Question 1

Some argue that U.S.workers cannot compete with cheap labor from many developing nations.This

Accepted Answer

A) is true and is a justification for tariffs to protect domestic jobs. 
B) is true and it is has been found that tariffs in these cases can save thousands of jobs and benefit the economy. 
C) is true but the benefits of free trade are still such that tariffs should not be placed on these industries. 
D) is not true,as evidenced by the fact that the United States carries on a lot of trade with countries that have lower wages. 
A) is true and is a justification for tariffs to protect domestic jobs. 
B) is true and it is has been found that tariffs in these cases can save thousands of jobs and benefit the economy. 
C) is true but the benefits of free trade are still such that tariffs should not be placed on these industries. 
D) is not true,as evidenced by the fact that the United States carries on a lot of trade with countries that have lower wages.

Question 2

All of the following are reasons that trade between nations is beneficial EXCEPT

Accepted Answer

A) gains from specialization. 
B) exchange of ideas. 
C) protection of domestic industries. 
D) gains from trade. 
A) gains from specialization. 
B) exchange of ideas. 
C) protection of domestic industries. 
D) gains from trade.

Question 3

If a country voluntarily agrees to have its companies import more goods from another country,the country has

Accepted Answer

A) a voluntary import expansion (VI
E) agreement. 
B) a voluntary restraint agreement (VR
A) . 
C) a mandated tariff. 
D) a mandated agreement. 
A) a voluntary import expansion (VI
E) agreement. 
B) a voluntary restraint agreement (VR
A) . 
C) a mandated tariff. 
D) a mandated agreement.

Question 4

Suppose that opportunity costs are constant in both France and Germany.In France,maximum feasible hourly production levels are either 3 units of wheat or 5 units of wine.In Germany,maximum feasible hourly production levels are either 4 units of wheat or 10 units of wine.It is correct to state that

Accepted Answer

A) Germany has an comparative advantage in producing both wheat and wine. 
B) Germany has a comparative advantage in producing wine. 
C) France has a comparative advantage in producing both wheat and wine. 
D) France has a comparative advantage in producing wine. 
A) Germany has an comparative advantage in producing both wheat and wine. 
B) Germany has a comparative advantage in producing wine. 
C) France has a comparative advantage in producing both wheat and wine. 
D) France has a comparative advantage in producing wine.

Question 5

Dumping is

Accepted Answer

A) selling a good abroad in huge quantities at a very low price. 
B) exporting goods that are sources of pollution. 
C) exporting goods that are of inferior quality relative to the goods sold in the domestic market. 
D) selling a good abroad at a price below cost or below the price charged in the domestic market. 
A) selling a good abroad in huge quantities at a very low price. 
B) exporting goods that are sources of pollution. 
C) exporting goods that are of inferior quality relative to the goods sold in the domestic market. 
D) selling a good abroad at a price below cost or below the price charged in the domestic market.

Question 6

The European Union started out as a

Accepted Answer

A) regional trade agreement. 
B) union of nations with identical currency. 
C) union of nations where the same language was spoken. 
D) union of nations with identical tariffs. 
A) regional trade agreement. 
B) union of nations with identical currency. 
C) union of nations where the same language was spoken. 
D) union of nations with identical tariffs.

Question 7

If Abigail can produce 4 tablets or 3 radios in a day,while Jacob can produce 1 tablet or 2 radios,then it is correct to state that

Accepted Answer

A) Abigail has a comparative advantage in producing radios. 
B) Abigail has an absolute advantage in producing computers but not radios. 
C) Jacob has a comparative advantage in radios. 
D) Jacob has an absolute advantage in radios. 
A) Abigail has a comparative advantage in producing radios. 
B) Abigail has an absolute advantage in producing computers but not radios. 
C) Jacob has a comparative advantage in radios. 
D) Jacob has an absolute advantage in radios.

Question 8

The infant industry argument says that

Accepted Answer

A) tariffs should be imposed to allow a new industry in a country to get established. 
B) dumping should be allowed in order to establish a presence of an industry that has previously not had a presence in another country. 
C) countries should produce and trade goods according to their comparative advantage. 
D) imports should target new products from other countries to take advantage of the transmission of new ideas. 
A) tariffs should be imposed to allow a new industry in a country to get established. 
B) dumping should be allowed in order to establish a presence of an industry that has previously not had a presence in another country. 
C) countries should produce and trade goods according to their comparative advantage. 
D) imports should target new products from other countries to take advantage of the transmission of new ideas.

Question 9

International trade is based on the existence of

Accepted Answer

A) absolute advantage. 
B) perfect advantage. 
C) productivity advantage. 
D) comparative advantage. 
A) absolute advantage. 
B) perfect advantage. 
C) productivity advantage. 
D) comparative advantage.

Question 10

"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 11

A government-imposed restriction on the quantity of a specific good that may be imported to and sold in the United States is called a

Accepted Answer

A) tariff system. 
B) quota system. 
C) reverse-trade system. 
D) union trade system. 
A) tariff system. 
B) quota system. 
C) reverse-trade system. 
D) union trade system.

Question 12

An agreement with another country in which it agrees to import more from the United States is called a

Accepted Answer

A) VRA. 
B) VIE. 
C) VAR. 
D) VAT. 
A) VRA. 
B) VIE. 
C) VAR. 
D) VAT.

Question 13

Maximum Feasible Hourly Production Rates for Either
Food or Cloth Using All Available Resources $$\begin{array} { l c r } 
\hline& \text { Food } & \text { Cloth } \
\hline \text { U.S. } & 4 & 3 \
\text { Mexico } & 12 & 6 \
\hline
\end{array}$$
-Using the data in the above table and assuming constant opportunity costs,it is correct to state that

Accepted Answer

A) the United States has an absolute advantage in producing cloth. 
B) Mexico has a comparative advantage in producing food. 
C) the United States has a comparative advantage in producing both food and cloth. 
D) Mexico has an absolute advantage in producing both food and cloth. 
A) the United States has an absolute advantage in producing cloth. 
B) Mexico has a comparative advantage in producing food. 
C) the United States has a comparative advantage in producing both food and cloth. 
D) Mexico has an absolute advantage in producing both food and cloth.

Question 14

An international agreement from 1947 designed to lower tariffs was

Accepted Answer

A) the General Agreement on Tariffs and Trade. 
B) the World Trade Organization. 
C) the World Agreement on Tariffs and Trade. 
D) the Trade and Tariff Agreement. 
A) the General Agreement on Tariffs and Trade. 
B) the World Trade Organization. 
C) the World Agreement on Tariffs and Trade. 
D) the Trade and Tariff Agreement.

Question 15

Maximum Feasible Hourly Production Rates of Either 
Computers or Bicycles Using All Available Resources
$$\begin{array}{l}
\begin{array} {l ll }

Product & United States & Mexico \
\hline Computers & 8 & 3 \
Bicycles & 2 & 6
\end{array}
\end{array}$$a
-Refer to the above table.Assuming that opportunity costs are constant,the opportunity cost of producing a computer in the United States is equal to ________,and the opportunity cost of producing a computer in Mexico is ________.

Accepted Answer

A) 4 bicycles; 0.5 bicycles 
B) 0.25 bicycle; 2 bicycles 
C) 2.67 computers; 0.33 bicycles 
D) 0.375 bicycle; 3 computers 
A) 4 bicycles; 0.5 bicycles 
B) 0.25 bicycle; 2 bicycles 
C) 2.67 computers; 0.33 bicycles 
D) 0.375 bicycle; 3 computers

Question 16

The infant-industry argument for tariff protection is that tariffs should be imposed to protect from competition

Accepted Answer

A) industries that are essential if a country is to become an industrial nation. 
B) industries needed for national defense. 
C) industries that cannot compete with foreign competitors at this point in time,but will be able to once they gain some size and experience. 
D) industries that can compete with foreign competitors at this point in time and are deemed essential by the government. 
A) industries that are essential if a country is to become an industrial nation. 
B) industries needed for national defense. 
C) industries that cannot compete with foreign competitors at this point in time,but will be able to once they gain some size and experience. 
D) industries that can compete with foreign competitors at this point in time and are deemed essential by the government.

Question 17

Restrictions on imports

Accepted Answer

A) eventually reduce exports,too. 
B) enhance economic welfare by encouraging more exports. 
C) are the quickest way for a country in recession to start on a path of economic recovery. 
D) usually have no long-run effects on an economy. 
A) eventually reduce exports,too. 
B) enhance economic welfare by encouraging more exports. 
C) are the quickest way for a country in recession to start on a path of economic recovery. 
D) usually have no long-run effects on an economy.

Question 18

Maximum Feasible Hourly Production Rates of Either 
Computers or Bicycles Using All Available Resources
$$\begin{array}{l}
\begin{array} {l ll }

Product & United States & Mexico \
\hline Computers & 8 & 3 \
Bicycles & 2 & 6
\end{array}
\end{array}$$a
-Refer to the above table.If opportunity costs are constant and the two countries trade,

Accepted Answer

A) the United States should specialize in computers and Mexico in bicycles. 
B) the United States should specialize in bicycles and Mexico in computers. 
C) the United States should specialize in both bicycles and computers,and Mexico should specialize in neither. 
D) there will be no trade because they are so different. 
A) the United States should specialize in computers and Mexico in bicycles. 
B) the United States should specialize in bicycles and Mexico in computers. 
C) the United States should specialize in both bicycles and computers,and Mexico should specialize in neither. 
D) there will be no trade because they are so different.

