Question 1

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

Accepted Answer

A) they do not want to offend their employers who want them. 
B) politicians lobby to convince workers the restrictions will make them better off. 
C) they believe the restrictions will protect their jobs. 
D) they don't understand that the restrictions will threaten their jobs. 
A) they do not want to offend their employers who want them. 
B) politicians lobby to convince workers the restrictions will make them better off. 
C) they believe the restrictions will protect their jobs. 
D) they don't understand that the restrictions will threaten their jobs.

Question 2

A tariff is a numerical limit on the quantity of a good that can be imported.

Accepted Answer

A) True 
 B)False

Question 3

Imports are goods and services bought domestically

Accepted Answer

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

Question 4

What is the difference between imports and exports?

Accepted Answer

Imports are goods and services

Question 5

Which of the following statements is used to justify protectionism?

Accepted Answer

A) Free trade leads to higher prices for imported goods. 
B) Free trade increases employment by protecting domestic firms. 
C) A country should not rely on other countries for goods that are critical to its national defence. 
D) Trade restrictions are not necessary to protect new firms since they can gain experience and become more productive without protection. 
A) Free trade leads to higher prices for imported goods. 
B) Free trade increases employment by protecting domestic firms. 
C) A country should not rely on other countries for goods that are critical to its national defence. 
D) Trade restrictions are not necessary to protect new firms since they can gain experience and become more productive without protection.

Question 6

Table 13.6
Production and
Consumption Production
Without Trade With Trade   Denmark and Belize can produce both clocks and hats.Table 13.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 13.6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Belize consume?

Accepted Answer

A) 100 
B) 130 
C) 250 
D) 400 
A) 100 
B) 130 
C) 250 
D) 400

Question 7

Table 13.3   Bryce and Tina are artisans who produce homemade candles and soap.Table 13.3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 13.3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Bryce has an absolute advantage in making candles and soap. 
B) Tina has an absolute advantage in making candles and soap. 
C) Neither Bryce nor Tina has an absolute advantage in making candles. 
D) Neither Bryce nor Tina has an absolute advantage in making soap. 
A) Bryce has an absolute advantage in making candles and soap. 
B) Tina has an absolute advantage in making candles and soap. 
C) Neither Bryce nor Tina has an absolute advantage in making candles. 
D) Neither Bryce nor Tina has an absolute advantage in making soap.

Question 8

What is dumping? Who benefits and who loses from dumping?

Accepted Answer

Dumping refers to selling a product for

Question 9

Which of the following is not a source of comparative advantage?

Accepted Answer

A) Relative abundance of labour and capital 
B) Technology 
C) Climate and natural resources 
D) A strong foreign currency exchange rate 
A) Relative abundance of labour and capital 
B) Technology 
C) Climate and natural resources 
D) A strong foreign currency exchange rate

Question 10

What is a tariff?

Accepted Answer

A) A limit placed on the quantity of goods that can be imported into a country. 
B) A tax imposed by a government on goods imported into a country. 
C) A subsidy granted to importers of a vital input. 
D) A health and safety restriction imposed on an imported product. 
A) A limit placed on the quantity of goods that can be imported into a country. 
B) A tax imposed by a government on goods imported into a country. 
C) A subsidy granted to importers of a vital input. 
D) A health and safety restriction imposed on an imported product.

Question 11

Protectionism

Accepted Answer

A) is the use of cheap labour to protect firms from paying high wages. 
B) is the use of trade barriers to protect domestic firms from foreign competition. 
C) refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D) refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts. 
A) is the use of cheap labour to protect firms from paying high wages. 
B) is the use of trade barriers to protect domestic firms from foreign competition. 
C) refers to reductions in tariffs and other barriers that protect consumers from paying high prices. 
D) refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts.

Question 12

Table 13.6
Production and
Consumption Production
Without Trade With Trade   Denmark and Belize can produce both clocks and hats.Table 13.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 13.6.All of the following are terms of trade that could possibly benefit both countries except

Accepted Answer

A) 1 hat : 2 clocks. 
B) 1 hat : 4 clocks. 
C) 1 hat : 5 clocks. 
D) 1 hat : 8 clocks. 
A) 1 hat : 2 clocks. 
B) 1 hat : 4 clocks. 
C) 1 hat : 5 clocks. 
D) 1 hat : 8 clocks.

