Question 1

Which of the following statements about the importance of trade to the U.S.economy is true?

Accepted Answer

A)  Since 1950, both exports and imports have steadily decreased as a fraction of U.S. gross domestic product. 
B)  Overall, about 80 percent of U.S. manufacturing jobs depend directly or indirectly on exports. 
C)  The United States is the second largest exporter in the world. 
D)  The U.S. economy is highly dependent on international trade for growth in its gross domestic product. 
A)  Since 1950, both exports and imports have steadily decreased as a fraction of U.S. gross domestic product. 
B)  Overall, about 80 percent of U.S. manufacturing jobs depend directly or indirectly on exports. 
C)  The United States is the second largest exporter in the world. 
D)  The U.S. economy is highly dependent on international trade for growth in its gross domestic product.

Question 2

Goodyear's sales were negatively affected by the tariff on Chinese tires because

Accepted Answer

A)  Goodyear operates factories in China, and some of the tires produced there were exported to the United States and subject to the tariff. 
B)  China retaliated and imposed a tariff on Goodyear tires exported to China. 
C)  despite being a U.S. company, all of Goodyear's tires are produced in China. 
D)  the tariff raised the price on Chinese tires, allowing these tires to compete more directly with the more expensive Goodyear tires. 
A)  Goodyear operates factories in China, and some of the tires produced there were exported to the United States and subject to the tariff. 
B)  China retaliated and imposed a tariff on Goodyear tires exported to China. 
C)  despite being a U.S. company, all of Goodyear's tires are produced in China. 
D)  the tariff raised the price on Chinese tires, allowing these tires to compete more directly with the more expensive Goodyear tires.

Question 3

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 4

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

Accepted Answer

A)  The criticisms of economists are based on theory. In fact, protectionism increases consumer and producer surplus as well as employment. 
B)  Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C)  Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D)  Supporters of protectionism believe that free trade will lead to inflation. 
A)  The criticisms of economists are based on theory. In fact, protectionism increases consumer and producer surplus as well as employment. 
B)  Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. 
C)  Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage. 
D)  Supporters of protectionism believe that free trade will lead to inflation.

Question 5

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

Accepted Answer

A)  agree to meet specific quality standards required by the importing country. 
B)  limit their exports to a country. 
C)  pay a tax on all products they export. 
D)  must agree to import an equal quantity of products that they export. 
A)  agree to meet specific quality standards required by the importing country. 
B)  limit their exports to a country. 
C)  pay a tax on all products they export. 
D)  must agree to import an equal quantity of products that they export.

Question 6

Free trade refers to trade between countries without government restrictions.

Accepted Answer

A) True 
 B)False

Question 7

Table 9-2
   Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 9-2.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 8

Figure 9-3   Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.What is the area of domestic producer surplus after the imposition of a quota?

Accepted Answer

A)  B 
B)  B + C 
C)  B + E + I + J + M 
D)  E + I + J + M 
A)  B 
B)  B + C 
C)  B + E + I + J + M 
D)  E + I + J + M

Question 9

What does it mean for a country to have an absolute advantage in producing a product?

Accepted Answer

A country has an absolute adva

Which of the following statements about the importance of trade to the U.S.economy is true?

Goodyear's sales were negatively affected by the tariff on Chinese tires because

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

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

Free trade refers to trade between countries without government restrictions.

Table 9-2 Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area of domestic producer surplus after the imposition of a quota?

What does it mean for a country to have an absolute advantage in producing a product?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

Exam 9: Comparative Advantage and the Gains From International Trade

Which of the following statements about the importance of trade to the U.S.economy is true?

Goodyear's sales were negatively affected by the tariff on Chinese tires because

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

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

Free trade refers to trade between countries without government restrictions.

Table 9-2 Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area of domestic producer surplus after the imposition of a quota?

What does it mean for a country to have an absolute advantage in producing a product?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters