Question 1

If the U.S.government implements a tariff on Chinese tire imports all of the following would be made worse off except

Accepted Answer

A) U.S.consumers. 
B) American tire retailers. 
C) Chinese tire manufacturers. 
D) American tire manufacturing workers. 
A) U.S.consumers. 
B) American tire retailers. 
C) Chinese tire manufacturers. 
D) American tire manufacturing workers.

Question 2

Figure 7-1   Figure 7-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 7-1.Under autarky,the consumer surplus is area

Accepted Answer

A) R. 
B) S. 
C) R + S + V. 
D) S + V. 
A) R. 
B) S. 
C) R + S + V. 
D) S + V.

Question 3

Figure 7-3   Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 7-3 illustrates the impact of the quota.
-Refer to Figure 7-3.If there was no quota,how many pounds of peanuts would be imported?

Accepted Answer

A) 16 million 
B) 28 million 
C) 30 million 
D) 40 million 
A) 16 million 
B) 28 million 
C) 30 million 
D) 40 million

Question 4

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 5

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden,which of the following would explain this pattern of trade?

Accepted Answer

A) Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter. 
B) The opportunity cost of producing butter in Denmark is higher than the opportunity cost of producing butter in Sweden. 
C) Sweden must have an absolute advantage in producing cell phones and Denmark must have an absolute advantage in producing butter. 
D) Sweden has a higher opportunity cost of producing cell phones than Denmark,and Denmark has a higher opportunity cost of producing butter. 
A) Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter. 
B) The opportunity cost of producing butter in Denmark is higher than the opportunity cost of producing butter in Sweden. 
C) Sweden must have an absolute advantage in producing cell phones and Denmark must have an absolute advantage in producing butter. 
D) Sweden has a higher opportunity cost of producing cell phones than Denmark,and Denmark has a higher opportunity cost of producing butter.

Question 6

Table 7-4
Output Per Hour of Work
   Table 7-4 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada.
-Refer to Table 7-4.
a.Which country has an absolute advantage in the production of light bulbs and flash drives?
b.Which country has a comparative advantage in the production of light bulbs?
c.Which country has a comparative advantage in the production of flash drives?

Accepted Answer

a.Neither country has an absolute advant

Question 7

As a percentage of GDP,imports are greater than exports for which of the following countries?

Accepted Answer

A) Germany 
B) Japan 
C) the Netherlands 
D) the United States 
A) Germany 
B) Japan 
C) the Netherlands 
D) the United States

Question 8

Table 7-3
   Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
-Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Mateo has a greater opportunity cost than Celeste for making saddles. 
B) Mateo's opportunity cost for making saddles is less than Celeste's. 
C) Celeste has a greater opportunity cost than Mateo for making saddles. 
D) Mateo's opportunity cost for making saddles and making spurs are both greater than Celeste's. 
A) Mateo has a greater opportunity cost than Celeste for making saddles. 
B) Mateo's opportunity cost for making saddles is less than Celeste's. 
C) Celeste has a greater opportunity cost than Mateo for making saddles. 
D) Mateo's opportunity cost for making saddles and making spurs are both greater than Celeste's.

Question 9

A consequence of increasing marginal costs of producing laptop computers in the United States is

Accepted Answer

A) the United States will import laptop computers from countries that don't experience increasing marginal costs. 
B) the United States will stop short of complete specialization in the production of laptop computers. 
C) the United States will not export laptop computers. 
D) the United States will likely impose trade restrictions on imported laptop computers. 
A) the United States will import laptop computers from countries that don't experience increasing marginal costs. 
B) the United States will stop short of complete specialization in the production of laptop computers. 
C) the United States will not export laptop computers. 
D) the United States will likely impose trade restrictions on imported laptop computers.

Question 10

Figure 7-1   Figure 7-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 7-1.Under autarky,the equilibrium price is

Accepted Answer

A) $0. 
B) $24. 
C) $30. 
D) $54. 
A) $0. 
B) $24. 
C) $30. 
D) $54.

Question 11

If the U.S.government implements a tariff on Chinese tire imports,the price of Chinese-made tires will ________,the quantity demanded will ________,and consumer surplus will ________.

Accepted Answer

A) increase; decrease; decrease 
B) increase; not change; increase 
C) decrease; increase; not change 
D) increase; decrease; increase 
A) increase; decrease; decrease 
B) increase; not change; increase 
C) decrease; increase; not change 
D) increase; decrease; increase

Question 12

How does the U.S.federal government assist workers who have lost their jobs due to international trade?

Accepted Answer

The federal government uses the Trade Ad

Question 13

The Smoot-Hawley Tariff

Accepted Answer

A) lowered U.S.tariffs by 50 percent following World War II. 
B) was passed by the U.S.Congress following the Civil War as a means of increasing government revenue. 
C) was passed by the U.S.Congress upon a recommendation made by the General Agreement on Tariffs and Trade (GATT)in 1948. 
D) raised average tariff rates by over 50 percent in the United States in 1930. 
A) lowered U.S.tariffs by 50 percent following World War II. 
B) was passed by the U.S.Congress following the Civil War as a means of increasing government revenue. 
C) was passed by the U.S.Congress upon a recommendation made by the General Agreement on Tariffs and Trade (GATT)in 1948. 
D) raised average tariff rates by over 50 percent in the United States in 1930.

