Question 1

The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically produced product that is now

Accepted Answer

A)  lower in price because import competition has risen.
B)  higher in price because import competition has risen.
C)  higher in price because import competition has declined.
D)  lower in price because import competition has declined.E) All of the above
F) B) and C)

Question 2

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

Accepted Answer

A)  clothing
B)  wool
C)  sunflower seeds
D)  chemicalsE) B) and C)
F) C) and D)

Question 3

In effect, tariffs on imports are

Accepted Answer

A)  special taxes on domestic producers.
B)  subsidies to domestic consumers.
C)  subsidies to foreign producers.
D)  subsidies for domestic producers.E) C) and D)
F) None of the above

Question 4

Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

Accepted Answer

A)  have a domestic shortage of wheat.
B)  export wheat.
C)  import wheat.
D)  neither export nor import wheat.E) B) and D)
F) All of the above

Question 5

d and Dd are the domestic supply and demand for a product. The world price of the product is $6. What would be the difference in the total revenue received by foreign producers after a quota of 20 units is imposed compared with the total revenue received by foreign producers when a $4 per unit tariff is imposed? A) $0 revenue difference B) $80 more revenue with a quota than with a tariff C) $200 more revenue with a quota than with a tariff D) $120 more revenue with a tariff than with a quota" class="answers-bank-image d-inline" rel="preload" > Refer to the accompanying graph, where Sd and Dd are the domestic supply and demand for a product. The world price of the product is $6. What would be the difference in the total revenue received by foreign producers after a quota of 20 units is imposed compared with the total revenue received by foreign producers when a $4 per unit tariff is imposed?

Accepted Answer

A)  $0 revenue difference
B)  $80 more revenue with a quota than with a tariff
C)  $200 more revenue with a quota than with a tariff
D)  $120 more revenue with a tariff than with a quotaE) A) and B)
F) A) and C)

Question 6

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With a Pc Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be A) xz and x. B) xv and xz. C) x and xz. D) wy and w." class="answers-bank-image d-inline" rel="preload" > Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With a Pc Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be

Accepted Answer

A)  xz and x.
B)  xv and xz.
C)  x and xz.
D)  wy and w.E) None of the above
F) B) and D)

Question 7

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Accepted Answer

A)  consumer tastes and preferences.
B)  resource availability and technological capabilities.
C)  the nations' incomes and income distribution.
D)  unemployment and inflation rates.E) None of the above
F) C) and D)

Question 8

The number of countries belonging to the World Trade Organization (WTO) , as of 2018, is about

Accepted Answer

A)  164.
B)  125.
C)  80.
D)  202.E) All of the above
F) A) and B)

Question 9

What insights about international trade came from Adam Smith and David Ricardo?

Accepted Answer

In 1776, Adam Smith used the concept of ...

Question 10

d is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1, A) Beta wants to import more than Alpha. B) Alpha wants to export more than Beta. C) both nations want to export steel. D) both nations want to import steel." class="answers-bank-image d-inline" rel="preload" > The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Qd is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1,

Accepted Answer

A)  Beta wants to import more than Alpha.
B)  Alpha wants to export more than Beta.
C)  both nations want to export steel.
D)  both nations want to import steel.E) A) and B)
F) None of the above

Question 11

Other things equal, a tariff is

Accepted Answer

A)  superior to an import quota for Americans because a tariff increases the profits of foreign producers.
B)  inferior to an import quota for Americans because a tariff increases the profits of domestic producers.
C)  superior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury.
D)  inferior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury.E) B) and C)
F) A) and B)

Question 12

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size.  Suppose that before specialization and trade, Alpha chose production alternative C and Beta chose production alternative B. After specialization and trade, the gains will be

Accepted Answer

A)  20 tons of fish.
B)  20 tons of chips.
C)  20 tons of fish and 20 tons of chips.
D)  240 tons of fish and 20 tons of chips.E) A) and B)
F) B) and C)

Question 13

d) , and Column 3 is the quantity supplied domestically (Qₛd) . If Country X opens itself up to international trade and the world-market price of the product is $3, then Country X will A) neither export nor import the product. B) export some units of the product. C) import some units of the product. D) not produce the product." class="answers-bank-image d-inline" rel="preload" > The accompanying table gives data for Country X. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically (Qd) , and Column 3 is the quantity supplied domestically (Qₛd) . If Country X opens itself up to international trade and the world-market price of the product is $3, then Country X will

Accepted Answer

A)  neither export nor import the product.
B)  export some units of the product.
C)  import some units of the product.
D)  not produce the product.E) B) and C)
F) A) and D)

