Exam 18: Overview of Macroeconomics

Use the following to answer questions : Figure 18-3 -If the world price in Figure 18-3 were $1.00, how much revenue would be collected by a tariff that maintained a domestic supply of 200 units?

Use the following to answer questions : Figure 18-3 -If the world price in Figure 18-3 were $2.50, what size quota would be required to keep domestic supply at the no-trade levels?

It is likely that a tariff will:

The principle of comparative advantage changes dramatically when trade is extended to three or more countries simultaneously.

Use the following to answer questions : Figure 18-6 -Given a world price of $1.00 in Figure 18-6, the quota equivalent to a $1.50 tariff is 200 units.

A nation that enjoyed the lower absolute costs for all its consumptive goods could have little reason to trade.

In 2007, the United States exported more automotive vehicles and parts than it imported.

Even in a situation where absolute costs for two countries and two products are identical, trade can be mutually beneficial if:

Trade may take place because of the diversity in productive possibilities among countries.

The major advantage of international trade is that it expands the scope of trade.

Use the following to answer questions : Figure 18-4 -Which of the following is a true statement in reference to Figure 18-4, assuming that there is free trade?

Protectionist tariff and quotas often:

Quotas are:

By "terms of trade," we mean:

Use the following to answer questions : Figure 18-4 -Assume that there is free trade and negligible transportation costs between Country A and Country B.Which of the following is false in reference to Figure 18-4?

With constant labor costs (L), the two countries, X and Y produce units of A and B as shown below.It is clear that with free trade, money wage rates in X will be:

Use the following to answer questions : Figure 18-2 -Consider Figure 18-2.Assuming that there is free trade of AC and negligible transportation cost, the price of pounds in terms of dollars is closest to:

Transportation costs are the costs of moving bulky and perishable goods, and have the same effects as tariffs, reducing the extent of beneficial regional specialization.

The degree of openness of an economy is defined as the ratio of exports or imports to GDP.

International economics involves many of the most controversial questions of the day.