Question 1

Free trade ________ living standards by ________ economic efficiency.

Accepted Answer

A)  raises; increasing 
B)  lowers; decreasing 
C)  raises; equalizing 
D)  lowers; eliminating 
A)  raises; increasing 
B)  lowers; decreasing 
C)  raises; equalizing 
D)  lowers; eliminating

Question 2

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 that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Accepted Answer

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

Question 3

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 an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B)  Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C)  Sarita has an absolute advantage in baking pies and cakes. 
D)  Gabriel has an absolute advantage in baking pies and cakes. 
A)  Sarita has an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B)  Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C)  Sarita has an absolute advantage in baking pies and cakes. 
D)  Gabriel has an absolute advantage in baking pies and cakes.

Question 4

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

Accepted Answer

A)  $0. 
B)  $15. 
C)  $30. 
D)  $40. 
A)  $0. 
B)  $15. 
C)  $30. 
D)  $40.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

As a percentage of GDP,exports are greater than imports for which of the following countries?

Accepted Answer

A)  the United Kingdom 
B)  France 
C)  the United States 
D)  China 
A)  the United Kingdom 
B)  France 
C)  the United States 
D)  China

Question 7

The process of countries becoming more open to foreign trade and investment is known as

Accepted Answer

A)  autarky. 
B)  foreign exchange. 
C)  globalization. 
D)  protectionism. 
A)  autarky. 
B)  foreign exchange. 
C)  globalization. 
D)  protectionism.

Question 8

The U.S.economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

Accepted Answer

A) True 
 B)False

Question 9

Tastes for products such as beer differ.As a result

Accepted Answer

A)  we see countries specializing completely in the production of beer. 
B)  consumers of beer have difficulty deciding what type of imported beer to buy. 
C)  the quality of imported beer is less than it could be. 
D)  different countries may each have a comparative advantage in producing different types of beer. 
A)  we see countries specializing completely in the production of beer. 
B)  consumers of beer have difficulty deciding what type of imported beer to buy. 
C)  the quality of imported beer is less than it could be. 
D)  different countries may each have a comparative advantage in producing different types of beer.

Question 10

The intention of the U.S.tariff on Chinese tries was to

Accepted Answer

A)  protect jobs in the U. S. tire industry. 
B)  protect infant industries in tire U.S. tire market. 
C)  insure that Chinese tires meet U.S. quality and safety standards. 
D)  save the government money by restricting the sale of more expensive Chinese-made tires. 
A)  protect jobs in the U. S. tire industry. 
B)  protect infant industries in tire U.S. tire market. 
C)  insure that Chinese tires meet U.S. quality and safety standards. 
D)  save the government money by restricting the sale of more expensive Chinese-made tires.

Question 11

Figure 9-2   Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff.
-Refer to Figure 9-2.The tariff revenue collected by the government equals the area

Accepted Answer

A)  D + E + F. 
B)  E. 
C)  B + D + E + F. 
D)  C + D + E + F. 
A)  D + E + F. 
B)  E. 
C)  B + D + E + F. 
D)  C + D + E + F.

Question 12

Figure 9-5   Bragabong currently both produces and imports almonds. The government of Bragabong decides to restrict international trade in almonds by imposing a quota that allows imports of only 10 million kilos each year. Figure 9-5 shows the estimated demand and supply curves for almonds in Bragabong and the results of imposing the quota.
-Use Figure 9-5 to answer questions a-j .
a.If there is no quota what is the domestic price of almonds and what is the quantity of almonds demanded by consumers?
b.If there is no quota how many kilos of almonds would domestic producers supply and what quantity would be imported?
c.If there is no quota what is the dollar value of consumer surplus?
d.If there is no quota what is the dollar value of producer surplus received by producers in Bragabong?
e.If there is no quota what is the revenue received by foreign producers who supply almonds to Bragabong?
f.With a quota in place what is the price that consumers of Bragabong must now pay and what is the quantity demanded?
g.With a quota in place what is the dollar value of consumer surplus? Are consumers better off?
h.With a quota in place what is the dollar value of producer surplus received by producers in Bragabong? Are domestic producers better off?
i.Calculate the revenue to foreign producers who are granted permission to sell in Bragabong after the imposition of the quota.
j.Calculate the deadweight loss as a result of the quota.

Accepted Answer

a.Price without a quota = $3 per kilo; q

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Figure 9-1   Figure 9-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of consumer surplus?

Accepted Answer

A)  $0 
B)  $270 
C)  $305 
D)  $320. 
A)  $0 
B)  $270 
C)  $305 
D)  $320.

Question 15

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 16

In the 1970s and 1980s,the United States lost its comparative advantage in consumer electronics goods to Japan.What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?

Accepted Answer

A)  Japanese firms benefited from external economies. 
B)  Japan has abundant supplies of labor. 
C)  Japanese firms excelled in process technology. 
D)  Japan has abundant supplies of natural resources needed to produce electronics goods. 
A)  Japanese firms benefited from external economies. 
B)  Japan has abundant supplies of labor. 
C)  Japanese firms excelled in process technology. 
D)  Japan has abundant supplies of natural resources needed to produce electronics goods.

Question 17

Once a country has lost its comparative advantage in producing a good,its income will be ________ and its economy will be ________ if it switches from producing the good to importing it.

Accepted Answer

A)  higher; less efficient 
B)  higher; more efficient 
C)  lower; less efficient 
D)  lower; more efficient 
A)  higher; less efficient 
B)  higher; more efficient 
C)  lower; less efficient 
D)  lower; more efficient

Question 18

Figure 9-1   Figure 9-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

Accepted Answer

A)  5 units 
B)  10 units 
C)  15 units 
D)  20 units 
A)  5 units 
B)  10 units 
C)  15 units 
D)  20 units

Question 19

Japan has developed a comparative advantage in designing and producing automobiles.The source of its comparative advantage in these products is

Accepted Answer

A)  abundant supplies of natural resources. 
B)  a favorable climate. 
C)  a strong central government. 
D)  technology. 
A)  abundant supplies of natural resources. 
B)  a favorable climate. 
C)  a strong central government. 
D)  technology.

Question 20

Under autarky,consumer surplus is represented by the area

Accepted Answer

A)  above the supply curve and below the equilibrium price. 
B)  above the supply curve and below the demand curve. 
C)  below the demand curve and above the equilibrium price. 
D)  above the demand curve and below the supply curve. 
A)  above the supply curve and below the equilibrium price. 
B)  above the supply curve and below the demand curve. 
C)  below the demand curve and above the equilibrium price. 
D)  above the demand curve and below the supply curve.

Free trade living standards by economic efficiency.

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 that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

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

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

As a percentage of GDP,exports are greater than imports for which of the following countries?

The process of countries becoming more open to foreign trade and investment is known as

The U.S.economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

Tastes for products such as beer differ.As a result

The intention of the U.S.tariff on Chinese tries was to

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff revenue collected by the government equals the area

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

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of consumer surplus?

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

In the 1970s and 1980s,the United States lost its comparative advantage in consumer electronics goods to Japan.What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?

Once a country has lost its comparative advantage in producing a good,its income will be and its economy will be if it switches from producing the good to importing it.

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

Japan has developed a comparative advantage in designing and producing automobiles.The source of its comparative advantage in these products is

Under autarky,consumer surplus is represented by the area

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

Free trade ________ living standards by ________ economic efficiency.

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 that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

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

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

As a percentage of GDP,exports are greater than imports for which of the following countries?

The process of countries becoming more open to foreign trade and investment is known as

The U.S.economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

Tastes for products such as beer differ.As a result

The intention of the U.S.tariff on Chinese tries was to

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.The tariff revenue collected by the government equals the area

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

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of consumer surplus?

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

In the 1970s and 1980s,the United States lost its comparative advantage in consumer electronics goods to Japan.What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?

Once a country has lost its comparative advantage in producing a good,its income will be ________ and its economy will be ________ if it switches from producing the good to importing it.

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

Japan has developed a comparative advantage in designing and producing automobiles.The source of its comparative advantage in these products is

Under autarky,consumer surplus is represented by the area

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

Free trade living standards by economic efficiency.

Once a country has lost its comparative advantage in producing a good,its income will be and its economy will be if it switches from producing the good to importing it.