Question 1

The maximum amount of a good that may be imported during a specified period of time is

Accepted Answer

A) an infant industry agreement. 
B) an import quota. 
C) dumping. 
D) comparative advantage. 
A) an infant industry agreement. 
B) an import quota. 
C) dumping. 
D) comparative advantage.

Question 2

The contention that tariffs should be imposed to when a foreign government provides financial assistance its producers is

Accepted Answer

A) a national defense concern. 
B) the infant industry argument. 
C) dumping. 
D) to counter foreign subsidies. 
A) a national defense concern. 
B) the infant industry argument. 
C) dumping. 
D) to counter foreign subsidies.

Question 3

-Refer to the above figures. A tariff is placed on a foreign good. Which figures represents the situation in the domestic market for a competing domestic good?

Accepted Answer

A) Panel A 
B) Panel B 
C) Panel C 
D) Panel D 
A) Panel A 
B) Panel B 
C) Panel C 
D) Panel D

Question 4

When a firm sells its good abroad below the cost of producing the good the firm is

Accepted Answer

A) using the concept of comparative advantage. 
B) dumping. 
C) taking advantage of the infant industry argument. 
D) taking advantage of absolute advantage. 
A) using the concept of comparative advantage. 
B) dumping. 
C) taking advantage of the infant industry argument. 
D) taking advantage of absolute advantage.

Question 5

Mason and Chloe each produce two goods. According to the principle of comparative advantage, the total output produced by these individuals will be greatest

Accepted Answer

A) if Chloe produces both goods and Mason produces nothing. 
B) if each good is produced by the individual who has the lower opportunity cost of producing that good. 
C) if each good is produced by the individual who has the higher absolute cost of producing that good. 
D) if Mason produces both goods and Chloe produces nothing. 
A) if Chloe produces both goods and Mason produces nothing. 
B) if each good is produced by the individual who has the lower opportunity cost of producing that good. 
C) if each good is produced by the individual who has the higher absolute cost of producing that good. 
D) if Mason produces both goods and Chloe produces nothing.

Question 6

Given two economic systems, A and B, if economy A has a absolute advantage in the production of widgets, then

Accepted Answer

A) fewer inputs are necessary to produce widgets in economy A than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of widgets than economy B. 
D) economy A would not benefit from the specialization of production. 
A) fewer inputs are necessary to produce widgets in economy A than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of widgets than economy B. 
D) economy A would not benefit from the specialization of production.

Question 7

If Abigail can produce 4 tablets or 3 cellphones in a day, while Jacob can produce 1 tablet or 2 cellphones, then it is correct to state that

Accepted Answer

A) Abigail has a comparative advantage in producing cellphones. 
B) Abigail has an absolute advantage in producing tablets but not cellphones. 
C) Jacob has a comparative advantage in cellphones. 
D) Jacob has an absolute advantage in cellphones. 
A) Abigail has a comparative advantage in producing cellphones. 
B) Abigail has an absolute advantage in producing tablets but not cellphones. 
C) Jacob has a comparative advantage in cellphones. 
D) Jacob has an absolute advantage in cellphones.

Question 8

If it costs a firm $10 to produce a good and the same good sells for $7 abroad, then this firm is engaging in

Accepted Answer

A) profit maximization. 
B) price discrimination. 
C) price differentiation. 
D) dumping. 
A) profit maximization. 
B) price discrimination. 
C) price differentiation. 
D) dumping.

Question 9

Assume that maximum feasible hourly productions levels if all resources are utilized in the United States are either 8 yards of fabric or 4 bushels of wheat. Maximum feasible production levels if all resources are utilized in Japan are either 3 yards of fabric or 6 bushels of wheat. Based on this information

Accepted Answer

A) beneficial trade is absolutely impossible between the two countries. 
B) the United States will benefit from trading but Japan will not. 
C) both nations will gain from specialization and trade, with the United States exporting wheat and Japan exporting fabric. 
D) both nations will gain from specialization and trade, with the United States exporting fabric and Japan exporting wheat. 
A) beneficial trade is absolutely impossible between the two countries. 
B) the United States will benefit from trading but Japan will not. 
C) both nations will gain from specialization and trade, with the United States exporting wheat and Japan exporting fabric. 
D) both nations will gain from specialization and trade, with the United States exporting fabric and Japan exporting wheat.

