Question 1

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 2

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

Accepted Answer

A) split their time evenly between work and school. 
B) usually have few good alternatives to work. 
C) are only allowed to work if they have attended school up to age 15. 
D) who work are relatively rare,as most do attend school full time. 
A) split their time evenly between work and school. 
B) usually have few good alternatives to work. 
C) are only allowed to work if they have attended school up to age 15. 
D) who work are relatively rare,as most do attend school full time.

Question 3

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.'

Question 4

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 5

What is an 'open economy'?

Accepted Answer

It is an economy that exports

Question 6

What is a tariff?

Accepted Answer

A tariff is a tax im

Question 7

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that

Accepted Answer

A) Bulgaria also has an absolute advantage in producing sandals relative to Finland. 
B) Bulgaria has a lower opportunity cost of producing sandals relative to Finland. 
C) Finland has an absolute disadvantage in producing sandals relative to Bulgaria. 
D) labour costs are higher for sandal producers in Finland than in Bulgaria. 
A) Bulgaria also has an absolute advantage in producing sandals relative to Finland. 
B) Bulgaria has a lower opportunity cost of producing sandals relative to Finland. 
C) Finland has an absolute disadvantage in producing sandals relative to Bulgaria. 
D) labour costs are higher for sandal producers in Finland than in Bulgaria.

Question 8

A tariff is

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 9

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 10

A situation in which a country does not trade with other countries is called

Accepted Answer

A) autarky. 
B) self-actualisation. 
C) autonomy. 
D) independence. 
A) autarky. 
B) self-actualisation. 
C) autonomy. 
D) independence.

Question 11

Countries that engage in trade will tend to specialise in the production of goods and services in which they have ________ and will ________ these goods and services.

Accepted Answer

A) a comparative advantage;import 
B) an absolute advantage;export 
C) a comparative advantage;export 
D) an absolute advantage;import 
A) a comparative advantage;import 
B) an absolute advantage;export 
C) a comparative advantage;export 
D) an absolute advantage;import

Question 12

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

Accepted Answer

A) each country would be better off from trade if it had an absolute advantage in producing one of the goods. 
B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage. 
C) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods. 
D) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods. 
A) each country would be better off from trade if it had an absolute advantage in producing one of the goods. 
B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage. 
C) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods. 
D) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods.

Question 13

Table 13-2
   
Sarita and Gabriel own S&G Bakery.Table 13-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 13-2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Sarita has a comparative advantage in baking pies. 
B) Gabriel has a comparative advantage in baking cakes. 
C) Sarita has a comparative advantage in baking pies and baking cakes. 
D) Sarita has a comparative advantage in baking cakes. 
A) Sarita has a comparative advantage in baking pies. 
B) Gabriel has a comparative advantage in baking cakes. 
C) Sarita has a comparative advantage in baking pies and baking cakes. 
D) Sarita has a comparative advantage in baking cakes.

Question 14

Table 13-6
 
  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.Which country has an absolute advantage in producing clocks?

Accepted Answer

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

Question 15

A tariff is a tax imposed by a government on

Accepted Answer

A) exports. 
B) services. 
C) imports. 
D) luxury items. 
A) exports. 
B) services. 
C) imports. 
D) luxury items.

Question 16

Table 13-6
 
  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.Prior to trade,what was the opportunity cost to produce 1 hat in Denmark?

Accepted Answer

A) 1/6 of a clock 
B) 2/3 of a clock 
C) 1.5 clocks 
D) 6 clocks 
A) 1/6 of a clock 
B) 2/3 of a clock 
C) 1.5 clocks 
D) 6 clocks

Question 17

The main purpose of most tariffs and quotas is to

Accepted Answer

A) raise revenue for the government. 
B) reduce the prices consumers pay for goods and services. 
C) reduce the foreign competition that domestic firms face. 
D) improve the quality of goods and services imported into the country. 
A) raise revenue for the government. 
B) reduce the prices consumers pay for goods and services. 
C) reduce the foreign competition that domestic firms face. 
D) improve the quality of goods and services imported into the country.

Question 18

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

Accepted Answer

A) True 
 B)False

Question 19

What is the difference between imports and exports?

Accepted Answer

Imports are goods and services

Question 20

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

Accepted Answer

A) True 
 B)False

Protectionism

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

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

Imports are goods and services bought domestically

What is an 'open economy'?

What is a tariff?

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that

A tariff is

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.

A situation in which a country does not trade with other countries is called

Countries that engage in trade will tend to specialise in the production of goods and services in which they have and will these goods and services.

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

Table 13-2 Sarita and Gabriel own S&G Bakery.Table 13-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 13-2.Select the statement that accurately interprets the data in the table.

Table 13-6 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.Which country has an absolute advantage in producing clocks?

A tariff is a tax imposed by a government on

Table 13-6 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.Prior to trade,what was the opportunity cost to produce 1 hat in Denmark?

The main purpose of most tariffs and quotas is to

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

What is the difference between imports and exports?

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

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

Oligopoly: Firms in Less Competitive Markets

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: International Trade

Protectionism

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

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

Imports are goods and services bought domestically

What is an 'open economy'?

What is a tariff?

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that

A tariff is

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.

A situation in which a country does not trade with other countries is called

Countries that engage in trade will tend to specialise in the production of goods and services in which they have ________ and will ________ these goods and services.

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

Table 13-2 Sarita and Gabriel own S&G Bakery.Table 13-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 13-2.Select the statement that accurately interprets the data in the table.

Table 13-6 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.Which country has an absolute advantage in producing clocks?

A tariff is a tax imposed by a government on

Table 13-6 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.Prior to trade,what was the opportunity cost to produce 1 hat in Denmark?

The main purpose of most tariffs and quotas is to

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

What is the difference between imports and exports?

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

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

Oligopoly: Firms in Less Competitive Markets

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

Countries that engage in trade will tend to specialise in the production of goods and services in which they have and will these goods and services.