Question 1

The contention that tariffs should be imposed to when a foreign government provides financial assistance its producers is

Accepted Answer

A) a national defense concern. 
B) the infant industry argument. 
C) dumping. 
D) to counter foreign subsidies. 
A) a national defense concern. 
B) the infant industry argument. 
C) dumping. 
D) to counter foreign subsidies.

Question 2

An import quota will make the supply curve for the imported good

Accepted Answer

A) perfectly inelastic. 
B) perfectly elastic. 
C) unitary elastic. 
D) negatively sloped. 
A) perfectly inelastic. 
B) perfectly elastic. 
C) unitary elastic. 
D) negatively sloped.

Question 3

A tariff placed on a foreign good will

Accepted Answer

A) reduce the price of a competing domestic good. 
B) increase the price of a competing domestic good. 
C) increase the quantity sold of both the foreign and competing domestic good. 
D) reduce the quantity sold of both the foreign and competing domestic good. 
A) reduce the price of a competing domestic good. 
B) increase the price of a competing domestic good. 
C) increase the quantity sold of both the foreign and competing domestic good. 
D) reduce the quantity sold of both the foreign and competing domestic good.

Question 4

Which of the following is NOT a true statement regarding free trade?

Accepted Answer

A) Free trade promotes specialization and efficient production. 
B) Free trade generally reduces the domestic prices of imports. 
C) Free trade may stimulate economic growth through export sales. 
D) Every individual in a country gains short-term benefits from free trade. 
A) Free trade promotes specialization and efficient production. 
B) Free trade generally reduces the domestic prices of imports. 
C) Free trade may stimulate economic growth through export sales. 
D) Every individual in a country gains short-term benefits from free trade.

Question 5

Why is it impossible to make everyone better off in the long run by imposing import restrictions?

Accepted Answer

In the long run,any import restriction i

Question 6

Specialization allows for

Accepted Answer

A) more consumption for all trading partners. 
B) more consumption for the trading partner with the comparative advantage. 
C) more consumption for the trading partner with the absolute advantage. 
D) equal consumption among trading partners. 
A) more consumption for all trading partners. 
B) more consumption for the trading partner with the comparative advantage. 
C) more consumption for the trading partner with the absolute advantage. 
D) equal consumption among trading partners.

Question 7

Maximum Feasible Hourly Production Rates for either
 Computers or Bicycles Using All Available Resources
$$\begin{array}{l}
\begin{array} {lll} 
\hline Product & United States & Mexico \
\hline Computers & 8 & 2 \
Bicydes & 6 & 4 \
\hline
\end{array}
\end{array}$$
-According to the above table,if these two countries trade,

Accepted Answer

A) Mexico should specialize in computers and the United States in bicycles. 
B) the United States should specialize in both computers and bicycles. 
C) the United States should specialize in computers and Mexico should specialize in bicycles. 
D) we cannot tell which country should specialize in which good without knowing the amount of labor utilized in each country. 
A) Mexico should specialize in computers and the United States in bicycles. 
B) the United States should specialize in both computers and bicycles. 
C) the United States should specialize in computers and Mexico should specialize in bicycles. 
D) we cannot tell which country should specialize in which good without knowing the amount of labor utilized in each country.

Question 8

During the Great Depression,many industrial countries tried protecting domestic jobs by raising tariffs.Economic theory would suggest that the result would be

Accepted Answer

A) success for only the countries that raised tariffs first. 
B) success for firms that had a comparative advantage in manufactured goods rather than agricultural goods. 
C) reduced exports and volume of trade for everyone. 
D) increased incomes in the countries that pursued this policy. 
A) success for only the countries that raised tariffs first. 
B) success for firms that had a comparative advantage in manufactured goods rather than agricultural goods. 
C) reduced exports and volume of trade for everyone. 
D) increased incomes in the countries that pursued this policy.

Question 9

If a good sells for $10 domestically and the same good sells for $7 abroad,then this firm is engaging in

Accepted Answer

A) marginal cost selling. 
B) price discrimination. 
C) price differentiation. 
D) dumping. 
A) marginal cost selling. 
B) price discrimination. 
C) price differentiation. 
D) dumping.