Question 13

What do economists call the amount of imports that can be purchased per unit of exports?

Accepted Answer

A) A trade barrier. 
B) The terms of trade. 
C) Autarky. 
D) A free trade agreement. 
A) A trade barrier. 
B) The terms of trade. 
C) Autarky. 
D) A free trade agreement.

Question 14

a.What is the World Trade Organisation?
b.When was it established?
c.How many countries are members of the World Trade Organisation?

Accepted Answer

a.The World Trade Organisation (WTO)is a

Question 15

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Accepted Answer

A) True 
 B)False

Question 16

Table 13.6
Production and
Consumption Production
Without Trade With Trade   Denmark and Belize can produce both clocks and hats.Table 13.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 13.6.The country which has a comparative advantage in producing clocks is

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country 
A) Denmark 
B) Belize 
C) both countries 
D) neither country

Question 17

Distinguish between a voluntary export restraint and a quota.

Accepted Answer

A voluntary export restraint is an agree

Question 18

Under autarky, consumer surplus is represented by the area

Accepted Answer

A) above the supply curve and below the equilibrium price. 
B) above the supply curve and below the demand curve. 
C) below the demand curve and above the equilibrium price. 
D) above the demand curve and below the supply curve. 
A) above the supply curve and below the equilibrium price. 
B) above the supply curve and below the demand curve. 
C) below the demand curve and above the equilibrium price. 
D) above the demand curve and below the supply curve.

Question 19

Whenever a buyer and a seller agree to trade,

Accepted Answer

A) the agreement is made based on absolute advantage. 
B) they must have identical opportunity costs in producing their respective products. 
C) one party will always be worse off. 
D) both must believe they will be made better off. 
A) the agreement is made based on absolute advantage. 
B) they must have identical opportunity costs in producing their respective products. 
C) one party will always be worse off. 
D) both must believe they will be made better off.

Question 20

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

Accepted Answer

A) Governments always make the level of protection for infant industries too high. 
B) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. 
C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue.(Quotas do not result in government revenue). 
D) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never 'growing up.' 
A) Governments always make the level of protection for infant industries too high. 
B) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. 
C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue.(Quotas do not result in government revenue). 
D) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never 'growing up.'

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

A tariff is a numerical limit on the quantity of a good that can be imported.

Imports are goods and services bought domestically

What is the difference between imports and exports?

Which of the following statements is used to justify protectionism?

Table 13.3 Bryce and Tina are artisans who produce homemade candles and soap.Table 13.3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 13.3.Select the statement that accurately interprets the data in the table.

What is dumping? Who benefits and who loses from dumping?

Which of the following is not a source of comparative advantage?

What is a tariff?

Protectionism

What do economists call the amount of imports that can be purchased per unit of exports?

a.What is the World Trade Organisation? b.When was it established? c.How many countries are members of the World Trade Organisation?

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Distinguish between a voluntary export restraint and a quota.

Under autarky, consumer surplus is represented by the area

Whenever a buyer and a seller agree to trade,

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 13: Comparative Advantage and the Gains From International Trade

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

A tariff is a numerical limit on the quantity of a good that can be imported.

Imports are goods and services bought domestically

What is the difference between imports and exports?

Which of the following statements is used to justify protectionism?

Table 13.3 Bryce and Tina are artisans who produce homemade candles and soap.Table 13.3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 13.3.Select the statement that accurately interprets the data in the table.

What is dumping? Who benefits and who loses from dumping?

Which of the following is not a source of comparative advantage?

What is a tariff?

Protectionism

What do economists call the amount of imports that can be purchased per unit of exports?

a.What is the World Trade Organisation? b.When was it established? c.How many countries are members of the World Trade Organisation?

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Distinguish between a voluntary export restraint and a quota.

Under autarky, consumer surplus is represented by the area

Whenever a buyer and a seller agree to trade,

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters