Question 1

Quotas and tariffs both serve the purpose of

Accepted Answer

A) increasing foreign trade. 
B) restricting foreign trade. 
C) causing domestic producers to lose revenues. 
D) lowering prices on imported goods. 
A) increasing foreign trade. 
B) restricting foreign trade. 
C) causing domestic producers to lose revenues. 
D) lowering prices on imported goods.

Question 2

The principle of comparative advantage essentially states that

Accepted Answer

A) there are some goods for which the opportunity costs of production are the same regardless of who produces them. 
B) some goods have high opportunity costs and low absolute costs. 
C) specialization can reduce output rather than increasing it. 
D) total output of an economic system is greatest when each good is produced by those who have the lowest opportunity cost of producing the good. 
A) there are some goods for which the opportunity costs of production are the same regardless of who produces them. 
B) some goods have high opportunity costs and low absolute costs. 
C) specialization can reduce output rather than increasing it. 
D) total output of an economic system is greatest when each good is produced by those who have the lowest opportunity cost of producing the good.

Question 3

Mike and Mary each produce two goods.According to the principle of comparative advantage,the total output produced by the individuals will be greatest

Accepted Answer

A) if Mary produces both goods and Mike produces nothing. 
B) if each good is produced by the individual who has the lower opportunity cost of producing the good. 
C) if each good is produced by the individual who has the higher absolute cost of producing the good. 
D) if Mike produces both goods and Mary produces nothing. 
A) if Mary produces both goods and Mike produces nothing. 
B) if each good is produced by the individual who has the lower opportunity cost of producing the good. 
C) if each good is produced by the individual who has the higher absolute cost of producing the good. 
D) if Mike produces both goods and Mary produces nothing.

Question 4

In general,higher imports-to-GDP ratios are more likely,the

Accepted Answer

A) smaller the country. 
B) larger the country. 
C) richer the country. 
D) more agricultural the country. 
A) smaller the country. 
B) larger the country. 
C) richer the country. 
D) more agricultural the country.

Question 5

List and explain fully the arguments against free trade.

Accepted Answer

The discussion should be relat

Question 6

Specialization can lead to an increase in the production of all goods only if

Accepted Answer

A) the two nations specialized in the production of goods. 
B) each nation were to produce all goods. 
C) the opportunity cost of producing goods differs between two nations. 
D) neither country has a comparative advantage in the production of any good. 
A) the two nations specialized in the production of goods. 
B) each nation were to produce all goods. 
C) the opportunity cost of producing goods differs between two nations. 
D) neither country has a comparative advantage in the production of any good.

Question 7

The Uruguay round of GATT talks resulted in

Accepted Answer

A) reducing trade barriers and tariffs. 
B) increasing trade barriers and tariffs. 
C) lowering some trade barriers but increasing tariffs. 
D) no changes in tariffs or trade barriers. 
A) reducing trade barriers and tariffs. 
B) increasing trade barriers and tariffs. 
C) lowering some trade barriers but increasing tariffs. 
D) no changes in tariffs or trade barriers.

Question 8

Comparative advantage is defined as

Accepted Answer

A) producing all goods at lower opportunity costs than other countries can. 
B) producing more output of all goods than anyone else can. 
C) producing one good at a lower opportunity cost than another country can. 
D) the ability to produce more output from given inputs than anyone else can. 
A) producing all goods at lower opportunity costs than other countries can. 
B) producing more output of all goods than anyone else can. 
C) producing one good at a lower opportunity cost than another country can. 
D) the ability to produce more output from given inputs than anyone else can.

Question 9

Import restrictions

Accepted Answer

A) can protect Canadian jobs in the protected industry,which increases economic welfare of the country as a whole. 
B) can protect Canadian in the protected industry but will also lead to job reductions in other export industries. 
C) hurt people who work in importing companies,but makes consumers better off. 
D) cannot protect Canadian jobs in any sector of the economy. 
A) can protect Canadian jobs in the protected industry,which increases economic welfare of the country as a whole. 
B) can protect Canadian in the protected industry but will also lead to job reductions in other export industries. 
C) hurt people who work in importing companies,but makes consumers better off. 
D) cannot protect Canadian jobs in any sector of the economy.

Question 10

If Jane is five times more productive than Sally when working on the computer and three times more productive than Sally when doing accounting tasks,it is correct to state that

Accepted Answer

A) Jane has an absolute advantage in both accounting and computers when compared to Sally. 
B) Sally has a comparative advantage in computers. 
C) Sally has an absolute advantage in leisure. 
D) Sally should not be employed. 
A) Jane has an absolute advantage in both accounting and computers when compared to Sally. 
B) Sally has a comparative advantage in computers. 
C) Sally has an absolute advantage in leisure. 
D) Sally should not be employed.

Question 11

Given two economic systems,A and B,if economy A has a comparative advantage in the production of widgets,then

Accepted Answer

A) the inputs necessary to produce widgets in economy A cost less than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of some goods than economy B. 
D) economy A would not benefit from the specialization of production. 
A) the inputs necessary to produce widgets in economy A cost less than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of some goods than economy B. 
D) economy A would not benefit from the specialization of production.

Question 12

A tariff is

Accepted Answer

A) a subsidy on domestically produced goods. 
B) the difference between the world market price and the domestic price when a group of firms in an industry collude successfully. 
C) a tax on imported goods. 
D) a government imposed restriction on the quantity of a specific good that can be imported into the country and sold. 
A) a subsidy on domestically produced goods. 
B) the difference between the world market price and the domestic price when a group of firms in an industry collude successfully. 
C) a tax on imported goods. 
D) a government imposed restriction on the quantity of a specific good that can be imported into the country and sold.

Quotas and tariffs both serve the purpose of

The principle of comparative advantage essentially states that

Mike and Mary each produce two goods.According to the principle of comparative advantage,the total output produced by the individuals will be greatest

In general,higher imports-to-GDP ratios are more likely,the

List and explain fully the arguments against free trade.

Specialization can lead to an increase in the production of all goods only if

The Uruguay round of GATT talks resulted in

Comparative advantage is defined as

Import restrictions

If Jane is five times more productive than Sally when working on the computer and three times more productive than Sally when doing accounting tasks,it is correct to state that

Given two economic systems,A and B,if economy A has a comparative advantage in the production of widgets,then

A tariff is

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

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Exam 16: Comparative Advantage and the Open Economy

Quotas and tariffs both serve the purpose of

The principle of comparative advantage essentially states that

Mike and Mary each produce two goods.According to the principle of comparative advantage,the total output produced by the individuals will be greatest

In general,higher imports-to-GDP ratios are more likely,the

List and explain fully the arguments against free trade.

Specialization can lead to an increase in the production of all goods only if

The Uruguay round of GATT talks resulted in

Comparative advantage is defined as

Import restrictions

If Jane is five times more productive than Sally when working on the computer and three times more productive than Sally when doing accounting tasks,it is correct to state that

Given two economic systems,A and B,if economy A has a comparative advantage in the production of widgets,then

A tariff is

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