Question 10

The argument that a tariff has to be imposed in order to protect any industry just getting started until it gets large enough to be competitive internationally is the

Accepted Answer

A) start-up industry argument. 
B) infant industry argument. 
C) baby industry argument. 
D) fledgling industry argument. 
A) start-up industry argument. 
B) infant industry argument. 
C) baby industry argument. 
D) fledgling industry argument.

Question 11

Maximum Feasible Hourly Production Rates (in Tons) of Either
 Knives or Forks Using All Available Resources
$$\begin{array}{l}
\begin{array} {lll }

Product & Country Alpha & Country Beta \
\hline Knives & 9 & 3 \
Forks & 6 & 12
\end{array}
\end{array}$$
-Use the above table.Assuming constant opportunity costs,the opportunity cost of producing knives in country Alpha is ________,and the opportunity cost of producing knives in country Beta is ________.

Accepted Answer

A) 2 forks; 0.33 knife 
B) 0.5 knife; 3 forks 
C) 1.5 forks; 0.25 fork 
D) 0.67 fork; 4 forks 
A) 2 forks; 0.33 knife 
B) 0.5 knife; 3 forks 
C) 1.5 forks; 0.25 fork 
D) 0.67 fork; 4 forks

Question 12

According to the Swiss Institute for Management Development,the top country in terms of productive efficiency is

Accepted Answer

A) Germany. 
B) Japan. 
C) Switzerland. 
D) the United States. 
A) Germany. 
B) Japan. 
C) Switzerland. 
D) the United States.

Question 13

Groups of nations that grants members trade privileges are called

Accepted Answer

A) local trade protectionists. 
B) trade settlements. 
C) regional trade blocs. 
D) allies. 
A) local trade protectionists. 
B) trade settlements. 
C) regional trade blocs. 
D) allies.

Question 14

Comparative advantage is the ability,compared with another producer,

Accepted Answer

A) to produce more of a product with the same resources. 
B) to use fewer inputs to produce the same amount of a product. 
C) to produce a higher-quality product with fewer resources. 
D) to produce an additional unit of a product at lower opportunity cost. 
A) to produce more of a product with the same resources. 
B) to use fewer inputs to produce the same amount of a product. 
C) to produce a higher-quality product with fewer resources. 
D) to produce an additional unit of a product at lower opportunity cost.

Question 15

The idea that tariffs should be imposed to protect new and developing industries is referred to as

Accepted Answer

A) the start-up argument. 
B) the infant industry argument. 
C) the incubator business theory. 
D) the new markets theory. 
A) the start-up argument. 
B) the infant industry argument. 
C) the incubator business theory. 
D) the new markets theory.

Question 16

Discuss the relationship between U.S.competitiveness relative to other countries and standards of living in the United States.

Accepted Answer

There is very little relationship betwee

Question 17

$$\begin{array}{l}
\text { Maximum Feasible Hourly Production Rate }\
\begin{array} { l l c } 
\hline& \text { Chen } & \text { Holly } \
\hline \text { Units of Good X } & 50 & 40 \
\text { Units of Good Y } & 25 & 100\\hline
\end{array}
\end{array}$$
-According to the above table,which assumes that opportunity costs of producing goods X and Y are constant,which of the following statements is TRUE?

Accepted Answer

A) Chen will be willing to produce only good X and trade units of that good to Holly as long as he receives more than 0.5 units of good Y from her in exchange. 
B) Holly will be willing to produce only good X and trade units of that good to Chen as long as she receives less than 2.5 units of good Y in exchange. 
C) Chen will be willing to produce only good Y and trade units of that good to Holly as long has he receives less than 2 units of good X from her in exchange. 
D) Holly will be willing to produce only good Y and trade units of that good to Chen as long as she receives less than 0.4 unit of good X in exchange. 
A) Chen will be willing to produce only good X and trade units of that good to Holly as long as he receives more than 0.5 units of good Y from her in exchange. 
B) Holly will be willing to produce only good X and trade units of that good to Chen as long as she receives less than 2.5 units of good Y in exchange. 
C) Chen will be willing to produce only good Y and trade units of that good to Holly as long has he receives less than 2 units of good X from her in exchange. 
D) Holly will be willing to produce only good Y and trade units of that good to Chen as long as she receives less than 0.4 unit of good X in exchange.

