Question 1

-Refer to Exhibit 34-9.For country X,the opportunity cost of producing one unit of good B is __________ unit(s)of good A.

Accepted Answer

A)  3 
B)  1/10 
C)  1/2 
D)  1/3 
E)  10 
A)  3 
B)  1/10 
C)  1/2 
D)  1/3 
E)  10 E

Question 2

-Refer to Exhibit 34-9.In the no specialization-no trade case,suppose country X produces and consumes 100 units of good A and 20 units of good B.Country Y produces and consumes 20 units of good A and 60 units of good B.If the two countries specialize and trade,and the actual amounts traded are 125 units of good A for 25 units of good B,how many more units of good A will country Y consume by specializing and trading?

Accepted Answer

A)  125 
B)  20 
C)  15 
D)  105 
E)  50 
A)  125 
B)  20 
C)  15 
D)  105 
E)  50 D

Question 3

A country has a (an)__________ in the production of a good it produces at lower opportunity cost than another country.

Accepted Answer

A)  absolute advantage 
B)  specialization disadvantage 
C)  tariff-efficient advantage 
D)  infant-industry advantage 
E)  none of the above 
A)  absolute advantage 
B)  specialization disadvantage 
C)  tariff-efficient advantage 
D)  infant-industry advantage 
E)  none of the above E

Question 4

The term outsourcing is used to describe work done for a company by individuals working for another company in a different country.

Accepted Answer

A) True 
 B)False

Question 5

Countries tend to specialize in the production of goods in which they have a comparative advantage because

Accepted Answer

A)  government officials calculate opportunity costs and suggest to people what they ought to produce. 
B)  people want to make a profit. 
C)  the Economic Development Office of the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
D)  the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
E)  none of the above 
A)  government officials calculate opportunity costs and suggest to people what they ought to produce. 
B)  people want to make a profit. 
C)  the Economic Development Office of the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
D)  the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
E)  none of the above

Question 6

-Refer to Exhibit 34-1.Considering the data,which of the following terms of trade would both countries agree to?

Accepted Answer

A)  1 unit of X for 2 units of Y 
B)  1 unit of X for 3 units of Y 
C)  1 unit of X for 1 unit of Y 
D)  1 unit of X for 1.50 units of Y 
E)  all of the above 
A)  1 unit of X for 2 units of Y 
B)  1 unit of X for 3 units of Y 
C)  1 unit of X for 1 unit of Y 
D)  1 unit of X for 1.50 units of Y 
E)  all of the above

Question 7

In order for good X to be a likely candidate for offshoring,it must be produced with ______________ labor intensity and be a relatively ________________ good.

Accepted Answer

A)  low; light 
B)  low; heavy 
C)  high; heavy 
D)  high; light 
A)  low; light 
B)  low; heavy 
C)  high; heavy 
D)  high; light

Question 8

-Refer to Exhibit 34-7.Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).The government collects tariff revenue on good X in the amount of

Accepted Answer

A)  $100 
B)  $200 
C)  $250 
D)  $300 
E)  There is not enough information to answer this question. 
A)  $100 
B)  $200 
C)  $250 
D)  $300 
E)  There is not enough information to answer this question.

Question 9

-Refer to Exhibit 34-6.The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country B.

Accepted Answer

A)  15 
B)  10 
C)  5 
D)  1 
A)  15 
B)  10 
C)  5 
D)  1

Question 10

-Refer to Exhibit 34-1.Considering the data,which of the following terms of trade would both countries agree to?

Accepted Answer

A)  1 unit of Y for 1 unit of X 
B)  1 unit of Y for 0.75 units of X 
C)  1 unit of Y for 0.25 units of X 
D)  1 unit of Y for 1.50 units of X 
E)  all of the above 
A)  1 unit of Y for 1 unit of X 
B)  1 unit of Y for 0.75 units of X 
C)  1 unit of Y for 0.25 units of X 
D)  1 unit of Y for 1.50 units of X 
E)  all of the above

Question 11

-Refer to Exhibit 34-7.Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).Americans purchase ______ units of good X from U.S.producers and import _______ units of good X from abroad.

Accepted Answer

A)  0; 50 
B)  20; 25 
C)  10; 30 
D)  10; 40 
A)  0; 50 
B)  20; 25 
C)  10; 30 
D)  10; 40

Question 12

A French firm sells its good at a lower price in England than in France.It follows that the French firm is necessarily

Accepted Answer

A)  dumping. 
B)  saving domestic jobs. 
C)  being subsidized by the French government. 
D)  part of an infant industry. 
E)  none of the above 
A)  dumping. 
B)  saving domestic jobs. 
C)  being subsidized by the French government. 
D)  part of an infant industry. 
E)  none of the above

Question 13

-Refer to Exhibit 34-10.Danielle's opportunity cost of mowing the lawn is

Accepted Answer

A)  0.50 clean houses. 
B)  2.40 clean houses. 
C)  2.00 clean houses. 
D)  0.60 clean houses. 
A)  0.50 clean houses. 
B)  2.40 clean houses. 
C)  2.00 clean houses. 
D)  0.60 clean houses.

