Question 1

If the opportunity cost of production for two goods is different between two countries,then

Accepted Answer

A) trade cannot benefit either country. 
B) only one country can be made better off by trade. 
C) mutually beneficial trade is possible. 
D) trade will only benefit both countries if one can lower its opportunity costs. 
A) trade cannot benefit either country. 
B) only one country can be made better off by trade. 
C) mutually beneficial trade is possible. 
D) trade will only benefit both countries if one can lower its opportunity costs.

Question 2

Table 13-5
   Table 13-5 shows the output per week for bows and arrows by Ahmet and MyLinh.
-Refer to Table 13-5.
a.Which person has an absolute advantage in the production of bows? arrows?
b.Which person has a comparative advantage in the production of bows?
c.Which person has a comparative advantage in the production of arrows?

Accepted Answer

a.MyLinh has an absolute advantage in th

Question 3

Table 13-3
   Bryce and Tina are artisans who produce homemade candles and soap.Table 13-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 13-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Tina has a comparative advantage in making candles. 
B) Bryce has an absolute advantage in making soap. 
C) Bryce has a comparative advantage in making candles. 
D) Bryce has a comparative advantage in making candles and making soap. 
A) Tina has a comparative advantage in making candles. 
B) Bryce has an absolute advantage in making soap. 
C) Bryce has a comparative advantage in making candles. 
D) Bryce has a comparative advantage in making candles and making soap.

Question 4

The selling of a product for a price below its cost of production is called

Accepted Answer

A) fair competition. 
B) dumping. 
C) unfair competition. 
D) operating at a loss. 
A) fair competition. 
B) dumping. 
C) unfair competition. 
D) operating at a loss.

Question 5

A tariff is a tax imposed by a government on its own exports.

Accepted Answer

A) True 
 B)False

Question 6

One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify.Which of the following is a second reason?

Accepted Answer

A) The costs that tariffs and quotas impose on consumers are large in total but relatively small per person. 
B) People who benefit from foreign trade tend not to vote in elections;people who are harmed by foreign trade are much more likely to vote. 
C) Firms that benefit from trade barriers have more money to lobby government officials to support the barriers than do firms that are harmed by trade barriers. 
D) The benefits from free trade are less than the costs. 
A) The costs that tariffs and quotas impose on consumers are large in total but relatively small per person. 
B) People who benefit from foreign trade tend not to vote in elections;people who are harmed by foreign trade are much more likely to vote. 
C) Firms that benefit from trade barriers have more money to lobby government officials to support the barriers than do firms that are harmed by trade barriers. 
D) The benefits from free trade are less than the costs.

Question 7

Distinguish between a voluntary export restraint and a quota.

Accepted Answer

A voluntary export restraint is an agree

Question 8

Examples of ________ show how trade between two countries can make each better off.

Accepted Answer

A) absolute advantage 
B) comparative advantage 
C) autarky 
D) trade barriers 
A) absolute advantage 
B) comparative advantage 
C) autarky 
D) trade barriers

Question 9

Figure 13-1   Suppose the government imposes a $0.50 per pound tariff on sugar imports.Figure 13-1 shows the demand and supply curves for sugar and the impact of this tariff.
-Use Figure 13-1 to answer questions a-i.
a.Following the imposition of the tariff,what is the price that domestic consumers must now pay and what is the quantity purchased?
b.Calculate the value of consumer surplus with the tariff in place.
c.What is the quantity supplied by domestic sugar producers with the tariff in place?
d.Calculate the value of producer surplus received by Australian sugar producers with the tariff in place.
e.What is the quantity of sugar imported with the tariff in place?
f.What is the amount of tariff revenue collected by the government?
g.The tariff has reduced consumer surplus.Calculate the loss in consumer surplus due to the tariff.
h.What portion of the consumer surplus loss is redistributed to domestic producers? To the government?
i.Calculate the deadweight loss due to the tariff.

Accepted Answer

a.Price = $2.00 per pound;Quantity purch

Question 10

Trade only occurs if there are only winners,and no losers,as a result of the trade.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is the best example of a quota?

