Question 1

NAFTA refers to a 1994 agreement that eliminated most tariffs among which countries?

Accepted Answer

A) Canada,the United Kingdom,and Mexico 
B) the United States,the United Kingdom,and Mexico 
C) the United States,Canada,and Mexico 
D) the United States,Mexico,and Cuba 
A) Canada,the United Kingdom,and Mexico 
B) the United States,the United Kingdom,and Mexico 
C) the United States,Canada,and Mexico 
D) the United States,Mexico,and Cuba

Question 2

Output per hour Production and Production
of work Consumption without Trade with Trade
 $\begin{array}{|c|c|c|c|c|c|c|c|c|}
\hline & \text { Clocks } & \text { Hats } & & \text { Clocks } & \text { Hats } && \text { Clocks } & \text { Hats } \
\hline \text { Denmark } & 6 & 3 & & 900 & 150 & &1,200 & 0 \
\hline \text { Belize } & 1 & 2 & & 150 & 100& & 0 & 400 \
\hline
\end{array}$
 Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-11 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 9-11.Which country has an absolute advantage in producing clocks?

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country 
A) Denmark 
B) Belize 
C) both countries 
D) neither country

Question 3

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.For the U.S.steel industry,a "Buy American" provision would create gains for all of the following except

Accepted Answer

A) U.S.steel companies. 
B) U.S.taxpayers. 
C) U.S.steel workers. 
D) All of the above would gain from the provision. 
A) U.S.steel companies. 
B) U.S.taxpayers. 
C) U.S.steel workers. 
D) All of the above would gain from the provision.

Question 4

One of the main sources of comparative advantage is natural resources.

Accepted Answer

A) True 
 B)False

Question 5

Protectionism is usually justified on the basis of one of four arguments.What are those four arguments?

Accepted Answer

1.saving jobs
2.protecting hig

Question 6

Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff.
-Refer to Figure 9-5.The tariff causes domestic consumption of coffee

Accepted Answer

A) to fall by 27 million pounds. 
B) to fall by 7 million pounds. 
C) to rise by 6 million pounds. 
D) to rise by 20 million pounds. 
A) to fall by 27 million pounds. 
B) to fall by 7 million pounds. 
C) to rise by 6 million pounds. 
D) to rise by 20 million pounds.

Question 7

In 1995 ________,which was established in 1948,was replaced by ________.

Accepted Answer

A) the GATT;the WTO 
B) the WTO;NAFTA 
C) the Smoot-Hawley Tariff;the GATT 
D) NAFTA;the Smoot-Hawley Tariff 
A) the GATT;the WTO 
B) the WTO;NAFTA 
C) the Smoot-Hawley Tariff;the GATT 
D) NAFTA;the Smoot-Hawley Tariff

Question 8

$$\begin{array} { | l | l | l | } 
\hline & \text { Saddles } & \text { Spurs (pairs) } \
\hline \text { Mateo } & 75 & 225 \
\hline \text { Celeste } & 100 & 225 \
\hline
\end{array}$$ Mateo and Celeste produce custom saddles and spurs.Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
-Refer to Table 9-6.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Celeste has a comparative advantage in making saddles. 
B) Mateo has an absolute advantage in making spurs. 
C) Mateo has a comparative advantage in making saddles. 
D) Mateo has a comparative advantage in making saddles and making spurs. 
A) Celeste has a comparative advantage in making saddles. 
B) Mateo has an absolute advantage in making spurs. 
C) Mateo has a comparative advantage in making saddles. 
D) Mateo has a comparative advantage in making saddles and making spurs.

Question 9

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 10

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.The "Buy American" provision would ________ consumer surplus and ________ producer surplus for industries that produced protected products in the United States.

Accepted Answer

A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease 
A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease

Question 11

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.With the tariff in place,the United States

Accepted Answer

A) imports 16 million pounds of rice. 
B) imports 9 million pounds of rice. 
C) imports 15 million pounds of rice. 
D) exports 31 million pounds of rice. 
A) imports 16 million pounds of rice. 
B) imports 9 million pounds of rice. 
C) imports 15 million pounds of rice. 
D) exports 31 million pounds of rice.

