Question 1

A voluntary export restraint (VER)occurs when .

Accepted Answer

A) a country voluntarily agrees to restrict its exports to another country 
B) a country has open access to another county's markets. 
C) a mandated tariff.is in effect 
D) a mandated agreement forces all parties to restrict output in the home country. 
A) a country voluntarily agrees to restrict its exports to another country 
B) a country has open access to another county's markets. 
C) a mandated tariff.is in effect 
D) a mandated agreement forces all parties to restrict output in the home country.

Question 2

If country X can produce a unit of good 1 with fewer resources than can country Y,it is correct to state that country X

Accepted Answer

A) has a comparative advantage in producing good 1. 
B) has an absolute advantage in producing good 1. 
C) will export good 1 to country Y. 
D) will not produce good 1. 
A) has a comparative advantage in producing good 1. 
B) has an absolute advantage in producing good 1. 
C) will export good 1 to country Y. 
D) will not produce good 1.

Question 3

Overall,since the 1930s,tariff rates in Canada have

Accepted Answer

A) increased. 
B) decreased. 
C) remained unchanged. 
D) become very unstable,changing week-to-week. 
A) increased. 
B) decreased. 
C) remained unchanged. 
D) become very unstable,changing week-to-week.

Question 4

If there are two goods and two countries,then one country can have

Accepted Answer

A) an absolute advantage in both goods but a comparative advantage in only one good. 
B) an absolute advantage in both goods and a comparative advantage in both goods. 
C) an absolute advantage in one good,an absolute disadvantage in the other good,and a comparative advantage in neither. 
D) an absolute advantage in neither good and a comparative advantage in both goods. 
A) an absolute advantage in both goods but a comparative advantage in only one good. 
B) an absolute advantage in both goods and a comparative advantage in both goods. 
C) an absolute advantage in one good,an absolute disadvantage in the other good,and a comparative advantage in neither. 
D) an absolute advantage in neither good and a comparative advantage in both goods.

Question 5

The effect of a quota is to

Accepted Answer

A) increase quantity supplied and lower price. 
B) increase quantity supplied and increase price. 
C) increase demand for the good and increase price. 
D) reduce the quantity supplied and raise price. 
A) increase quantity supplied and lower price. 
B) increase quantity supplied and increase price. 
C) increase demand for the good and increase price. 
D) reduce the quantity supplied and raise price.

Question 6

Suppose that the opportunity cost of producing goods differs between two nations.We can correctly state that

Accepted Answer

A) the two nations should not specialize in the production of goods. 
B) each nation should produce all goods. 
C) one country has a comparative advantage in the production of at least one of the goods. 
D) neither country has a comparative advantage in the production of any good. 
A) the two nations should not specialize in the production of goods. 
B) each nation should produce all goods. 
C) one country has a comparative advantage in the production of at least one of the goods. 
D) neither country has a comparative advantage in the production of any good.

Question 7

International price discrimination is also known as

Accepted Answer

A) dumping 
B) a tariff 
C) a quota 
D) countervailing duty. 
A) dumping 
B) a tariff 
C) a quota 
D) countervailing duty.

Question 8

Explain why specialization and trade increases a country's overall level of consumption through comparative advantage..

Accepted Answer

A country specializes in the activities

Question 9

What is the difference between a quota and a tariff in restricting foreign trade?

Accepted Answer

A quota is a government imposed restrict

Question 10

Dumping is defined as

Accepted Answer

A) selling a good abroad at prices below the costs of the firms in the foreign countries. 
B) exporting goods that are of inferior quality. 
C) selling a good abroad at prices below its cost of production or below the price charged in the home market. 
D) exporting goods that are sources of pollution. 
A) selling a good abroad at prices below the costs of the firms in the foreign countries. 
B) exporting goods that are of inferior quality. 
C) selling a good abroad at prices below its cost of production or below the price charged in the home market. 
D) exporting goods that are sources of pollution.

Question 11

The notion that every country has a comparative advantage in something is an example of to

Accepted Answer

A) quota theory. 
B) the infant industry argument. 
C) international trade theory 
D) less developed countries cannot trade successfully with developed countries. 
A) quota theory. 
B) the infant industry argument. 
C) international trade theory 
D) less developed countries cannot trade successfully with developed countries.

Question 12

What must a government know for the infant industry argument to be a valid reason for imposing tariffs?

Accepted Answer

The government must be able to determine

Question 13

What are the effects of a tariff on a good?

Accepted Answer

A tariff taxes the imports of a good,whi

Question 14

"It is possible to restrict imports and still maintain a fixed level of exports." Do you agree or disagree? Why?

