Question 1

Which of the following statements is false?

Accepted Answer

A)   Studies show that developing nations that have relied on import restrictions to protect domestic industries have had higher growth rates than similar nations pursuing more openEconomic policies.
B)   The U.S. Constitution forbids individual states from levying tariffs.
C)   The high tariffs of the Smoot-Hawley Act of 1930 and the retaliation they caused worsened the Great Depression.
D)   The European Union has enhanced prosperity in Western Europe.E) B) and D)
F) A) and B)

Question 2

Country X \quad\quad { Country ~X } Country X 
 PriceQddQSd$5.002004004.002503503.003003002.003502501.00400200\begin{array} { | c | c | c | } \hline Price & Q _ { d d } & Q _ { S d } \\hline \$ 5.00 & 200 & 400 \\hline 4.00 & 250 & 350 \\hline 3.00 & 300 & 300 \\hline 2.00 & 350 & 250 \\hline 1.00 & 400 & 200 \\hline\end{array}Price$5.004.003.002.001.00​Qdd​200250300350400​QSd​400350300250200​​ 
The accompanying table gives data for Country  XXX . Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically  (Qdd) \left( Q _ { d d } ight) (Qdd​)  , and Column 3 is the quantity supplied domestically  (Qsd\left( Q _ { s d } ight.(Qsd​  ) . If the world price is  $5.00\$ 5.00$5.00 , there will be

Accepted Answer

A)   a domestic surplus of 100 units that will be exported.
B)   a domestic shortage of 100 units that will be imported.
C)   a domestic surplus of 200 units that will be exported.
D)   neither a domestic surplus nor a shortage. E) A) and D)
F) None of the above

Question 3

(Consider This)  Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that

Accepted Answer

A)   there is no reason for them to trade services.
B)   Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more eﬃcient at accounting services.
C)   Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more eﬃcient at painting.
D)   Madison has the comparative advantage in both services.E) B) and D)
F) A) and B)

Question 4

Economists prefer free trade to tariffs and prefer tariffs to import quotas.

Accepted Answer

A) True 
 B)False

Question 5

Which country is the United States' largest trading partner in terms of volume of trade?

Accepted Answer

A)   Mexico
B)   Japan
C)   China
D)   CanadaE) None of the above
F) A) and D)

Question 6

Domestic Market For Steel, Alpha { 	ext { Domestic Market For Steel, Alpha } } Domestic Market For Steel, Alpha  
 QSPQd60$51040420303302024010150 Domestic Market For Steel, Beta QSPQd80$52070430603405025040160\begin{array}{l}\begin{array} { | c | c | c | } \hline Q _ { S } & P & Q _ { d } \\hline 60 & \$ 5 & 10 \\hline 40 & 4 & 20 \\hline 30 & 3 & 30 \\hline 20 & 2 & 40 \\hline 10 & 1 & 50 \\hline\end{array}\\\{ 	ext { Domestic Market For Steel, Beta } } \\begin{array} { | c | c | c | } \hline Q _ { S } & P & Q _ { d } \\hline 80 & \$ 5 & 20 \\hline 70 & 4 & 30 \\hline 60 & 3 & 40 \\hline 50 & 2 & 50 \\hline 40 & 1 & 60 \\hline\end{array}\end{array}QS​6040302010​P$54321​Qd​1020304050​​ Domestic Market For Steel, Beta QS​8070605040​P$54321​Qd​2030405060​​​  The accompanying tables show data for the hypothetical nations of Alpha and Beta.  QSQ _ { S }QS​  is domestic
Quantity supplied, and
 QdQ _ { d }Qd​  is domestic quantity demanded. The domestic equilibrium prices of steel
In Alpha and Beta are

Accepted Answer

A)   $5 and $4, respectively.
B)   $2 and $4, respectively.
C)   $3 and $2, respectively.
D)   $1 and $2, respectively. E) A) and C)
F) B) and C)