Question 19

One problem with the infant industry argument is that

Accepted Answer

A) the protection is typically never removed,creating a domestic monopoly. 
B) it fails to protect domestic industries from foreign competition. 
C) it must be approved by the IMF and the World Bank. 
D) it must be approved by the Federal Reserve Board. 
A) the protection is typically never removed,creating a domestic monopoly. 
B) it fails to protect domestic industries from foreign competition. 
C) it must be approved by the IMF and the World Bank. 
D) it must be approved by the Federal Reserve Board.

Question 20

Dumping is considered a practice that seriously harms domestic producers because

Accepted Answer

A) the quality of the dumped good is superior to that of the importing country. 
B) it allows the exporting country to use poor quality materials. 
C) it establishes a price that cannot be met by domestic producers. 
D) it discriminates between wealthy and poor countries. 
A) the quality of the dumped good is superior to that of the importing country. 
B) it allows the exporting country to use poor quality materials. 
C) it establishes a price that cannot be met by domestic producers. 
D) it discriminates between wealthy and poor countries.

Some argue that U.S.workers cannot compete with cheap labor from many developing nations.This

All of the following are reasons that trade between nations is beneficial EXCEPT

If a country voluntarily agrees to have its companies import more goods from another country,the country has

Suppose that opportunity costs are constant in both France and Germany.In France,maximum feasible hourly production levels are either 3 units of wheat or 5 units of wine.In Germany,maximum feasible hourly production levels are either 4 units of wheat or 10 units of wine.It is correct to state that

Dumping is

The European Union started out as a

If Abigail can produce 4 tablets or 3 radios in a day,while Jacob can produce 1 tablet or 2 radios,then it is correct to state that

The infant industry argument says that

International trade is based on the existence of

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

A government-imposed restriction on the quantity of a specific good that may be imported to and sold in the United States is called a

An agreement with another country in which it agrees to import more from the United States is called a

Maximum Feasible Hourly Production Rates for Either Food or Cloth Using All Available Resources Food Cloth U.S. 4 3 Mexico 12 6 -Using the data in the above table and assuming constant opportunity costs,it is correct to state that

An international agreement from 1947 designed to lower tariffs was

The infant-industry argument for tariff protection is that tariffs should be imposed to protect from competition

Restrictions on imports

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product UnitedStates Mexico Computers 8 3 Bicycles 2 6 a -Refer to the above table.If opportunity costs are constant and the two countries trade,

One problem with the infant industry argument is that

Dumping is considered a practice that seriously harms domestic producers because

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Exchange Rates and the Balance of Payments

Filters

Exam 19: Comparative Advantage and the Open Economy

Some argue that U.S.workers cannot compete with cheap labor from many developing nations.This

All of the following are reasons that trade between nations is beneficial EXCEPT

If a country voluntarily agrees to have its companies import more goods from another country,the country has

Suppose that opportunity costs are constant in both France and Germany.In France,maximum feasible hourly production levels are either 3 units of wheat or 5 units of wine.In Germany,maximum feasible hourly production levels are either 4 units of wheat or 10 units of wine.It is correct to state that

Dumping is

The European Union started out as a

If Abigail can produce 4 tablets or 3 radios in a day,while Jacob can produce 1 tablet or 2 radios,then it is correct to state that

The infant industry argument says that

International trade is based on the existence of

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

A government-imposed restriction on the quantity of a specific good that may be imported to and sold in the United States is called a

An agreement with another country in which it agrees to import more from the United States is called a

Maximum Feasible Hourly Production Rates for Either Food or Cloth Using All Available Resources Food Cloth U.S. 4 3 Mexico 12 6 -Using the data in the above table and assuming constant opportunity costs,it is correct to state that

An international agreement from 1947 designed to lower tariffs was

The infant-industry argument for tariff protection is that tariffs should be imposed to protect from competition

Restrictions on imports

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product UnitedStates Mexico Computers 8 3 Bicycles 2 6 a -Refer to the above table.If opportunity costs are constant and the two countries trade,

One problem with the infant industry argument is that

Dumping is considered a practice that seriously harms domestic producers because

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Exchange Rates and the Balance of Payments

Filters