. 
A) the abundance of natural resources. 
B) superior process technology. 
C) external economies. 
D) best practices of unskilled labor.

Question 14

What is a tariff?

Accepted Answer

A tariff is a tax im

Question 15

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.The increase in domestic producer surplus as a result of the tariff is equal to the area

Accepted Answer

A) C. 
B) C + G. 
C) A + C + G. 
D) C + D + G + H + I. 
A) C. 
B) C + G. 
C) A + C + G. 
D) C + D + G + H + I.

Question 16

If the opportunity costs of production for two goods is different between two countries, then

Accepted Answer

A) trade cannot benefit either country. 
B) only one country can be made better off by trade. 
C) mutually beneficial trade is possible. 
D) trade will only benefit both countries if one can lower its opportunity costs. 
A) trade cannot benefit either country. 
B) only one country can be made better off by trade. 
C) mutually beneficial trade is possible. 
D) trade will only benefit both countries if one can lower its opportunity costs.

Question 17

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why, then, do some people support protectionism?

Accepted Answer

A) The criticisms of economists are based on theory. In fact, protectionism increases consumer and producer surplus as well as employment. 
B) Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C) Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D) Supporters of protectionism believe that free trade will lead to inflation. 
A) The criticisms of economists are based on theory. In fact, protectionism increases consumer and producer surplus as well as employment. 
B) Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C) Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D) Supporters of protectionism believe that free trade will lead to inflation.

Question 18

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 a greater opportunity cost than Gabriel for baking cakes. 
B) Sarita's opportunity cost for baking cakes is less than Gabriel's. 
C) Gabriel has a greater opportunity cost than Sarita for baking pies. 
D) Gabriel's opportunity cost for baking cakes and baking pies are both greater than Sarita's. 
A) Sarita has a greater opportunity cost than Gabriel for baking cakes. 
B) Sarita's opportunity cost for baking cakes is less than Gabriel's. 
C) Gabriel has a greater opportunity cost than Sarita for baking pies. 
D) Gabriel's opportunity cost for baking cakes and baking pies are both greater than Sarita's.

Question 19

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 20

Which of the following statements is true?

Accepted Answer

A) Japan is more dependent on foreign trade than is the United States. 
B) Imports and exports account for over one-half of the GDP of Belgium. 
C) France is the leading exporting country, accounting for 10 percent of total world exports. 
D) Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops. 
A) Japan is more dependent on foreign trade than is the United States. 
B) Imports and exports account for over one-half of the GDP of Belgium. 
C) France is the leading exporting country, accounting for 10 percent of total world exports. 
D) Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops.

Selling a product at a price below its cost is known as dumping.

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

Disagreements about whether the U.S.government should regulate international trade

Explain whether it is possible for a country to have an absolute advantage in the production of a product without having a comparative advantage in the production of that product.

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.If there was no quota, how many pounds of peanuts would domestic consumers purchase?

What is autarky?

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 the deadweight loss as a result of the quota?

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

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent.In the U.S.steel market, the "Buy American" provision in the 2009 stimulus package would

The World Trade Organization (WTO)promotes foreign trade and investment, or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.One reason for these anti-globalization protests is

What does it mean for a country to have an absolute advantage in producing a product?

In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.One reasons for this is

The United States has developed a comparative advantage in film production due to the film industry being long-established in southern California, and lower costs result from the size of the industry in the area.This source of comparative advantage is referred to as

What is a tariff?

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.The increase in domestic producer surplus as a result of the tariff is equal to the area

If the opportunity costs of production for two goods is different between two countries, then

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why, then, do some people support protectionism?

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.

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?

Which of the following statements is true?

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

Selling a product at a price below its cost is known as dumping.

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

Disagreements about whether the U.S.government should regulate international trade

Explain whether it is possible for a country to have an absolute advantage in the production of a product without having a comparative advantage in the production of that product.

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.If there was no quota, how many pounds of peanuts would domestic consumers purchase?

What is autarky?

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 the deadweight loss as a result of the quota?

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

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent.In the U.S.steel market, the "Buy American" provision in the 2009 stimulus package would

The World Trade Organization (WTO)promotes foreign trade and investment, or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.One reason for these anti-globalization protests is

What does it mean for a country to have an absolute advantage in producing a product?

In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.One reasons for this is

The United States has developed a comparative advantage in film production due to the film industry being long-established in southern California, and lower costs result from the size of the industry in the area.This source of comparative advantage is referred to as

What is a tariff?

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.The increase in domestic producer surplus as a result of the tariff is equal to the area

If the opportunity costs of production for two goods is different between two countries, then

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why, then, do some people support protectionism?

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.

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?

Which of the following statements is true?

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