Question 7

The Trade Adjustment Assistance Act of 2002 focused mainly on assisting

Accepted Answer

A)   U.S. ﬁrms to establish export markets around the world.
B)   other nations to become familiar with, and adjust to, U.S. products.
C)   workers displaced by imports or plant relocations abroad.
D)   businesses who wish to globalize and compete in the world market.E) A) and B)
F) None of the above

Question 8

An excise tax on an imported good that is not produced domestically is called a

Accepted Answer

A)   protective tariff.
B)   import quota.
C)   revenue tariff.
D)   voluntary export restriction.E) A) and B)
F) A) and C)

Question 9

An example of a nontariff barrier would be

Accepted Answer

A)   a minimum limit on the quantity of imports.
B)   excessive licensing requirements.
C)   a tax on an imported product.
D)   voluntary export restraints.E) C) and D)
F) B) and C)

Question 10

Refer to the diagram, which pertains to two nations and a speciﬁc product. The equilibrium world price occurs at

Accepted Answer

A)   F.
B)   I.
C)   G.
D)   J.E) All of the above
F) B) and D)

Question 11

In the accompanying diagrams, solid lines are production possibilities curves, and the dashed lines are trading possibilities curves. The data suggest that

Accepted Answer

A)   West Lothian should specialize in, and export, beer.
B)   both countries will be better off if they do not engage in specialization and trade involving these two products.
C)   West Lothian should specialize in, and export, pizza.
D)   East Lothian should specialize in, and export, beer.E) B) and C)
F) All of the above

Question 12

Which of the following is a likely result of imposing tariffs to increase domestic employment?

Accepted Answer

A)   a decrease in consumer prices
B)   a decrease in the tariff rates of foreign nations
C)   an increase in the number of jobs
D)   an increase in the possibility of retaliatory tariffsE) All of the above
F) C) and D)

Question 13

In a two-nation, two-good world, if both nations have identical production possibilities curves with constant costs, then one nation would have

Accepted Answer

A)   no comparative advantage over the other nation.
B)   a comparative advantage in one good and a comparative disadvantage in the other good.
C)   no absolute advantage over the other nation.
D)   an absolute advantage in one good and an absolute disadvantage in the other good.E) B) and C)
F) A) and C)

Question 14

The principal concept behind comparative advantage is that a nation should

Accepted Answer

A)   maximize its volume of trade with other nations.
B)   use tariffs and quotas to protect the production of vital products for the nation.
C)   concentrate production on those products for which it has the lowest domestic opportunity cost.
D)   strive to be self-suﬃcient in the production of essential goods and services.E) B) and D)
F) None of the above

Question 15

Quantity Demanded  Domestically  Price  Quantity Supplied  Domestically 1,400$102,2001,60092,0001,80081,8002,00071,6002,20061,4002,40051,200\begin{array} { | c | c | c | } \hline \begin{array} { c } 	ext { Quantity Demanded } \	ext { Domestically }\end{array} & 	ext { Price } & \begin{array} { c } 	ext { Quantity Supplied } \	ext { Domestically }\end{array} \\hline 1,400 & \$ 10 & 2,200 \\hline 1,600 & 9 & 2,000 \\hline 1,800 & 8 & 1,800 \\hline 2,000 & 7 & 1,600 \\hline 2,200 & 6 & 1,400 \\hline 2,400 & 5 & 1,200 \\hline\end{array} Quantity Demanded  Domestically ​1,4001,6001,8002,0002,2002,400​ Price $1098765​ Quantity Supplied  Domestically ​2,2002,0001,8001,6001,4001,200​​  Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit imported is imposed, then the quantity of output that
Would be supplied domestically would be

Accepted Answer

A)   1,400 units, and the quantity of output that would be imported would be 800 units.
B)   1,600 units, and the quantity of output that would be imported would be 800 units.
C)   1,600 units, and the quantity of output that would be imported would be 400 units.
D)   1,400 units, and the quantity of output that would be imported would be 400 units. E) B) and D)
F) All of the above

Question 16

Which of the following is an example of a land-intensive commodity?