Question 10

Which of the reasons given for tariff protection make consumers better off by generating lower prices?

Accepted Answer

A) infant industry argument 
B) protecting U.S. jobs argument 
C) anti-dumping argument 
D) None provides lower prices for domestic consumers. 
A) infant industry argument 
B) protecting U.S. jobs argument 
C) anti-dumping argument 
D) None provides lower prices for domestic consumers.

Question 11

Restrictions on imports

Accepted Answer

A) eventually reduce exports, too. 
B) enhance economic welfare by encouraging more exports. 
C) are the quickest way for a country in recession to start on a path of economic recovery. 
D) usually have no long-run effects on an economy. 
A) eventually reduce exports, too. 
B) enhance economic welfare by encouraging more exports. 
C) are the quickest way for a country in recession to start on a path of economic recovery. 
D) usually have no long-run effects on an economy.

Question 12

-Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a bicycle in the United States is ________ while the opportunity cost of producing a bicycle in Mexico is ________.

Accepted Answer

A) 8 computers; 10 computer 
B) 4 computers; 10 computers 
C) 5 computers; 2 computers 
D) 2 computers; 5 computers 
A) 8 computers; 10 computer 
B) 4 computers; 10 computers 
C) 5 computers; 2 computers 
D) 2 computers; 5 computers

Question 13

-Refer to the above table. If opportunity costs are constant and both countries produce only the goods for which they have comparative advantages and then trade, hourly world output would equal

Accepted Answer

A) 4 units of product A and 4 units of product B. 
B) 8 units of product A and 4 units of product B. 
C) 8 units of product A and 8 units of product B. 
D) 12 units of product A and 8 units of product B. 
A) 4 units of product A and 4 units of product B. 
B) 8 units of product A and 4 units of product B. 
C) 8 units of product A and 8 units of product B. 
D) 12 units of product A and 8 units of product B.

Question 14

A tariff is

Accepted Answer

A) a government-imposed restriction on the quantity of a specific good that can be imported into the country. 
B) a tax on imported goods. 
C) a subsidy on domestically produced goods. 
D) a voluntary agreement to restrict exports. 
A) a government-imposed restriction on the quantity of a specific good that can be imported into the country. 
B) a tax on imported goods. 
C) a subsidy on domestically produced goods. 
D) a voluntary agreement to restrict exports.

Question 15

Specialization and international trade lead to

Accepted Answer

A) an outward shift in the production possibilities curve. 
B) an inward shift in the consumption possibilities frontier. 
C) a lower opportunity cost of domestic production of all goods. 
D) an enhanced level of consumption. 
A) an outward shift in the production possibilities curve. 
B) an inward shift in the consumption possibilities frontier. 
C) a lower opportunity cost of domestic production of all goods. 
D) an enhanced level of consumption.

Question 16

-Refer to the above figures. A tariff is placed on a foreign good. Which figure represents the situation in the domestic market for the foreign good?

Accepted Answer

A) Panel A 
B) Panel B 
C) Panel C 
D) Panel D 
A) Panel A 
B) Panel B 
C) Panel C 
D) Panel D

Question 17

If in the long run, imports are paid for by exports, then

Accepted Answer

A) any restriction of imports ultimately reduces exports. 
B) any restriction of imports ultimately expands exports. 
C) any restriction of imports has no impact on exports. 
D) any restriction of exports has no impact on imports. 
A) any restriction of imports ultimately reduces exports. 
B) any restriction of imports ultimately expands exports. 
C) any restriction of imports has no impact on exports. 
D) any restriction of exports has no impact on imports.

Question 18

A group of nations that grants member special trade privileges is

Accepted Answer

A) World Trade Organization. 
B) European Union. 
C) General Agreement on Tariffs and Trade. 
D) North American Free Trade Agreement. 
A) World Trade Organization. 
B) European Union. 
C) General Agreement on Tariffs and Trade. 
D) North American Free Trade Agreement.

Question 19

An official agreement with another country in which it agrees to import more from the United States is

Accepted Answer

A) a regional trade bloc. 
B) the quota system. 
C) a voluntary import expansion. 
D) a voluntary restraint agreement. 
A) a regional trade bloc. 
B) the quota system. 
C) a voluntary import expansion. 
D) a voluntary restraint agreement.

