Question 1

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

Accepted Answer

A)  almost all jobs; economic growth 
B)  well over half of the jobs; price decreases 
C)  relatively few jobs; job losses 
D)  no jobs; increased productivity 
A)  almost all jobs; economic growth 
B)  well over half of the jobs; price decreases 
C)  relatively few jobs; job losses 
D)  no jobs; increased productivity

Question 2

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff.In response to this tariff,other countries ________ and international trade ________.

Accepted Answer

A)  lowered their tariffs; thrived 
B)  raised their tariffs; collapsed 
C)  eliminated tariffs; began to grow outside of the United States 
D)  doubled their tariffs; became unrestricted 
A)  lowered their tariffs; thrived 
B)  raised their tariffs; collapsed 
C)  eliminated tariffs; began to grow outside of the United States 
D)  doubled their tariffs; became unrestricted

Question 3

Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

Accepted Answer

A)  support; benefits; creates 
B)  criticize; causes losses to; eliminates 
C)  support; lowers prices for; raises wages for 
D)  criticize; unfairly rewards; relocates 
A)  support; benefits; creates 
B)  criticize; causes losses to; eliminates 
C)  support; lowers prices for; raises wages for 
D)  criticize; unfairly rewards; relocates

Question 4

Table 9-2
Output Per Hour of Work
   
Table 9-2 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada.
-Refer to Table 9-2. Fill in the following table with the opportunity costs of producing light bulbs and flash drives for Mexico and Canada.

Accepted Answer

The answer of Table 9-2
Output Per Hour of Work
 ...

Question 5

Figure 9-2
   
Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.The tariff causes domestic consumption of coffee

Accepted Answer

A)  to fall by 27 million pounds. 
B)  to fall by 7 million pounds. 
C)  to rise by 6 million pounds. 
D)  to rise by 20 million pounds. 
A)  to fall by 27 million pounds. 
B)  to fall by 7 million pounds. 
C)  to rise by 6 million pounds. 
D)  to rise by 20 million pounds.

Question 6

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed it

Accepted Answer

A)  eliminated all tariffs among its member countries. 
B)  completed a trade treaty (NAFT
A)  that reduced tariff rates between the EU and North American countries. 
C)  greatly decreased imports and exports among its member countries. 
D)  barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets from Airbus, a European company. 
A)  eliminated all tariffs among its member countries. 
B)  completed a trade treaty (NAFT
A)  that reduced tariff rates between the EU and North American countries. 
C)  greatly decreased imports and exports among its member countries. 
D)  barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets from Airbus, a European company.

Question 7

Protectionism is the use of ________ to protect domestic firms from foreign competition.

Accepted Answer

A)  military force 
B)  trade barriers 
C)  cheap labor 
D)  dumping 
A)  military force 
B)  trade barriers 
C)  cheap labor 
D)  dumping

Question 8

Prior to the 1998 World Cup,France banned the use of all soccer balls made by child workers.Several economists criticized the ban.Which of the following is an argument these economists used to justify the use of child labor in some countries?

Accepted Answer

A)  Soccer balls are easy to carry and workers were given soccer balls to play with. 
B)  Child workers were allowed to attend school during the periods they worked. 
C)  Child workers were given gloves to protect their hands while they stitched soccer balls. 
D)  Some of the alternatives to stitching soccer balls include begging and prostitution. 
A)  Soccer balls are easy to carry and workers were given soccer balls to play with. 
B)  Child workers were allowed to attend school during the periods they worked. 
C)  Child workers were given gloves to protect their hands while they stitched soccer balls. 
D)  Some of the alternatives to stitching soccer balls include begging and prostitution.

Question 9

Figure 9-2
   
Suppose the U.S. government imposes a $0.75 per pound tariff on coffee 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

Accepted Answer

A)  $11.25 million. 
B)  $18 million. 
C)  $32.5 million. 
D)  $45 million. 
A)  $11.25 million. 
B)  $18 million. 
C)  $32.5 million. 
D)  $45 million.

Question 10

Imports are goods and services bought domestically

Accepted Answer

A)  and produced domestically. 
B)  but produced in other countries. 
C)  and resold at a profit. 
D)  and not subject to tariffs. 
A)  and produced domestically. 
B)  but produced in other countries. 
C)  and resold at a profit. 
D)  and not subject to tariffs.

Question 11

A tax imposed by a government on imports of a good into a country is called

Accepted Answer

A)  an import levy. 
B)  an import fine. 
C)  a tariff. 
D)  an import quota. 
A)  an import levy. 
B)  an import fine. 
C)  a tariff. 
D)  an import quota.

Question 12

Figure 9-2
   
Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.With the tariff in place,the United States

Accepted Answer

A)  imports 20 million pounds of coffee. 
B)  imports 12 million pounds of coffee. 
C)  imports 18 million pounds of coffee. 
D)  exports 38 million pounds of coffee. 
A)  imports 20 million pounds of coffee. 
B)  imports 12 million pounds of coffee. 
C)  imports 18 million pounds of coffee. 
D)  exports 38 million pounds of coffee.

Question 13

Jim Owens,Caterpillar's CEO,was encouraged that the "Buy American" provision in the 2009 stimulus bill would generate a large increase in Caterpillar's sales.