Accepted Answer

A)   chemicals
B)   autos
C)   watches
D)   woolE) A) and B)
F) A) and C)

Question 17

The equilibrium world price of a product equates the quantities of exports supplied and imports
demanded.

Accepted Answer

A) True 
 B)False

Question 18

A protective tariff will

Accepted Answer

A)   increase the sales of foreign exporters.
B)   increase the price and sales of domestic producers.
C)   increase the welfare of domestic consumers.
D)   create an eﬃciency gain in the domestic economy.E) B) and C)
F) A) and D)

Question 19

The following are commonly used arguments for protection against imports, except

Accepted Answer

A)   self-suﬃciency and diversiﬁcation-for-stability.
B)   protection against dumping.
C)   infant industry protection.
D)   price and proﬁt maintenance.E) A) and B)
F) B) and C)

Question 20

Which of the following product groups is a leading export of the United States?

Accepted Answer

A)   home appliances
B)   metals
C)   airplanes
D)   toysE) A) and B)
F) A) and C)

Exam 20: International Trade

Which of the following is an example of a land-intensive commodity?

Correct Answer
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An excise tax on an imported good that is not produced domestically is called a

Correct Answer
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Refer to the diagram, which pertains to two nations and a speciﬁc product. The equilibrium world price occurs at

Correct Answer
verified

The equilibrium world price of a product equates the quantities of exports supplied and imports demanded.

Correct Answer
verified

Which country is the United States' largest trading partner in terms of volume of trade?

Correct Answer
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A protective tariff will

Correct Answer
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Economists prefer free trade to tariffs and prefer tariffs to import quotas.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Which of the following product groups is a leading export of the United States?

Correct Answer
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In a two-nation, two-good world, if both nations have identical production possibilities curves with constant costs, then one nation would have

Correct Answer
verified

In the accompanying diagrams, solid lines are production possibilities curves, and the dashed lines are trading possibilities curves. The data suggest that

Correct Answer
verified

An example of a nontariff barrier would be

Correct Answer
verified

The Trade Adjustment Assistance Act of 2002 focused mainly on assisting

Correct Answer
verified

The following are commonly used arguments for protection against imports, except

Correct Answer
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Which of the following is a likely result of imposing tariffs to increase domestic employment?

Correct Answer
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The principal concept behind comparative advantage is that a nation should

Correct Answer
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(Consider This) Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that

Correct Answer
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Which of the following statements is false?

Correct Answer
verified

Exam 20: International Trade

Which of the following is an example of a land-intensive commodity?

Correct AnswerverifiedShow Answer

An excise tax on an imported good that is not produced domestically is called a

Correct AnswerverifiedShow Answer

Refer to the diagram, which pertains to two nations and a speciﬁc product. The equilibrium world price occurs at

Correct AnswerverifiedShow Answer

The equilibrium world price of a product equates the quantities of exports supplied and imports demanded.

Correct AnswerverifiedShow Answer

Which country is the United States' largest trading partner in terms of volume of trade?

Correct AnswerverifiedShow Answer

A protective tariff will

Correct AnswerverifiedShow Answer

Economists prefer free trade to tariffs and prefer tariffs to import quotas.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following product groups is a leading export of the United States?

Correct AnswerverifiedShow Answer

In a two-nation, two-good world, if both nations have identical production possibilities curves with constant costs, then one nation would have

Correct AnswerverifiedShow Answer

In the accompanying diagrams, solid lines are production possibilities curves, and the dashed lines are trading possibilities curves. The data suggest that

Correct AnswerverifiedShow Answer

An example of a nontariff barrier would be

Correct AnswerverifiedShow Answer

The Trade Adjustment Assistance Act of 2002 focused mainly on assisting

Correct AnswerverifiedShow Answer

The following are commonly used arguments for protection against imports, except

Correct AnswerverifiedShow Answer

Which of the following is a likely result of imposing tariffs to increase domestic employment?

Correct AnswerverifiedShow Answer

The principal concept behind comparative advantage is that a nation should

Correct AnswerverifiedShow Answer

(Consider This) Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

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