Question 1

For the U.S.steel industry,a "Buy American" provision in the 2009 stimulus bill would create gains for all of the following except

Accepted Answer

A)  U.S. steel companies. 
B)  U.S. steel workers. 
C)  foreign steel companies still able to sell in the United States. 
D)  U.S. taxpayers. 
A)  U.S. steel companies. 
B)  U.S. steel workers. 
C)  foreign steel companies still able to sell in the United States. 
D)  U.S. taxpayers. D

Question 2

________ is the ability to produce more of a good or service than competitors when using the same amount of resources.

Accepted Answer

A)  Absolute advantage 
B)  Comparative advantage 
C)  Trade superiority 
D)  Trade autarky 
A)  Absolute advantage 
B)  Comparative advantage 
C)  Trade superiority 
D)  Trade autarky A

Question 3

If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

Accepted Answer

A)  marginal 
B)  explicit 
C)  opportunity 
D)  implicit 
A)  marginal 
B)  explicit 
C)  opportunity 
D)  implicit C

Question 4

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 be imported?

Accepted Answer

A)  16 million 
B)  28 million 
C)  30 million 
D)  40 million 
A)  16 million 
B)  28 million 
C)  30 million 
D)  40 million

Question 5

Governments sometimes erect barriers to trade other than tariffs and quotas.Which of the following is not an example of this type of trade barrier?

Accepted Answer

A)  a requirement that the employees of domestic firms that engage in foreign trade pay income taxes 
B)  a requirement that imports meet health and safety requirements 
C)  restrictions on imports for national security reasons 
D)  a requirement that the U.S. government buy military uniforms only from U.S. manufacturers 
A)  a requirement that the employees of domestic firms that engage in foreign trade pay income taxes 
B)  a requirement that imports meet health and safety requirements 
C)  restrictions on imports for national security reasons 
D)  a requirement that the U.S. government buy military uniforms only from U.S. manufacturers

Question 6

The first discussion of comparative advantage appears in a book written by

Accepted Answer

A)  Adam Smith. 
B)  Paul Samuelson. 
C)  David Portugal. 
D)  David Ricardo. 
A)  Adam Smith. 
B)  Paul Samuelson. 
C)  David Portugal. 
D)  David Ricardo.

Question 7

The United States has developed a comparative advantage in digital computers,airliners and many prescription drugs.The source of its comparative advantage in these products is

Accepted Answer

A)  a favorable climate. 
B)  technology. 
C)  abundant supplies of natural resources. 
D)  a strong central government. 
A)  a favorable climate. 
B)  technology. 
C)  abundant supplies of natural resources. 
D)  a strong central government.

Question 8

In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.All of the following are reasons for this except

Accepted Answer

A)  not all goods and services are traded internationally. 
B)  some countries have more resources than other countries. 
C)  tastes for many traded goods are different in many countries because of globalization. 
D)  production of most goods involves increasing opportunity costs. 
A)  not all goods and services are traded internationally. 
B)  some countries have more resources than other countries. 
C)  tastes for many traded goods are different in many countries because of globalization. 
D)  production of most goods involves increasing opportunity costs.

Question 9

Which of the following statements is false?

Accepted Answer

A)  Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B)  Each year the United States exports about 50 percent of its wheat crop and 20 percent of its corn crop. 
C)  Most of the leading exporting countries are large, high-income countries. 
D)  Not all sectors of the U.S. economy are affected equally by international trade. 
A)  Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B)  Each year the United States exports about 50 percent of its wheat crop and 20 percent of its corn crop. 
C)  Most of the leading exporting countries are large, high-income countries. 
D)  Not all sectors of the U.S. economy are affected equally by international trade.

Question 10

All of the following are sources of comparative advantage except

Accepted Answer

A)  climate and natural resources. 
B)  relative abundance of labor and capital. 
C)  a strong foreign currency exchange rate. 
D)  technology. 
A)  climate and natural resources. 
B)  relative abundance of labor and capital. 
C)  a strong foreign currency exchange rate. 
D)  technology.

Question 11

Which of the following is an example of a trade restriction?

Accepted Answer

A)  Japan places a tax on all Korean automobiles. 
B)  Domestic wine is more expensive than wine imported from Chile. 
C)  The United States, Canada, and Mexico sign the NAFTA agreement. 
D)  Consumers prefer German beer to domestic beer. 
A)  Japan places a tax on all Korean automobiles. 
B)  Domestic wine is more expensive than wine imported from Chile. 
C)  The United States, Canada, and Mexico sign the NAFTA agreement. 
D)  Consumers prefer German beer to domestic beer.

Question 12

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

Accepted Answer

A)  both a U.S. and an French import. 
B)  a U.S. import and an French export. 
C)  a U.S. export and an French import. 
D)  neither an export nor an import for either country. 
A)  both a U.S. and an French import. 
B)  a U.S. import and an French export. 
C)  a U.S. export and an French import. 
D)  neither an export nor an import for either country.

Question 13

Which of the following statements is false?

Accepted Answer

A)  Not all individuals in both countries are made better off as a result of international trade. 
B)  Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall. 
C)  Although some individuals may not be made better off as a result of international trade, both countries may be made better off overall. 
D)  Each country as a whole is made better off as a result of international trade, but individuals within each country may be made worse off. 
A)  Not all individuals in both countries are made better off as a result of international trade. 
B)  Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall. 
C)  Although some individuals may not be made better off as a result of international trade, both countries may be made better off overall. 
D)  Each country as a whole is made better off as a result of international trade, but individuals within each country may be made worse off.