Question 20

-Based on the data in the above table, then if opportunity costs are constant, the opportunity cost of producing movies in the United States is ________, and the opportunity cost of producing movies in Switzerland is ________.

Accepted Answer

A) 2 movies; 2 cuckoo clocks 
B) 2.5 movies; 0.4 cuckoo clocks 
C) 0.4 cuckoo clocks; 0.5 cuckoo clocks 
D) 2.5 cuckoo clocks; 2 cuckoo clocks 
A) 2 movies; 2 cuckoo clocks 
B) 2.5 movies; 0.4 cuckoo clocks 
C) 0.4 cuckoo clocks; 0.5 cuckoo clocks 
D) 2.5 cuckoo clocks; 2 cuckoo clocks

The maximum amount of a good that may be imported during a specified period of time is

The contention that tariffs should be imposed to when a foreign government provides financial assistance its producers is

-Refer to the above figures. A tariff is placed on a foreign good. Which figures represents the situation in the domestic market for a competing domestic good?

When a firm sells its good abroad below the cost of producing the good the firm is

Mason and Chloe each produce two goods. According to the principle of comparative advantage, the total output produced by these individuals will be greatest

Given two economic systems, A and B, if economy A has a absolute advantage in the production of widgets, then

If Abigail can produce 4 tablets or 3 cellphones in a day, while Jacob can produce 1 tablet or 2 cellphones, then it is correct to state that

If it costs a firm $10 to produce a good and the same good sells for $7 abroad, then this firm is engaging in

Which of the reasons given for tariff protection make consumers better off by generating lower prices?

Restrictions on imports

-Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a bicycle in the United States is while the opportunity cost of producing a bicycle in Mexico is .

-Refer to the above table. If opportunity costs are constant and both countries produce only the goods for which they have comparative advantages and then trade, hourly world output would equal

A tariff is

Specialization and international trade lead to

-Refer to the above figures. A tariff is placed on a foreign good. Which figure represents the situation in the domestic market for the foreign good?

If in the long run, imports are paid for by exports, then

A group of nations that grants member special trade privileges is

An official agreement with another country in which it agrees to import more from the United States is

-Based on the data in the above table, then if opportunity costs are constant, the opportunity cost of producing movies in the United States is , and the opportunity cost of producing movies in Switzerland is .

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Exchange Rates and the Balance of Payments

Filters

Exam 18: Comparative Advantage and the Open Economy

The maximum amount of a good that may be imported during a specified period of time is

The contention that tariffs should be imposed to when a foreign government provides financial assistance its producers is

-Refer to the above figures. A tariff is placed on a foreign good. Which figures represents the situation in the domestic market for a competing domestic good?

When a firm sells its good abroad below the cost of producing the good the firm is

Mason and Chloe each produce two goods. According to the principle of comparative advantage, the total output produced by these individuals will be greatest

Given two economic systems, A and B, if economy A has a absolute advantage in the production of widgets, then

If Abigail can produce 4 tablets or 3 cellphones in a day, while Jacob can produce 1 tablet or 2 cellphones, then it is correct to state that

If it costs a firm $10 to produce a good and the same good sells for $7 abroad, then this firm is engaging in

Which of the reasons given for tariff protection make consumers better off by generating lower prices?

Restrictions on imports

-Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a bicycle in the United States is ________ while the opportunity cost of producing a bicycle in Mexico is ________.

-Refer to the above table. If opportunity costs are constant and both countries produce only the goods for which they have comparative advantages and then trade, hourly world output would equal

A tariff is

Specialization and international trade lead to

-Refer to the above figures. A tariff is placed on a foreign good. Which figure represents the situation in the domestic market for the foreign good?

If in the long run, imports are paid for by exports, then

A group of nations that grants member special trade privileges is

An official agreement with another country in which it agrees to import more from the United States is

-Based on the data in the above table, then if opportunity costs are constant, the opportunity cost of producing movies in the United States is ________, and the opportunity cost of producing movies in Switzerland is ________.

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Exchange Rates and the Balance of Payments

Filters

-Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a bicycle in the United States is while the opportunity cost of producing a bicycle in Mexico is .

-Based on the data in the above table, then if opportunity costs are constant, the opportunity cost of producing movies in the United States is , and the opportunity cost of producing movies in Switzerland is .