Accepted Answer

A) a subsidy from the government to domestic manufacturers of tires to enable them to compete more effectively with foreign producers 
B) a limit on the quantity of tires that can be imported from a foreign country 
C) a 40% fee imposed on all imported tires 
D) a tax placed on all tires sold in the domestic market to help offset the impact of lost jobs in the domestic tire industry 
A) a subsidy from the government to domestic manufacturers of tires to enable them to compete more effectively with foreign producers 
B) a limit on the quantity of tires that can be imported from a foreign country 
C) a 40% fee imposed on all imported tires 
D) a tax placed on all tires sold in the domestic market to help offset the impact of lost jobs in the domestic tire industry

Question 12

Why do domestic firms offshore production processes?

Accepted Answer

To reduce

Question 13

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Accepted Answer

A) Absolute advantage 
B) Specialisation 
C) Autarky 
D) Comparative advantage 
A) Absolute advantage 
B) Specialisation 
C) Autarky 
D) Comparative advantage

Question 14

Between 1960 and 2010,Australia's imports increased from approximately

Accepted Answer

A) 15% of GDP to 20% of GDP. 
B) 10% of GDP to 18% of GDP. 
C) 24% of GDP to 30% of GDP. 
D) 35% of GDP to 50% of GDP. 
A) 15% of GDP to 20% of GDP. 
B) 10% of GDP to 18% of GDP. 
C) 24% of GDP to 30% of GDP. 
D) 35% of GDP to 50% of GDP.

Question 15

Firms offshore

Accepted Answer

A) to obtain a higher quality product regardless of the cost. 
B) because domestic resources cannot do the job. 
C) to escape tariffs. 
D) because costs of production are lower if the firm uses resources in another country. 
A) to obtain a higher quality product regardless of the cost. 
B) because domestic resources cannot do the job. 
C) to escape tariffs. 
D) because costs of production are lower if the firm uses resources in another country.

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.Which country has a comparative advantage in producing hats?

Accepted Answer

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

Question 17

In 2009,approximately what proportion of world merchandise trade did Australia account for?

Accepted Answer

A) 1% 
B) 12% 
C) 8% 
D) 5% 
A) 1% 
B) 12% 
C) 8% 
D) 5%

Question 18

One of the main sources of comparative advantage is internal economies.

Accepted Answer

A) True 
 B)False

Question 19

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia can not benefit from trade with Norway.

Accepted Answer

A) True 
 B)False

Question 20

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

Accepted Answer

A) a non-tariff trade barrier. 
B) an export quota. 
C) an import quota. 
D) a voluntary export restraint. 
A) a non-tariff trade barrier. 
B) an export quota. 
C) an import quota. 
D) a voluntary export restraint.

If the opportunity cost of production for two goods is different between two countries,then

Table 13-3 Bryce and Tina are artisans who produce homemade candles and soap.Table 13-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 13-3.Select the statement that accurately interprets the data in the table.

The selling of a product for a price below its cost of production is called

A tariff is a tax imposed by a government on its own exports.

One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify.Which of the following is a second reason?

Distinguish between a voluntary export restraint and a quota.

Examples of ________ show how trade between two countries can make each better off.

Trade only occurs if there are only winners,and no losers,as a result of the trade.

Which of the following is the best example of a quota?

Why do domestic firms offshore production processes?

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Between 1960 and 2010,Australia's imports increased from approximately

Firms offshore

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 a comparative advantage in producing hats?

In 2009,approximately what proportion of world merchandise trade did Australia account for?

One of the main sources of comparative advantage is internal economies.

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia can not benefit from trade with Norway.

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

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

If the opportunity cost of production for two goods is different between two countries,then

Table 13-3 Bryce and Tina are artisans who produce homemade candles and soap.Table 13-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 13-3.Select the statement that accurately interprets the data in the table.

The selling of a product for a price below its cost of production is called

A tariff is a tax imposed by a government on its own exports.

One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify.Which of the following is a second reason?

Distinguish between a voluntary export restraint and a quota.

Examples of ________ show how trade between two countries can make each better off.

Trade only occurs if there are only winners,and no losers,as a result of the trade.

Which of the following is the best example of a quota?

Why do domestic firms offshore production processes?

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Between 1960 and 2010,Australia's imports increased from approximately

Firms offshore

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 a comparative advantage in producing hats?

In 2009,approximately what proportion of world merchandise trade did Australia account for?

One of the main sources of comparative advantage is internal economies.

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia can not benefit from trade with Norway.

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

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