Question 12

________ refers to reductions in a firm's costs that result from an increase in the size of an industry.

Accepted Answer

A) Internal economies 
B) External economies 
C) Autarkial dominance 
D) Streamlining 
A) Internal economies 
B) External economies 
C) Autarkial dominance 
D) Streamlining

Question 13

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Accepted Answer

A) True 
 B)False

Question 14

Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff.
-Refer to Figure 9-5.Without the tariff in place,the United States consumes

Accepted Answer

A) 12 million pounds of coffee. 
B) 26 million pounds of coffee. 
C) 33 million pounds of coffee. 
D) 45 million pounds of coffee. 
A) 12 million pounds of coffee. 
B) 26 million pounds of coffee. 
C) 33 million pounds of coffee. 
D) 45 million pounds of coffee.

Question 15

The first discussion of comparative advantage appears in a book written by

Accepted Answer

A) Adam Smith. 
B) Paul Samuelson. 
C) David Portugal. 
D) David Ricardo. 
A) Adam Smith. 
B) Paul Samuelson. 
C) David Portugal. 
D) David Ricardo.

Question 16

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.If there was no quota,how many pounds of peanuts would be imported?

Accepted Answer

A) 16 million 
B) 28 million 
C) 30 million 
D) 40 million 
A) 16 million 
B) 28 million 
C) 30 million 
D) 40 million

Question 17

How does the U.S.federal government assist workers who have lost their jobs due to international trade?

Accepted Answer

The federal government uses the Trade Ad

Question 18

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 domestic producer surplus without a quota?

Accepted Answer

A) C 
B) C + B 
C) A + B + C 
D) A + B + C + D 
A) C 
B) C + B 
C) A + B + C 
D) A + B + C + D

Question 19

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.With the tariff in place,the United States produces

Accepted Answer

A) 9 million pounds of rice. 
B) 15 million pounds of rice. 
C) 31 million pounds of rice. 
D) 42 million pounds of rice. 
A) 9 million pounds of rice. 
B) 15 million pounds of rice. 
C) 31 million pounds of rice. 
D) 42 million pounds of rice.

Question 20

All of the following are sources of comparative advantage except

Accepted Answer

A) climate and natural resources. 
B) relative abundance of labor and capital. 
C) a strong foreign currency exchange rate. 
D) technology. 
A) climate and natural resources. 
B) relative abundance of labor and capital. 
C) a strong foreign currency exchange rate. 
D) technology.

Exam 9: Comparative Advantage and the Gains From International Trade

NAFTA refers to a 1994 agreement that eliminated most tariffs among which countries?

One of the main sources of comparative advantage is natural resources.

Protectionism is usually justified on the basis of one of four arguments.What are those four arguments?

Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff. -Refer to Figure 9-5.The tariff causes domestic consumption of coffee

In 1995 ________,which was established in 1948,was replaced by ________.

Saddles Spurs (pairs) Mateo 75 225 Celeste 100 225 Mateo and Celeste produce custom saddles and spurs.Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 9-6.Select the statement that accurately interprets the data in the table.

Free trade ________ living standards by ________ economic efficiency.

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.With the tariff in place,the United States

________ refers to reductions in a firm's costs that result from an increase in the size of an industry.

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff. -Refer to Figure 9-5.Without the tariff in place,the United States consumes

The first discussion of comparative advantage appears in a book written by

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.If there was no quota,how many pounds of peanuts would be imported?

How does the U.S.federal government assist workers who have lost their jobs due to international trade?

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 domestic producer surplus without a quota?

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.With the tariff in place,the United States produces

All of the following are sources of comparative advantage except

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

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

In 1995 ,which was established in 1948,was replaced by .

Free trade living standards by economic efficiency.