Accepted Answer

Disagree.If people sell fewer imports to

Question 15

A difference between a quota and a tariff is that

Accepted Answer

A) a tariff generates a higher price than a quota does. 
B) a tariff generates a greater reduction in exports. 
C) a quota increases profits of domestic producers more than a tariff does. 
D) the government collects revenues from a tariff,which does not happen with a quota. 
A) a tariff generates a higher price than a quota does. 
B) a tariff generates a greater reduction in exports. 
C) a quota increases profits of domestic producers more than a tariff does. 
D) the government collects revenues from a tariff,which does not happen with a quota.

Question 16

The WTO is responsible for

Accepted Answer

A) handling trade disputes among its members. 
B) agreements between the U.S.and Mexico only. 
C) implementing protectionism. 
D) restricting foreign trade. 
A) handling trade disputes among its members. 
B) agreements between the U.S.and Mexico only. 
C) implementing protectionism. 
D) restricting foreign trade.

Question 17

Construct a descriptive example of your demonstrating the gains from trade.

Accepted Answer

The solution would be specific to the st

Question 18

The infant industry argument suggests that

Accepted Answer

A) a country needs tariff protection since it has no comparative advantage in the production of any good. 
B) a country needs protection against unfair trade practices. 
C) an industry may need temporary tariff protection until the industry matures. 
D) the industry has no potential and must be protected to survive. 
A) a country needs tariff protection since it has no comparative advantage in the production of any good. 
B) a country needs protection against unfair trade practices. 
C) an industry may need temporary tariff protection until the industry matures. 
D) the industry has no potential and must be protected to survive.

Question 19

A quota is

Accepted Answer

A) a tariff imposed on goods that are dumped in the country. 
B) a law that prevents ecologically damaging goods to be imported into a country. 
C) a market-imposed balancing factor that keeps prices of imports and exports in equilibrium. 
D) a government-imposed restriction on the quantity of a specific good that can be imported. 
A) a tariff imposed on goods that are dumped in the country. 
B) a law that prevents ecologically damaging goods to be imported into a country. 
C) a market-imposed balancing factor that keeps prices of imports and exports in equilibrium. 
D) a government-imposed restriction on the quantity of a specific good that can be imported.

Question 20

If a country voluntarily agrees to restrict its exports to another country,the country is said to have

Accepted Answer

A) a voluntary export restraint (VER). 
B) a voluntary restraint agreement (VR
A) . 
C) a mandated tariff. 
D) a mandated agreement. 
A) a voluntary export restraint (VER). 
B) a voluntary restraint agreement (VR
A) . 
C) a mandated tariff. 
D) a mandated agreement.

A voluntary export restraint (VER)occurs when .

If country X can produce a unit of good 1 with fewer resources than can country Y,it is correct to state that country X

Overall,since the 1930s,tariff rates in Canada have

If there are two goods and two countries,then one country can have

The effect of a quota is to

Suppose that the opportunity cost of producing goods differs between two nations.We can correctly state that

International price discrimination is also known as

Explain why specialization and trade increases a country's overall level of consumption through comparative advantage..

What is the difference between a quota and a tariff in restricting foreign trade?

Dumping is defined as

The notion that every country has a comparative advantage in something is an example of to

What must a government know for the infant industry argument to be a valid reason for imposing tariffs?

What are the effects of a tariff on a good?

"It is possible to restrict imports and still maintain a fixed level of exports." Do you agree or disagree? Why?

A difference between a quota and a tariff is that

The WTO is responsible for

Construct a descriptive example of your demonstrating the gains from trade.

The infant industry argument suggests that

A quota is

If a country voluntarily agrees to restrict its exports to another country,the country is said to have

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Exchange Rates and the Balance of Payments

Filters

Exam 16: Comparative Advantage and the Open Economy

A voluntary export restraint (VER)occurs when .

If country X can produce a unit of good 1 with fewer resources than can country Y,it is correct to state that country X

Overall,since the 1930s,tariff rates in Canada have

If there are two goods and two countries,then one country can have

The effect of a quota is to

Suppose that the opportunity cost of producing goods differs between two nations.We can correctly state that

International price discrimination is also known as

Explain why specialization and trade increases a country's overall level of consumption through comparative advantage..

What is the difference between a quota and a tariff in restricting foreign trade?

Dumping is defined as

The notion that every country has a comparative advantage in something is an example of to

What must a government know for the infant industry argument to be a valid reason for imposing tariffs?

What are the effects of a tariff on a good?

"It is possible to restrict imports and still maintain a fixed level of exports." Do you agree or disagree? Why?

A difference between a quota and a tariff is that

The WTO is responsible for

Construct a descriptive example of your demonstrating the gains from trade.

The infant industry argument suggests that

A quota is

If a country voluntarily agrees to restrict its exports to another country,the country is said to have

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Exchange Rates and the Balance of Payments

Filters