Question 14

The terms of trade refers to

Accepted Answer

A)  the rules and regulations that countries must adhere to when trading. 
B)  the ratio at which a country can trade its exports for imports from other countries. 
C)  the role of the government in overseeing international trade. 
D)  a legal document that specifies the trade quantities agreed to by two countries. 
A)  the rules and regulations that countries must adhere to when trading. 
B)  the ratio at which a country can trade its exports for imports from other countries. 
C)  the role of the government in overseeing international trade. 
D)  a legal document that specifies the trade quantities agreed to by two countries.

Question 15

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.With a quota in place,what is the quantity consumed in the domestic market and what portion of this is supplied by imports?

Accepted Answer

A)  Domestic consumption equals 28 million pounds of which 18 million pounds are imports. 
B)  Domestic consumption equals 40 million pounds of which 22 million pounds are imports. 
C)  Domestic consumption equals 34 million pounds of which 16 million pounds are imports. 
D)  Domestic consumption equals 34 million pounds of which 18 million pounds are imports. 
A)  Domestic consumption equals 28 million pounds of which 18 million pounds are imports. 
B)  Domestic consumption equals 40 million pounds of which 22 million pounds are imports. 
C)  Domestic consumption equals 34 million pounds of which 16 million pounds are imports. 
D)  Domestic consumption equals 34 million pounds of which 18 million pounds are imports.

Question 16

A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country.

Accepted Answer

A)  a tax on goods 
B)  a minimum quantity of a good 
C)  quality standards on goods 
D)  a numerical limit on the quantity of a good 
A)  a tax on goods 
B)  a minimum quantity of a good 
C)  quality standards on goods 
D)  a numerical limit on the quantity of a good

Question 17

Economists believe the most persuasive argument for protectionism is to

Accepted Answer

A)  save jobs. 
B)  protect high wages. 
C)  protect national security. 
D)  protect infant industries. 
A)  save jobs. 
B)  protect high wages. 
C)  protect national security. 
D)  protect infant industries.

Question 18

In 1995,the General Agreement on Tariffs and Trade (GATT)was replaced by the World Trade Organization (WTO).

Accepted Answer

A) True 
 B)False

Question 19

Free trade refers to trade between countries

Accepted Answer

A)  that is without shipping costs. 
B)  that is licensed by both governments. 
C)  that is without restrictions. 
D)  of products which are free to low-income consumers. 
A)  that is without shipping costs. 
B)  that is licensed by both governments. 
C)  that is without restrictions. 
D)  of products which are free to low-income consumers.

Question 20

In the United States during the Great Depression,tariffs were ________ than they were following World War II,and ________ than they are today.

Accepted Answer

A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower 
A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower

For the U.S.steel industry,a "Buy American" provision in the 2009 stimulus bill would create gains for all of the following except

________ is the ability to produce more of a good or service than competitors when using the same amount of resources.

If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

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 be imported?

Governments sometimes erect barriers to trade other than tariffs and quotas.Which of the following is not an example of this type of trade barrier?

The first discussion of comparative advantage appears in a book written by

The United States has developed a comparative advantage in digital computers,airliners and many prescription drugs.The source of its comparative advantage in these products is

In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.All of the following are reasons for this except

Which of the following statements is false?

All of the following are sources of comparative advantage except

Which of the following is an example of a trade restriction?

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

Which of the following statements is false?

The terms of trade refers to

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.With a quota in place,what is the quantity consumed in the domestic market and what portion of this is supplied by imports?

A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country.

Economists believe the most persuasive argument for protectionism is to

In 1995,the General Agreement on Tariffs and Trade (GATT)was replaced by the World Trade Organization (WTO).

Free trade refers to trade between countries

In the United States during the Great Depression,tariffs were than they were following World War II,and than they are today.

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 7: Comparative Advantage and the Gains From International Trade

For the U.S.steel industry,a "Buy American" provision in the 2009 stimulus bill would create gains for all of the following except

________ is the ability to produce more of a good or service than competitors when using the same amount of resources.

If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

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 be imported?

Governments sometimes erect barriers to trade other than tariffs and quotas.Which of the following is not an example of this type of trade barrier?

The first discussion of comparative advantage appears in a book written by

The United States has developed a comparative advantage in digital computers,airliners and many prescription drugs.The source of its comparative advantage in these products is

In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.All of the following are reasons for this except

Which of the following statements is false?

All of the following are sources of comparative advantage except

Which of the following is an example of a trade restriction?

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

Which of the following statements is false?

The terms of trade refers to

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.With a quota in place,what is the quantity consumed in the domestic market and what portion of this is supplied by imports?

A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country.

Economists believe the most persuasive argument for protectionism is to

In 1995,the General Agreement on Tariffs and Trade (GATT)was replaced by the World Trade Organization (WTO).

Free trade refers to trade between countries

In the United States during the Great Depression,tariffs were ________ than they were following World War II,and ________ than they are today.

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

In the United States during the Great Depression,tariffs were than they were following World War II,and than they are today.