Question 14

Consumers receive more consumers' surplus when tariffs exist than when they do not exist.

Accepted Answer

A) True 
 B)False

Question 15

A quota raises the price of the product on which the quota has been placed,decreases consumers' surplus,increases producers' surplus,and generates tariff revenue for the government.

Accepted Answer

A) True 
 B)False

Question 16

Tariffs raise the price of imported goods,but quotas rarely do.

Accepted Answer

A) True 
 B)False

Question 17

The infant industry argument for trade protectionism holds that

Accepted Answer

A)  new industries sometimes need a protective environment in which to grow so that they can compete with older,more established foreign competitors. 
B)  foreign competitors are often viewed as "infants" by large U.S.firms. 
C)  tariffs are often preferred to quotas. 
D)  quotas raise prices more than tariffs raise prices. 
E)  a and c 
A)  new industries sometimes need a protective environment in which to grow so that they can compete with older,more established foreign competitors. 
B)  foreign competitors are often viewed as "infants" by large U.S.firms. 
C)  tariffs are often preferred to quotas. 
D)  quotas raise prices more than tariffs raise prices. 
E)  a and c

Question 18

Dumping refers to a country

Accepted Answer

A)  imposing a retaliatory tariff against the subsidized products of a foreign country. 
B)  selling a good abroad at a price that is below its cost and lower than the price charged in the domestic market. 
C)  selling a good abroad at a price that is above its cost and higher than the price charged in the domestic market. 
D)  a and c 
E)  all of the above 
A)  imposing a retaliatory tariff against the subsidized products of a foreign country. 
B)  selling a good abroad at a price that is below its cost and lower than the price charged in the domestic market. 
C)  selling a good abroad at a price that is above its cost and higher than the price charged in the domestic market. 
D)  a and c 
E)  all of the above

Question 19

Which of the following founders of the United States used the infant-industry argument to support trade restrictions?

Accepted Answer

A)  Thomas Jefferson 
B)  Alexander Hamilton 
C)  James Madison 
D)  John Jay 
A)  Thomas Jefferson 
B)  Alexander Hamilton 
C)  James Madison 
D)  John Jay

Question 20

Consumers receive more consumers' surplus when __________.

Accepted Answer

A)  tariffs exist. 
B)  tariffs and quotas do not exist. 
C)  quotas exist. 
D)  a and c 
A)  tariffs exist. 
B)  tariffs and quotas do not exist. 
C)  quotas exist. 
D)  a and c

Exam 21: International Finance

-Refer to Exhibit 34-9.For country X,the opportunity cost of producing one unit of good B is __________ unit(s)of good A.

A country has a (an)__________ in the production of a good it produces at lower opportunity cost than another country.

The term outsourcing is used to describe work done for a company by individuals working for another company in a different country.

Countries tend to specialize in the production of goods in which they have a comparative advantage because

-Refer to Exhibit 34-1.Considering the data,which of the following terms of trade would both countries agree to?

In order for good X to be a likely candidate for offshoring,it must be produced with ______________ labor intensity and be a relatively ________________ good.

-Refer to Exhibit 34-7.Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).The government collects tariff revenue on good X in the amount of

-Refer to Exhibit 34-6.The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country B.

-Refer to Exhibit 34-1.Considering the data,which of the following terms of trade would both countries agree to?

-Refer to Exhibit 34-7.Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).Americans purchase ______ units of good X from U.S.producers and import _______ units of good X from abroad.

A French firm sells its good at a lower price in England than in France.It follows that the French firm is necessarily

-Refer to Exhibit 34-10.Danielle's opportunity cost of mowing the lawn is

Consumers receive more consumers' surplus when tariffs exist than when they do not exist.

A quota raises the price of the product on which the quota has been placed,decreases consumers' surplus,increases producers' surplus,and generates tariff revenue for the government.

Tariffs raise the price of imported goods,but quotas rarely do.

The infant industry argument for trade protectionism holds that

Dumping refers to a country

Which of the following founders of the United States used the infant-industry argument to support trade restrictions?

Consumers receive more consumers' surplus when __________.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

In order for good X to be a likely candidate for offshoring,it must be produced with labor intensity and be a relatively __ good.

-Refer to Exhibit 34-7.Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).Americans purchase units of good X from U.S.producers and import _ units of good X from abroad.