Question 1

An effective import quota:​

Accepted Answer

A) lowers the price of imports. 
B) lowers the price of domestic goods competing with imports. 
C) increases the variety of goods available to the consumer. 
D) increases federal revenues. 
E) lowers the quantity of the imported good. 
A) lowers the price of imports. 
B) lowers the price of domestic goods competing with imports. 
C) increases the variety of goods available to the consumer. 
D) increases federal revenues. 
E) lowers the quantity of the imported good. E

Question 2

Suppose the government of an importing country is considering imposing either a tariff that would result in imports falling to 1 million units per year or an import quota of 1 million units per year.Which of the following would be true in such a case?​

Accepted Answer

A) The U.S.consumers would lose more consumer surplus in the case of tariffs than quotas. 
B) The U.S.producers would gain more in the case of quotas than tariffs. 
C) The change in quantity demanded would be greater in the case of tariffs than quotas. 
D) The tariff revenue would go to U.S.government; quota benefits may go to foreign producers. 
E) The U.S.export market would shrink more in the case of quotas than tariffs. 
A) The U.S.consumers would lose more consumer surplus in the case of tariffs than quotas. 
B) The U.S.producers would gain more in the case of quotas than tariffs. 
C) The change in quantity demanded would be greater in the case of tariffs than quotas. 
D) The tariff revenue would go to U.S.government; quota benefits may go to foreign producers. 
E) The U.S.export market would shrink more in the case of quotas than tariffs. D

Question 3

Which of the following is true of a country's production possibilities frontier?​

Accepted Answer

A) International trade makes it possible for a country's consumption possibilities to exceed its production possibilities. 
B) International trade requires that a country's production possibilities exceed its consumption possibilities. 
C) A country's production possibilities always equal its consumption possibilities. 
D) A country's consumption possibilities can never equal its production possibilities because of leakages in the system. 
E) The slope of a country's production possibilities frontier is equal to the absolute advantage of producing a particular good. 
A) International trade makes it possible for a country's consumption possibilities to exceed its production possibilities. 
B) International trade requires that a country's production possibilities exceed its consumption possibilities. 
C) A country's production possibilities always equal its consumption possibilities. 
D) A country's consumption possibilities can never equal its production possibilities because of leakages in the system. 
E) The slope of a country's production possibilities frontier is equal to the absolute advantage of producing a particular good. A

Question 4

The establishment of GATT resulted in:​

Accepted Answer

A) lower tariff rates. 
B) an increase in the net welfare loss of economies. 
C) a decrease in the total world trade. 
D) increased protectionism. 
E) a rise in the price of imports. 
A) lower tariff rates. 
B) an increase in the net welfare loss of economies. 
C) a decrease in the total world trade. 
D) increased protectionism. 
E) a rise in the price of imports.

Question 5

The world demand for and the world supply of a good will together determine the _____.​

Accepted Answer

A) tariff 
B) world price 
C) exchange rate 
D) terms of trade 
E) quota 
A) tariff 
B) world price 
C) exchange rate 
D) terms of trade 
E) quota

Question 6

For each pound of blueberry cheesecake Abura produces,it gives up the opportunity to make 150 screwdrivers.Mayo can produce one pound of blueberry cheesecake for every 300 screwdrivers it produces.If specialization and trade were to occur between these two countries,which of the following is true with regard to opportunity costs in the two countries?​

Accepted Answer

A) The opportunity cost of producing cheesecakes is lower in Abura than Mayo. 
B) The opportunity cost of producing screwdrivers is lower in Abura than Mayo. 
C) The opportunity cost of producing cheesecakes is identical in both countries. 
D) The opportunity cost of producing screwdrivers is higher in Abura than Mayo. 
E) In Mayo,the opportunity cost of producing one unit of screwdriver is one pound of cheesecake. 
A) The opportunity cost of producing cheesecakes is lower in Abura than Mayo. 
B) The opportunity cost of producing screwdrivers is lower in Abura than Mayo. 
C) The opportunity cost of producing cheesecakes is identical in both countries. 
D) The opportunity cost of producing screwdrivers is higher in Abura than Mayo. 
E) In Mayo,the opportunity cost of producing one unit of screwdriver is one pound of cheesecake.

Question 7

Relative to quotas,tariffs lead to a greater change in the quantity of a good demanded by consumers.​

Accepted Answer

A) True 
 B)False

Question 8

According to some economists,the protection granted to infant industries should be:​

Accepted Answer

A) terminated after one year. 
B) to protect emerging domestic industries. 
C) restricted to firms that face little competition. 
D) based on absolute advantage. 
E) based on opportunity costs. 
A) terminated after one year. 
B) to protect emerging domestic industries. 
C) restricted to firms that face little competition. 
D) based on absolute advantage. 
E) based on opportunity costs.