Accepted Answer

A) True 
 B)False

Question 14

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.Without the quota,the domestic price of peanuts equals the world price which is $2.00 per pound.What is the quantity of peanuts demanded by domestic consumers in the absence of a quota?

Accepted Answer

A)  10 million pounds 
B)  28 million pounds 
C)  30 million pounds 
D)  40 million pounds 
A)  10 million pounds 
B)  28 million pounds 
C)  30 million pounds 
D)  40 million pounds

Question 15

One of the main sources of comparative advantage is natural resources.

Accepted Answer

A) True 
 B)False

Question 16

It is difficult to determine if foreign companies are selling their products for prices below their costs of production because

Accepted Answer

A)  the true costs of production are difficult to calculate. 
B)  the firms have no legal obligation to reveal this information. 
C)  costs are calculated in the firms' local currencies. 
D)  domestic taxes increase the firms' costs but it is difficult to determine the incidence of these taxes. 
A)  the true costs of production are difficult to calculate. 
B)  the firms have no legal obligation to reveal this information. 
C)  costs are calculated in the firms' local currencies. 
D)  domestic taxes increase the firms' costs but it is difficult to determine the incidence of these taxes.

Question 17

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 value of revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Accepted Answer

A)  $12 million 
B)  $17.25 million 
C)  $20 million 
D)  $44 million 
A)  $12 million 
B)  $17.25 million 
C)  $20 million 
D)  $44 million

Question 18

Trade that is within a country or between countries is based on the principle of

Accepted Answer

A)  absolute advantage. 
B)  scarcity. 
C)  competition. 
D)  comparative advantage. 
A)  absolute advantage. 
B)  scarcity. 
C)  competition. 
D)  comparative advantage.

Question 19

Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions,trade makes both countries better off because in each country

Accepted Answer

A)  total employment is greater. 
B)  total consumption of goods is greater. 
C)  wages are higher. 
D)  total welfare is greater. 
A)  total employment is greater. 
B)  total consumption of goods is greater. 
C)  wages are higher. 
D)  total welfare is greater.

Question 20

International trade

Accepted Answer

A)  harms consumers but helps exporting firms. 
B)  helps consumers but harms exporting firms and their workers. 
C)  helps consumers but hurts firms that are less efficient than their foreign competitors. 
D)  helps consumers and firms that compete with their foreign competitors. 
A)  harms consumers but helps exporting firms. 
B)  helps consumers but harms exporting firms and their workers. 
C)  helps consumers but hurts firms that are less efficient than their foreign competitors. 
D)  helps consumers and firms that compete with their foreign competitors.

Trade restrictions tend to preserve in the protected industries and lead to in other industries.

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff.In response to this tariff,other countries and international trade .

Many economists protectionism because it consumers and jobs in domestic industries that use protected products.

Table 9-2 Output Per Hour of Work Table 9-2 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada. -Refer to Table 9-2. Fill in the following table with the opportunity costs of producing light bulbs and flash drives for Mexico and Canada.

Figure 9-2 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff causes domestic consumption of coffee

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed it

Protectionism is the use of ________ to protect domestic firms from foreign competition.

Prior to the 1998 World Cup,France banned the use of all soccer balls made by child workers.Several economists criticized the ban.Which of the following is an argument these economists used to justify the use of child labor in some countries?

Figure 9-2 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee 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

Imports are goods and services bought domestically

A tax imposed by a government on imports of a good into a country is called

Figure 9-2 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.With the tariff in place,the United States

Jim Owens,Caterpillar's CEO,was encouraged that the "Buy American" provision in the 2009 stimulus bill would generate a large increase in Caterpillar's sales.

One of the main sources of comparative advantage is natural resources.

It is difficult to determine if foreign companies are selling their products for prices below their costs of production because

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 value of revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Trade that is within a country or between countries is based on the principle of

Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions,trade makes both countries better off because in each country

International trade

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

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff.In response to this tariff,other countries ________ and international trade ________.

Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

Table 9-2 Output Per Hour of Work Table 9-2 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada. -Refer to Table 9-2. Fill in the following table with the opportunity costs of producing light bulbs and flash drives for Mexico and Canada.

Figure 9-2 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff causes domestic consumption of coffee

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed it

Protectionism is the use of ________ to protect domestic firms from foreign competition.

Prior to the 1998 World Cup,France banned the use of all soccer balls made by child workers.Several economists criticized the ban.Which of the following is an argument these economists used to justify the use of child labor in some countries?

Figure 9-2 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee 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

Imports are goods and services bought domestically

A tax imposed by a government on imports of a good into a country is called

Figure 9-2 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.With the tariff in place,the United States

Jim Owens,Caterpillar's CEO,was encouraged that the "Buy American" provision in the 2009 stimulus bill would generate a large increase in Caterpillar's sales.

One of the main sources of comparative advantage is natural resources.

It is difficult to determine if foreign companies are selling their products for prices below their costs of production because

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 value of revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Trade that is within a country or between countries is based on the principle of

Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions,trade makes both countries better off because in each country

International trade

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

Trade restrictions tend to preserve in the protected industries and lead to in other industries.

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff.In response to this tariff,other countries and international trade .

Many economists protectionism because it consumers and jobs in domestic industries that use protected products.