Question 18

The infant-industry argument is often criticized because

Accepted Answer

A) it is difficult to determine which industry merits protection. 
B) it reduces government revenues in the short term. 
C) it reduces the employment rate. 
D) it reduces labor productivity in the short term. 
A) it is difficult to determine which industry merits protection. 
B) it reduces government revenues in the short term. 
C) it reduces the employment rate. 
D) it reduces labor productivity in the short term.

Question 19

The World Trade Organization

Accepted Answer

A) was set up to increase tariffs among nations. 
B) was set up to negotiate exchange rates between countries. 
C) was set up to decrease tariffs among nations. 
D) handles trade disputes among its member nations. 
A) was set up to increase tariffs among nations. 
B) was set up to negotiate exchange rates between countries. 
C) was set up to decrease tariffs among nations. 
D) handles trade disputes among its member nations.

Question 20

The argument that with initial protection an industry will eventually become competitive is called the

Accepted Answer

A) national security argument. 
B) strategic bargaining argument. 
C) the trade adjustment assistance argument. 
D) infant industry argument. 
A) national security argument. 
B) strategic bargaining argument. 
C) the trade adjustment assistance argument. 
D) infant industry argument.

The contention that tariffs should be imposed to when a foreign government provides financial assistance its producers is

An import quota will make the supply curve for the imported good

A tariff placed on a foreign good will

Which of the following is NOT a true statement regarding free trade?

Why is it impossible to make everyone better off in the long run by imposing import restrictions?

Specialization allows for

Maximum Feasible Hourly Production Rates for either Computers or Bicycles Using All Available Resources Product UnitedStates Mexico Computers 8 2 Bicydes 6 4 -According to the above table,if these two countries trade,

During the Great Depression,many industrial countries tried protecting domestic jobs by raising tariffs.Economic theory would suggest that the result would be

If a good sells for $10 domestically and the same good sells for $7 abroad,then this firm is engaging in

The argument that a tariff has to be imposed in order to protect any industry just getting started until it gets large enough to be competitive internationally is the

According to the Swiss Institute for Management Development,the top country in terms of productive efficiency is

Groups of nations that grants members trade privileges are called

Comparative advantage is the ability,compared with another producer,

The idea that tariffs should be imposed to protect new and developing industries is referred to as

Discuss the relationship between U.S.competitiveness relative to other countries and standards of living in the United States.

Maximum Feasible Hourly Production Rate Chen Holly Units of Good X 50 40 Units of Good Y 25 100 -According to the above table,which assumes that opportunity costs of producing goods X and Y are constant,which of the following statements is TRUE?

The infant-industry argument is often criticized because

The World Trade Organization

The argument that with initial protection an industry will eventually become competitive is called the

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

The contention that tariffs should be imposed to when a foreign government provides financial assistance its producers is

An import quota will make the supply curve for the imported good

A tariff placed on a foreign good will

Which of the following is NOT a true statement regarding free trade?

Why is it impossible to make everyone better off in the long run by imposing import restrictions?

Specialization allows for

Maximum Feasible Hourly Production Rates for either Computers or Bicycles Using All Available Resources Product UnitedStates Mexico Computers 8 2 Bicydes 6 4 -According to the above table,if these two countries trade,

During the Great Depression,many industrial countries tried protecting domestic jobs by raising tariffs.Economic theory would suggest that the result would be

If a good sells for $10 domestically and the same good sells for $7 abroad,then this firm is engaging in

The argument that a tariff has to be imposed in order to protect any industry just getting started until it gets large enough to be competitive internationally is the

According to the Swiss Institute for Management Development,the top country in terms of productive efficiency is

Groups of nations that grants members trade privileges are called

Comparative advantage is the ability,compared with another producer,

The idea that tariffs should be imposed to protect new and developing industries is referred to as

Discuss the relationship between U.S.competitiveness relative to other countries and standards of living in the United States.

Maximum Feasible Hourly Production Rate Chen Holly Units of Good X 50 40 Units of Good Y 25 100 -According to the above table,which assumes that opportunity costs of producing goods X and Y are constant,which of the following statements is TRUE?

The infant-industry argument is often criticized because

The World Trade Organization

The argument that with initial protection an industry will eventually become competitive is called the

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