Question 1

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 2

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 3

Given two economic systems,A and B,if economy A has a absolute advantage in the production of widgets,then

Accepted Answer

A) fewer inputs are necessary to produce widgets in economy A than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of widgets than economy B. 
D) economy A would not benefit from the specialization of production. 
A) fewer inputs are necessary to produce widgets in economy A than in economy B. 
B) economy A must give up less of all other goods to produce widgets than economy B. 
C) economy A is less efficient in the production of widgets than economy B. 
D) economy A would not benefit from the specialization of production.

Question 4

-According to economic historians,one result of international trade is that it

Accepted Answer

A) aids in the international transmission of ideas. 
B) reduces the world-wide output of goods. 
C) reduces the world-wide consumption of goods. 
D) causes persistent world-wide inflation. 
A) aids in the international transmission of ideas. 
B) reduces the world-wide output of goods. 
C) reduces the world-wide consumption of goods. 
D) causes persistent world-wide inflation.

Question 5

A group of nations that grants member special trade privileges is

Accepted Answer

A) World Trade Organization. 
B) European Union. 
C) General Agreement on Tariffs and Trade. 
D) North American Free Trade Agreement. 
A) World Trade Organization. 
B) European Union. 
C) General Agreement on Tariffs and Trade. 
D) North American Free Trade Agreement.

Question 6

Import restrictions due to the imposition of tariffs by the U.S.government

Accepted Answer

A) will ultimately cause inefficient resource allocation in the United States. 
B) will lead to lower incomes in the economy of U.S.trade partners. 
C) will lead to a decline in the quantity of the product consumed in the United States. 
D) all of the above are likely to occur 
A) will ultimately cause inefficient resource allocation in the United States. 
B) will lead to lower incomes in the economy of U.S.trade partners. 
C) will lead to a decline in the quantity of the product consumed in the United States. 
D) all of the above are likely to occur

Question 7

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 8

An official agreement with another country to restrict the quantity of its exports to the U.S.is

Accepted Answer

A) a regional trade bloc. 
B) the quota system. 
C) a voluntary import expansion. 
D) a voluntary restraint agreement. 
A) a regional trade bloc. 
B) the quota system. 
C) a voluntary import expansion. 
D) a voluntary restraint agreement.

Question 9

If the infant industry argument is used to protect an industry that has already matured,then

Accepted Answer

A) consumers lose because they will pay a price for a product that is above the world price. 
B) consumers lose because they will pay a price for a product,which is less than the world price. 
C) stockholders lose because the firm cannot compete with other firms. 
D) no one loses. 
A) consumers lose because they will pay a price for a product that is above the world price. 
B) consumers lose because they will pay a price for a product,which is less than the world price. 
C) stockholders lose because the firm cannot compete with other firms. 
D) no one loses.

Question 10

The ability to produce an item at a lower opportunity cost compared with other producers is known as

Accepted Answer

A) competitive dominance. 
B) productive dominance. 
C) comparative advantage. 
D) absolute advantage. 
A) competitive dominance. 
B) productive dominance. 
C) comparative advantage. 
D) absolute advantage.

Question 11

Some nations avoid the effects of trade deflection in a trade bloc by enforcing

Accepted Answer

A) trade deflection. 
B) trade diversion. 
C) quotas. 
D) rules of origin. 
A) trade deflection. 
B) trade diversion. 
C) quotas. 
D) rules of origin.

Question 12

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 13

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 14

What must a government know for the infant industry argument to be a valid reason for imposing tariffs?

Accepted Answer

The government must be able to determine

Question 15

Which of the following is counted as a benefit from international trade?

Accepted Answer

A) New production processes developed in one nation are transmitted to others. 
B) Intellectual property such as music and computer applications is introduced throughout the world. 
C) New goods have been introduced to other parts of the world. 
D) All of the above are benefits from international trade. 
A) New production processes developed in one nation are transmitted to others. 
B) Intellectual property such as music and computer applications is introduced throughout the world. 
C) New goods have been introduced to other parts of the world. 
D) All of the above are benefits from international trade.

Question 16

A legal limit on the amount of sugar imported into the United States is

Accepted Answer

A) a tariff. 
B) a subsidy. 
C) a quota. 
D) a voluntary import restriction. 
A) a tariff. 
B) a subsidy. 
C) a quota. 
D) a voluntary import restriction.

Question 17

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 18

Discuss the relationship between world trade and world Gross Domestic Product (GDP)since the early 1950s.

Accepted Answer

Both world trade and world GDP have grow

Question 19

Comparative advantage is

Accepted Answer

A) the ability to produce more output from given inputs than another producer can. 
B) the ability to produce a good at a lower opportunity cost than other producers. 
C) the ability to produce more output of all goods than anyone else can. 
D) the ability to produce all goods at lower costs than anyone else can. 
A) the ability to produce more output from given inputs than another producer can. 
B) the ability to produce a good at a lower opportunity cost than other producers. 
C) the ability to produce more output of all goods than anyone else can. 
D) the ability to produce all goods at lower costs than anyone else can.

Question 20

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.

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

The infant-industry argument is often criticized because

Given two economic systems,A and B,if economy A has a absolute advantage in the production of widgets,then

-According to economic historians,one result of international trade is that it

A group of nations that grants member special trade privileges is

Import restrictions due to the imposition of tariffs by the U.S.government

Specialization allows for

An official agreement with another country to restrict the quantity of its exports to the U.S.is

If the infant industry argument is used to protect an industry that has already matured,then

The ability to produce an item at a lower opportunity cost compared with other producers is known as

Some nations avoid the effects of trade deflection in a trade bloc by enforcing

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

The infant industry argument says that

What must a government know for the infant industry argument to be a valid reason for imposing tariffs?

Which of the following is counted as a benefit from international trade?

A legal limit on the amount of sugar imported into the United States is

An international agreement from 1947 designed to lower tariffs was

Discuss the relationship between world trade and world Gross Domestic Product (GDP)since the early 1950s.

Comparative advantage is

Dumping is

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

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Exchange Rates and the Balance of Payments

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Exam 32: Comparative Advantage and the Open Economy

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

The infant-industry argument is often criticized because

Given two economic systems,A and B,if economy A has a absolute advantage in the production of widgets,then

-According to economic historians,one result of international trade is that it

A group of nations that grants member special trade privileges is

Import restrictions due to the imposition of tariffs by the U.S.government

Specialization allows for

An official agreement with another country to restrict the quantity of its exports to the U.S.is

If the infant industry argument is used to protect an industry that has already matured,then

The ability to produce an item at a lower opportunity cost compared with other producers is known as

Some nations avoid the effects of trade deflection in a trade bloc by enforcing

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

The infant industry argument says that

What must a government know for the infant industry argument to be a valid reason for imposing tariffs?

Which of the following is counted as a benefit from international trade?

A legal limit on the amount of sugar imported into the United States is

An international agreement from 1947 designed to lower tariffs was

Discuss the relationship between world trade and world Gross Domestic Product (GDP)since the early 1950s.

Comparative advantage is

Dumping is

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

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Exchange Rates and the Balance of Payments

Filters