Question 14

Figure 7-2   Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff.
-Refer to Figure 7-2.If the tariff was replaced by a quota which limited coffee imports to 20 million pounds,the amount of revenue received by coffee importers would equal

Accepted Answer

A) $5 million. 
B) $15 million. 
C) $50 million. 
D) $78 million. 
A) $5 million. 
B) $15 million. 
C) $50 million. 
D) $78 million.

Question 15

Globalization is the process of countries imposing trade restrictions on other countries.

Accepted Answer

A) True 
 B)False

Question 16

Table 7-5
   Table 7-5 shows the output per week for pens and pencils by Tran and Farah.
-Refer to Table 7-5.
a.Which person has an absolute advantage in the production of pens? pencils?
b.Which person has a comparative advantage in the production of pens?
c.Which person has a comparative advantage in the production of pencils?

Accepted Answer

a.Farah has an absolute advantage in the

Question 17

In the United States during the Great Depression,tariffs were ________ than they were following World War II,and ________ than they are today.

Accepted Answer

A) higher; higher 
B) higher; lower 
C) lower; higher 
D) lower; lower 
A) higher; higher 
B) higher; lower 
C) lower; higher 
D) lower; lower

Question 18

In 1995,the General Agreement on Tariffs and Trade (GATT),which was established in 1948,was replaced by the World Trade Organization (WTO).Why did members of the GATT push for the establishment of the WTO?

Accepted Answer

A) The GATT agreement only covered trade in goods.The WTO was created to cover trade in goods,services and intellectual property. 
B) The charter of the GATT had run out and a new organization was needed to promote international trade. 
C) The creation of the European Union (EU)made the GATT obsolete.The WTO was formed to regulate trade between the EU and other nations. 
D) By 1995 tariffs had been eliminated.The WTO was created to reduce non-tariff trade barriers. 
A) The GATT agreement only covered trade in goods.The WTO was created to cover trade in goods,services and intellectual property. 
B) The charter of the GATT had run out and a new organization was needed to promote international trade. 
C) The creation of the European Union (EU)made the GATT obsolete.The WTO was formed to regulate trade between the EU and other nations. 
D) By 1995 tariffs had been eliminated.The WTO was created to reduce non-tariff trade barriers.

Question 19

Table 7-6
Production and
Consumption Production
Without Trade With Trade
   Estonia and Morocco can produce both swords and belts.Table 7-6 shows the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.All of the following are terms of trade that could possibly benefit both countries except

Accepted Answer

A) 2/3 of a belt : 1 sword 
B) 3/5 of a belt : 1 sword 
C) 7/10 of a belt : 1 sword 
D) 1/4 of a belt : 1 sword 
A) 2/3 of a belt : 1 sword 
B) 3/5 of a belt : 1 sword 
C) 7/10 of a belt : 1 sword 
D) 1/4 of a belt : 1 sword

Question 20

Table 7-6
Production and
Consumption Production
Without Trade With Trade
   Estonia and Morocco can produce both swords and belts.Table 7-6 shows the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,how many swords will Morocco consume?

Accepted Answer

A) 50 
B) 95 
C) 105 
D) 200 
A) 50 
B) 95 
C) 105 
D) 200

If the U.S.government implements a tariff on Chinese tire imports all of the following would be made worse off except

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Under autarky,the consumer surplus is area

Figure 7-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 7-3 illustrates the impact of the quota. -Refer to Figure 7-3.If there was no quota,how many pounds of peanuts would be imported?

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

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden,which of the following would explain this pattern of trade?

As a percentage of GDP,imports are greater than exports for which of the following countries?

Table 7-3 Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

A consequence of increasing marginal costs of producing laptop computers in the United States is

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Under autarky,the equilibrium price is

If the U.S.government implements a tariff on Chinese tire imports,the price of Chinese-made tires will ,the quantity demanded will ,and consumer surplus will .

How does the U.S.federal government assist workers who have lost their jobs due to international trade?

The Smoot-Hawley Tariff

Globalization is the process of countries imposing trade restrictions on other countries.

In the United States during the Great Depression,tariffs were than they were following World War II,and than they are today.

In 1995,the General Agreement on Tariffs and Trade (GATT),which was established in 1948,was replaced by the World Trade Organization (WTO).Why did members of the GATT push for the establishment of the WTO?

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

If the U.S.government implements a tariff on Chinese tire imports all of the following would be made worse off except

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Under autarky,the consumer surplus is area

Figure 7-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 7-3 illustrates the impact of the quota. -Refer to Figure 7-3.If there was no quota,how many pounds of peanuts would be imported?

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

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden,which of the following would explain this pattern of trade?

As a percentage of GDP,imports are greater than exports for which of the following countries?

Table 7-3 Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

A consequence of increasing marginal costs of producing laptop computers in the United States is

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Under autarky,the equilibrium price is

If the U.S.government implements a tariff on Chinese tire imports,the price of Chinese-made tires will ________,the quantity demanded will ________,and consumer surplus will ________.

How does the U.S.federal government assist workers who have lost their jobs due to international trade?

The Smoot-Hawley Tariff

Globalization is the process of countries imposing trade restrictions on other countries.

In the United States during the Great Depression,tariffs were ________ than they were following World War II,and ________ than they are today.

In 1995,the General Agreement on Tariffs and Trade (GATT),which was established in 1948,was replaced by the World Trade Organization (WTO).Why did members of the GATT push for the establishment of the WTO?

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

If the U.S.government implements a tariff on Chinese tire imports,the price of Chinese-made tires will ,the quantity demanded will ,and consumer surplus will .

In the United States during the Great Depression,tariffs were than they were following World War II,and than they are today.