Question 1

Which of the following statements is used to justify protectionism?

Accepted Answer

A)  Free trade leads to higher prices for imported goods. 
B)  Free trade increases employment by protecting domestic firms. 
C)  A country should not rely on other countries for goods that are critical to its national defense. 
D)  Trade restrictions are not necessary to protect new firms since they can gain experience and become more productive without protection. 
A)  Free trade leads to higher prices for imported goods. 
B)  Free trade increases employment by protecting domestic firms. 
C)  A country should not rely on other countries for goods that are critical to its national defense. 
D)  Trade restrictions are not necessary to protect new firms since they can gain experience and become more productive without protection.

Question 2

Figure 9-1   Figure 9-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 9-1.Under autarky,the consumer surplus is

Accepted Answer

A)  $195. 
B)  $260. 
C)  $300. 
D)  $555. 
A)  $195. 
B)  $260. 
C)  $300. 
D)  $555.

Question 3

Exports are domestically produced goods and services

Accepted Answer

A)  sold to other countries. 
B)  sold to the government. 
C)  sold at home. 
D)  which are used to produce other goods and services. 
A)  sold to other countries. 
B)  sold to the government. 
C)  sold at home. 
D)  which are used to produce other goods and services.

Question 4

Which of the following statements is true?

Accepted Answer

A)  Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B)  Each year China exports about 50 percent of its wheat crop and 40 percent of its rice crop. 
C)  Most of the leading exporting countries are large, high-income countries. 
D)  All sectors of the U.S. economy are affected equally by international trade. 
A)  Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs. 
B)  Each year China exports about 50 percent of its wheat crop and 40 percent of its rice crop. 
C)  Most of the leading exporting countries are large, high-income countries. 
D)  All sectors of the U.S. economy are affected equally by international trade.

Question 5

Table 9-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Denmark consume?

Accepted Answer

A)  270 
B)  900 
C)  930 
D)  1,200 
A)  270 
B)  900 
C)  930 
D)  1,200

Question 6

What is the difference between imports and exports?

Accepted Answer

Imports are goods and services

Question 7

If a country has a comparative advantage in producing a product,it may not have an absolute advantage in producing that product.

Accepted Answer

A) True 
 B)False

Question 8

Today,the United States charged an average tariff rate

Accepted Answer

A)  that is more than its average tariff rate in 1930. 
B)  which is greater than any other high-income country. 
C)  of less than 2 percent. 
D)  that exceeds 50 percent. 
A)  that is more than its average tariff rate in 1930. 
B)  which is greater than any other high-income country. 
C)  of less than 2 percent. 
D)  that exceeds 50 percent.

Question 9

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Accepted Answer

A) True 
 B)False

Question 10

Table 9-3
   Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 9-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Tina has a comparative advantage in making soap. 
B)  Bryce has a comparative advantage in making soap. 
C)  Tina has a comparative advantage in making candles and making soap. 
D)  Neither Bryce nor Tina has a comparative advantage in making soap. 
A)  Tina has a comparative advantage in making soap. 
B)  Bryce has a comparative advantage in making soap. 
C)  Tina has a comparative advantage in making candles and making soap. 
D)  Neither Bryce nor Tina has a comparative advantage in making soap.

Question 11

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent ________ on imported tires and ________ on U.S.-produced tires.

Accepted Answer

A)  more; more 
B)  more; less 
C)  less; more 
D)  less; less 
A)  more; more 
B)  more; less 
C)  less; more 
D)  less; less

Question 12

Table 9-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.Prior to trade,what was the opportunity cost to produce 1 clock in Belize?

Accepted Answer

A)  1/6 of a hat 
B)  2/3 of a hat 
C)  1.5 hats 
D)  6 hats 
A)  1/6 of a hat 
B)  2/3 of a hat 
C)  1.5 hats 
D)  6 hats

Question 13

One reason a country does not specialize completely in production is that not all goods and services are traded internationally.

Accepted Answer

A) True 
 B)False

Question 14

Goodyear's sales are now greater outside the United States than inside the United States.

Accepted Answer

A) True 
 B)False

Question 15

Table 9-1
   Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week.
-Refer to Table 9-1.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Linda has a comparative advantage in dog bathing. 
B)  Sandy has an absolute advantage in dog bathing. 
C)  Sandy has a comparative advantage in dog bathing. 
D)  Linda has a comparative advantage in dog grooming and dog bathing. 
A)  Linda has a comparative advantage in dog bathing. 
B)  Sandy has an absolute advantage in dog bathing. 
C)  Sandy has a comparative advantage in dog bathing. 
D)  Linda has a comparative advantage in dog grooming and dog bathing.

Question 16

Table 9-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Belize consume?

Accepted Answer

A)  150 
B)  270 
C)  930 
D)  1,200 
A)  150 
B)  270 
C)  930 
D)  1,200

Question 17

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 18

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 19

Table 9-3
   Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 9-3.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 20

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 consumer surplus after the imposition of the quota?

Accepted Answer

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

Which of the following statements is used to justify protectionism?

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky,the consumer surplus is

Exports are domestically produced goods and services

Which of the following statements is true?

What is the difference between imports and exports?

If a country has a comparative advantage in producing a product,it may not have an absolute advantage in producing that product.

Today,the United States charged an average tariff rate

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Table 9-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 9-3.Select the statement that accurately interprets the data in the table.

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent on imported tires and on U.S.-produced tires.

One reason a country does not specialize completely in production is that not all goods and services are traded internationally.

Goodyear's sales are now greater outside the United States than inside the United States.

Table 9-1 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 9-1.Select the statement that accurately interprets the data in the table.

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

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

Table 9-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 9-3.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 consumer surplus after the imposition of the quota?

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 is used to justify protectionism?

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky,the consumer surplus is

Exports are domestically produced goods and services

Which of the following statements is true?

What is the difference between imports and exports?

If a country has a comparative advantage in producing a product,it may not have an absolute advantage in producing that product.

Today,the United States charged an average tariff rate

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Table 9-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 9-3.Select the statement that accurately interprets the data in the table.

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent ________ on imported tires and ________ on U.S.-produced tires.

One reason a country does not specialize completely in production is that not all goods and services are traded internationally.

Goodyear's sales are now greater outside the United States than inside the United States.

Table 9-1 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 9-1.Select the statement that accurately interprets the data in the table.

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

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

Table 9-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 9-3.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 consumer surplus after the imposition of the quota?

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

As a result of the tariff on Chinese tires,U.S.consumers are estimated to have spent on imported tires and on U.S.-produced tires.