Question 9

The basis of the benefits of specialization is:​

Accepted Answer

A) comparative advantage. 
B) absolute advantage. 
C) the size of the country. 
D) identical production costs between two countries. 
E) agreeable terms of trade. 
A) comparative advantage. 
B) absolute advantage. 
C) the size of the country. 
D) identical production costs between two countries. 
E) agreeable terms of trade.

Question 10

Tariffs and quotas are the only two devices used to restrict foreign trade.​

Accepted Answer

A) True 
 B)False

Question 11

​The following graph shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of imported good.In such a case,_____. ​
Figure 17.2
​

Accepted Answer

A) 25 units will be exported 
B) 25 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported 
A) 25 units will be exported 
B) 25 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported

Question 12

A legal limit on the amount of a commodity that can be imported is known as:​

Accepted Answer

A) an ad valorem tariff. 
B) an import quota. 
C) an import concession. 
D) an import substitution. 
E) a specific tariff. 
A) an ad valorem tariff. 
B) an import quota. 
C) an import concession. 
D) an import substitution. 
E) a specific tariff.

Question 13

If wage rates are lower in Mexico than in Germany,labor costs per unit of output can still be higher in Mexico.​

Accepted Answer

A) True 
 B)False

Question 14

International trade is most likely to occur whenever:​

Accepted Answer

A) nations have an absolute advantage in the production of goods. 
B) all of the trading nations are self-sufficient. 
C) world production equals world consumption. 
D) each of the trading nations gains from trade. 
E) labor is cheaper abroad. 
A) nations have an absolute advantage in the production of goods. 
B) all of the trading nations are self-sufficient. 
C) world production equals world consumption. 
D) each of the trading nations gains from trade. 
E) labor is cheaper abroad.

Question 15

A charge levied on imports in terms of a fixed percentage of value is known as a(n):​

Accepted Answer

A) specific tariff. 
B) ad valorem tariff. 
C) import quota. 
D) import concession. 
E) import substitution. 
A) specific tariff. 
B) ad valorem tariff. 
C) import quota. 
D) import concession. 
E) import substitution.

Question 16

Tariffs and quotas:​

Accepted Answer

A) reduce consumer surplus and increase producer surplus in the importing country. 
B) increase consumer surplus and reduce producer surplus in the importing country. 
C) reduce both consumer surplus and producer surplus in the exporting country. 
D) are imposed when there are differences in the opportunity cost of production across countries. 
E) are imposed when production is subject to economies of scale. 
A) reduce consumer surplus and increase producer surplus in the importing country. 
B) increase consumer surplus and reduce producer surplus in the importing country. 
C) reduce both consumer surplus and producer surplus in the exporting country. 
D) are imposed when there are differences in the opportunity cost of production across countries. 
E) are imposed when production is subject to economies of scale.

Question 17

The following graph shows the demand for and domestic supply of a good in a country.If the country decides to trade,then at a world price of $1.00 _____.​ ​
Figure 17.2
​
​

Accepted Answer

A) 20 units will be exported 
B) 20 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported 
A) 20 units will be exported 
B) 20 units will be imported 
C) 50 units will be exported 
D) 50 units will be imported 
E) 10 units will be exported

Question 18

Which of the following is not an argument in favor of restricting trade?​

Accepted Answer

A) Preserving national security 
B) Preventing dumping 
C) Increasing consumer surplus 
D) Protecting infant industries 
E) Protecting declining industries 
A) Preserving national security 
B) Preventing dumping 
C) Increasing consumer surplus 
D) Protecting infant industries 
E) Protecting declining industries

Question 19

The cost of the resources used by domestic producer groups,including lobbying fees,propaganda,and legal restrictions,is collectively referred to as the cost of:​

Accepted Answer

A) enforcement and implementation. 
B) rent seeking. 
C) retaliation. 
D) collective action. 
E) import substitution. 
A) enforcement and implementation. 
B) rent seeking. 
C) retaliation. 
D) collective action. 
E) import substitution.

Question 20

The production possibilities curve of a country will be a straight line if _____.​

Accepted Answer

A) the production of each commodity is subject to economies of scale 
B) the country completely specializes in the production of the good with the highest opportunity cost 
C) the country has an absolute advantage in the production of each commodity 
D) the resources in the country are equally adaptable to the production of each commodity 
E) the country completely specializes in the production of the good with the lowest opportunity cost 
A) the production of each commodity is subject to economies of scale 
B) the country completely specializes in the production of the good with the highest opportunity cost 
C) the country has an absolute advantage in the production of each commodity 
D) the resources in the country are equally adaptable to the production of each commodity 
E) the country completely specializes in the production of the good with the lowest opportunity cost

An effective import quota:

Suppose the government of an importing country is considering imposing either a tariff that would result in imports falling to 1 million units per year or an import quota of 1 million units per year.Which of the following would be true in such a case?

Which of the following is true of a country's production possibilities frontier?

The establishment of GATT resulted in:

The world demand for and the world supply of a good will together determine the _____.

Relative to quotas,tariffs lead to a greater change in the quantity of a good demanded by consumers.

According to some economists,the protection granted to infant industries should be:

The basis of the benefits of specialization is:

Tariffs and quotas are the only two devices used to restrict foreign trade.

The following graph shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of imported good.In such a case,_____. Figure 17.2

A legal limit on the amount of a commodity that can be imported is known as:

If wage rates are lower in Mexico than in Germany,labor costs per unit of output can still be higher in Mexico.

International trade is most likely to occur whenever:

A charge levied on imports in terms of a fixed percentage of value is known as a(n):

Tariffs and quotas:

The following graph shows the demand for and domestic supply of a good in a country.If the country decides to trade,then at a world price of $1.00 _____. Figure 17.2

Which of the following is not an argument in favor of restricting trade?

The cost of the resources used by domestic producer groups,including lobbying fees,propaganda,and legal restrictions,is collectively referred to as the cost of:

The production possibilities curve of a country will be a straight line if _____.

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Finance

Economic Development

Filters

Exam 17: International Trade

An effective import quota:​

Suppose the government of an importing country is considering imposing either a tariff that would result in imports falling to 1 million units per year or an import quota of 1 million units per year.Which of the following would be true in such a case?​

Which of the following is true of a country's production possibilities frontier?​

The establishment of GATT resulted in:​

The world demand for and the world supply of a good will together determine the _____.​

Relative to quotas,tariffs lead to a greater change in the quantity of a good demanded by consumers.​

According to some economists,the protection granted to infant industries should be:​

The basis of the benefits of specialization is:​

Tariffs and quotas are the only two devices used to restrict foreign trade.​

​The following graph shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of imported good.In such a case,_____. ​ Figure 17.2 ​

A legal limit on the amount of a commodity that can be imported is known as:​

If wage rates are lower in Mexico than in Germany,labor costs per unit of output can still be higher in Mexico.​

International trade is most likely to occur whenever:​

A charge levied on imports in terms of a fixed percentage of value is known as a(n):​

Tariffs and quotas:​

The following graph shows the demand for and domestic supply of a good in a country.If the country decides to trade,then at a world price of $1.00 _____.​ ​ Figure 17.2 ​ ​

Which of the following is not an argument in favor of restricting trade?​

The cost of the resources used by domestic producer groups,including lobbying fees,propaganda,and legal restrictions,is collectively referred to as the cost of:​

The production possibilities curve of a country will be a straight line if _____.​

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Finance

Economic Development

Filters

An effective import quota:

Suppose the government of an importing country is considering imposing either a tariff that would result in imports falling to 1 million units per year or an import quota of 1 million units per year.Which of the following would be true in such a case?

Which of the following is true of a country's production possibilities frontier?

The establishment of GATT resulted in:

The world demand for and the world supply of a good will together determine the _____.

Relative to quotas,tariffs lead to a greater change in the quantity of a good demanded by consumers.

According to some economists,the protection granted to infant industries should be:

The basis of the benefits of specialization is:

Tariffs and quotas are the only two devices used to restrict foreign trade.

The following graph shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit and a specific tariff of $0.50 per unit is imposed on each unit of imported good.In such a case,_____. Figure 17.2

A legal limit on the amount of a commodity that can be imported is known as:

If wage rates are lower in Mexico than in Germany,labor costs per unit of output can still be higher in Mexico.

International trade is most likely to occur whenever:

A charge levied on imports in terms of a fixed percentage of value is known as a(n):

Tariffs and quotas:

The following graph shows the demand for and domestic supply of a good in a country.If the country decides to trade,then at a world price of $1.00 _____. Figure 17.2

Which of the following is not an argument in favor of restricting trade?

The cost of the resources used by domestic producer groups,including lobbying fees,propaganda,and legal restrictions,is collectively referred to as the cost of:

The production possibilities curve of a country will be a straight line if _____.