Question 1

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 2

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 3

The price used to sell goods or services between subsidiaries in a company is

Accepted Answer

A) the tax avoidance price. 
B) set at the marginal cost of the producing subsidiary. 
C) determined by the minimum of the average cost curve. 
D) a transfer price. 
A) the tax avoidance price. 
B) set at the marginal cost of the producing subsidiary. 
C) determined by the minimum of the average cost curve. 
D) a transfer price.

Question 4

A country that is a member of the World Trade Organization

Accepted Answer

A) can use tariffs and quotas to limit trade. 
B) can establish preferential trading arrangements with other countries. 
C) is allowed to eliminate all of its tariffs and quotas. 
D) All of the above. 
A) can use tariffs and quotas to limit trade. 
B) can establish preferential trading arrangements with other countries. 
C) is allowed to eliminate all of its tariffs and quotas. 
D) All of the above.

Question 5

An automobile company has two factories, one in Vietnam and one in Australia each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 100 engines or 75 transmissions per day.

Accepted Answer

A) The Australian factory has an comparative advantage producing both engines and transmissions. 
B) The Australian factory has an absolute advantage in the production of transmissions. 
C) The Vietnamese factory has a comparative advantage in the production of engines. 
D) The Australian factory has a comparative advantage in the production of engines. 
A) The Australian factory has an comparative advantage producing both engines and transmissions. 
B) The Australian factory has an absolute advantage in the production of transmissions. 
C) The Vietnamese factory has a comparative advantage in the production of engines. 
D) The Australian factory has a comparative advantage in the production of engines.

Question 6

When deciding where to produce, a key decision criterion for a multinational enterprise

Accepted Answer

A) is the nationality of its founders. 
B) hinges on the ownership of its various subsidiaries. 
C) is the tax laws of the various countries is it considering. 
D) is the location of its headquarters. 
A) is the nationality of its founders. 
B) hinges on the ownership of its various subsidiaries. 
C) is the tax laws of the various countries is it considering. 
D) is the location of its headquarters.

Question 7

The manager of a U.S. office building hires a local company owned by a recent Canadian immigrant to handle landscape maintenance. This is a form of

Accepted Answer

A) domestic outsourcing. 
B) vertical integration. 
C) international outsourcing. 
D) insourcing. 
A) domestic outsourcing. 
B) vertical integration. 
C) international outsourcing. 
D) insourcing.

Question 8

A country uses strategic trade policy to

Accepted Answer

A) increase profits that accrue to domestic producers. 
B) affect the exchange rate of its currency. 
C) impose countervailing duties. 
D) allow dumping of imports to increase consumer surplus. 
A) increase profits that accrue to domestic producers. 
B) affect the exchange rate of its currency. 
C) impose countervailing duties. 
D) allow dumping of imports to increase consumer surplus.

Question 9

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 Germany 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 10

If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are transaction costs of US$50, and the exchange rate is 20 rand/US$, 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 South Africa., and selling it in the U.S. and the price in the U.S. will drop. 
C) here is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will rise. 
D) there is no arbitrage opportunity. 
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 South Africa., and selling it in the U.S. and the price in the U.S. will drop. 
C) here is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will rise. 
D) there is no arbitrage opportunity.

Question 11

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 12

-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. If a $1 per unit tariff is imposed on imported rice, the quantity of imported rice will decrease by

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.

Tariffs and quotas create a loss in social welfare because

The imposition of a quota on an imported good

The price used to sell goods or services between subsidiaries in a company is

A country that is a member of the World Trade Organization

An automobile company has two factories, one in Vietnam and one in Australia each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 100 engines or 75 transmissions per day.

When deciding where to produce, a key decision criterion for a multinational enterprise

The manager of a U.S. office building hires a local company owned by a recent Canadian immigrant to handle landscape maintenance. This is a form of

A country uses strategic trade policy to

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 Germany has

If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are transaction costs of US$50, and the exchange rate is 20 rand/US$, then

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. If a $1 per unit tariff is imposed on imported rice, the quantity of imported rice will decrease by

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

Tariffs and quotas create a loss in social welfare because

The imposition of a quota on an imported good

The price used to sell goods or services between subsidiaries in a company is

A country that is a member of the World Trade Organization

An automobile company has two factories, one in Vietnam and one in Australia each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 100 engines or 75 transmissions per day.

When deciding where to produce, a key decision criterion for a multinational enterprise

The manager of a U.S. office building hires a local company owned by a recent Canadian immigrant to handle landscape maintenance. This is a form of

A country uses strategic trade policy to

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 Germany has

If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are transaction costs of US$50, and the exchange rate is 20 rand/US$, then

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. If a $1 per unit tariff is imposed on imported rice, the quantity of imported rice will decrease by

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