Question 14

Refer to the accompanying production possibilities tables. Data are in millions of units. Suppose that each nation specialized in producing the product for which it has a comparative advantage and the terms of trade were set at 3 units of chemicals for 1 unit of autos. In this case, Germany could obtain and consume a maximum combination of 8 million units of autos and

Accepted Answer

A)  12 million units of chemicals.
B)  24 million units of chemicals.
C)  36 million units of chemicals.
D)  48 million units of chemicals.E) C) and D)
F) A) and D)

Question 15

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) B) and C)
F) C) and D)

Question 16

Refer to the graph, which shows the domestic demand and supply curves for a specific product in a hypothetical nation called Econland. If the world price for this product is $2.00, then Econland will

Accepted Answer

A)  export 200 units.
B)  export 400 units.
C)  import 200 units.
D)  import 400 units.E) A) and B)
F) A) and C)

Question 17

Employing all its available resources, Nation Alpha can produce either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of clothing.

Accepted Answer

A)  Nation Alpha has a comparative advantage in producing clothing.
B)  Nation Beta has a comparative advantage in producing chemicals.
C)  Nation Alpha has a comparative advantage in producing chemicals.
D)  Nation Beta is the high-cost producer of clothing.E) A) and C)
F) A) and D)

Question 18

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Accepted Answer

A) True 
 B)False

Question 19

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case,

Accepted Answer

A)  Korea has a comparative advantage in the production of wheat.
B)  the United States has a comparative advantage in the production of televisions.
C)  mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States.
D)  mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States.E) A) and B)
F) C) and D)

Question 20

In the United States, exports of goods and services accounted for about what percentage of GDP (total output) in 2018?

Accepted Answer

A)  6 percent
B)  12 percent
C)  24 percent
D)  42 percentE) A) and B)
F) B) and C)

Exam 26: International Trade

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct Answer
verified

What insights about international trade came from Adam Smith and David Ricardo?

Correct Answer
verified
In 1776, Adam Smith used the concept of ...
View Answer

In effect, tariffs on imports are

Correct Answer
verified

Refer to the graph, which shows the domestic demand and supply curves for a specific product in a hypothetical nation called Econland. If the world price for this product is $2.00, then Econland will

Correct Answer
verified

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Suppose that before specialization and trade, Alpha chose production alternative C and Beta chose production alternative B. After specialization and trade, the gains will be

Correct Answer
verified

Employing all its available resources, Nation Alpha can produce either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of clothing.

Correct Answer
verified

Other things equal, a tariff is

Correct Answer
verified

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case,

Correct Answer
verified

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Q_d is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1,

Correct Answer
verified

Correct Answer
verified

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Correct Answer
verified

Correct Answer
verified

Refer to the diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product. With a P_c Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be

Correct Answer
verified

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

Correct Answer
verified

The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically produced product that is now

Correct Answer
verified

Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

Correct Answer
verified

The number of countries belonging to the World Trade Organization (WTO) , as of 2018, is about

Correct Answer
verified

An example of a nontariff barrier would be

Correct Answer
verified

In the United States, exports of goods and services accounted for about what percentage of GDP (total output) in 2018?

Correct Answer
verified

Correct Answer
verified

Exam 26: International Trade

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct AnswerverifiedShow Answer

What insights about international trade came from Adam Smith and David Ricardo?

Correct AnswerverifiedIn 1776, Adam Smith used the concept of ...View AnswerShow Answer

In effect, tariffs on imports are

Correct AnswerverifiedShow Answer

Refer to the graph, which shows the domestic demand and supply curves for a specific product in a hypothetical nation called Econland. If the world price for this product is $2.00, then Econland will

Correct AnswerverifiedShow Answer

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Suppose that before specialization and trade, Alpha chose production alternative C and Beta chose production alternative B. After specialization and trade, the gains will be

Correct AnswerverifiedShow Answer

Employing all its available resources, Nation Alpha can produce either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of clothing.

Correct AnswerverifiedShow Answer

Other things equal, a tariff is

Correct AnswerverifiedShow Answer

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case,

Correct AnswerverifiedShow Answer

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Qd is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With a Pc Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically produced product that is now

Correct AnswerverifiedShow Answer

Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

Correct AnswerverifiedShow Answer

The number of countries belonging to the World Trade Organization (WTO) , as of 2018, is about

Correct AnswerverifiedShow Answer

An example of a nontariff barrier would be

Correct AnswerverifiedShow Answer

In the United States, exports of goods and services accounted for about what percentage of GDP (total output) in 2018?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
In 1776, Adam Smith used the concept of ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Q_d is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because, at $1,

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Refer to the diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product. With a P_c Pₜ per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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