Question 1

Dumping is:

Accepted Answer

A)  selling of a good in a foreign market at a price above its domestic price.
B)  selling of a good in a foreign market at a price equal to its domestic price.
C)  a form of price discrimination.
D)  a form of protective tariff.E) All of the above
F) A) and D)

Question 2

The Doha Development Agenda is:

Accepted Answer

A)  the most recent round of trade negotiations held by the European Union.
B)  the most recent round of trade negotiations held by the NAFTA countries.
C)  the most recent round of trade negotiations held by the WTO.
D)  the most recent round of trade negotiations held by the Euro zone countries.E) A) and B)
F) A) and D)

Question 3

Refer to the diagram below in which line AB is Canadian production possibility curve and AC is its trading possibilities curve.The international exchange ratio between beef and cheese (terms of trade) :

Accepted Answer

A)  is the absolute value of slope of line AB.
B)  is the absolute value of slope of line AC.
C)  could lie anywhere between the absolute value of the slopes of lines AB and AC.
D)  cannot be determined on the basis of this information.E) B) and C)
F) A) and B)

Question 4

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.If Alpha had produced 20X and 30Y and Beta had produced 30X and 20Y before specialization and trade, then we can say that the gains from specialization and trade are 10X and 10Y.

Accepted Answer

A) True 
 B)False

Question 5

Which combination of policies would entail the greatest stimulus to domestic employment and output in the short run?

Accepted Answer

A)  raising trade barriers on imports and subsidizing exports
B)  raising trade barriers on imports and imposing special taxes on exports
C)  lowering trade barriers on imports and imposing special taxes on exports
D)  lowering trade barriers on imports and subsidizing exportsE) A) and B)
F) A) and C)

Question 6

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Accepted Answer

A)  Germany, Great Britain, and Denmark.
B)  Germany, Denmark, and Sweden.
C)  Great Britain, Denmark, and Sweden.
D)  France, Germany, and Sweden.E) B) and D)
F) All of the above

Question 7

The provisions of the Uruguay Round of GATT were phased in through:

Accepted Answer

A)  2005.
B)  1999.
C)  1994.
D)  2018.E) A) and B)
F) A) and C)

Question 8

The principle of comparative advantage is that total output will be greatest when each good is produced by that nation which has the lowest domestic opportunity cost.

Accepted Answer

A) True 
 B)False

Question 9

Which is responsible for the major decrease in trade barriers since World War II?

Accepted Answer

A)  the North American Free Trade Agreement
B)  the General Agreement on Tariffs and Trade
C)  the granting of most-favoured nation status
D)  the World Trade OrganizationE) C) and D)
F) A) and B)

Question 10

In comparing a tariff and an import quota we find that:

Accepted Answer

A)  the tariff and quota both generate the same amount of revenue for the federal government.
B)  the tariff generates revenue for the federal government but the quota does not.
C)  the quota generates revenue for the federal government but the tariff does not.
D)  neither the tariff nor the quota generates revenue for the federal government.E) None of the above
F) All of the above

Question 11

The following is the Production possibilities data for two countries, Alpha and Beta, which have populations of equal size.  The above data show that:

Accepted Answer

A)  Beta has a comparative advantage in producing chips.
B)  Alpha has a comparative advantage in catching fish.
C)  Alpha is subject to constant costs and Beta is subject to increasing costs.
D)  Beta is more efficient than Alpha.E) None of the above
F) A) and B)

Question 12

Which statement is true?

Accepted Answer

A)  Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost.
B)  Comparative advantage means that total world output will decline when each good is produced by the nation with the lowest domestic opportunity cost.
C)  Specialization is complete among nations when opportunity costs rise as any given nation produces more of a particular product.
D)  Specialization is less than complete among nations when opportunity costs rise as any given nation produces more of a particular product.E) C) and D)
F) All of the above

Question 13

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size.  Refer to the above data.Beta:

Accepted Answer

A)  should specialize in catching fish and trade with Alpha for chips.
B)  should specialize in producing chips and trade with Alpha for fish.
C)  will not realize gains from specialization and trade.
D)  will export both fish and chips to Alpha.E) All of the above
F) A) and D)

Question 14

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is: A) the same as that of a tariff of PcPt. B) the same as that of a tariff of PtPa. C) the same as that of a tariff of PcPa. D) to raise price by more and reduce consumption less than a tariff of PcPt." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is:

Accepted Answer

A)  the same as that of a tariff of PcPt.
B)  the same as that of a tariff of PtPa.
C)  the same as that of a tariff of PcPa.
D)  to raise price by more and reduce consumption less than a tariff of PcPt.E) A) and D)
F) B) and D)

Question 15

An excise tax that is applied to imported products which are not produced domestically is a(n) :

Accepted Answer

A)  protective tariff.
B)  revenue tariff.
C)  import quota.
D)  nontariff barrier.E) B) and C)
F) All of the above

Question 16

Studies show that:

Accepted Answer

A)  it is impossible to estimate the benefits of trade barriers.
B)  costs and benefits of trade barriers are about equal.
C)  benefits of trade barriers exceed their costs in less developed nations.
D)  costs of trade barriers exceed their benefits, creating an efficiency loss for society.E) B) and D)
F) B) and C)

Question 17

When the distribution of resources and technology changes among nations:

Accepted Answer

A)  it costs more to produce all products.
B)  the relative efficiency of producing products changes.
C)  it costs less to produce all products.
D)  each nation will specialize in producing one product.E) B) and C)
F) A) and D)

Question 18

Other things equal, a tariff is:

Accepted Answer

A)  superior to an import quota for Canadians because a tariff increases the profits of foreign producers.
B)  inferior to an import quota for Canadians because a tariff increases the profits of domestic producers.
C)  superior to an import quota for Canadians because a tariff generates revenue for the federal government.
D)  inferior to an import quota for Canadians because a tariff generates revenue for the federal government.E) None of the above
F) A) and B)

Question 19

Which of the following was the most important good traded by Canada in 2016?largest, using Table 17.1 for principal exports/imports of good in 2016?

Accepted Answer

A)  Automotive products
B)  Energy products
C)  Metals and non-metallic minerals
D)  Forestry productsE) C) and D)
F) B) and C)

Question 20

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.Alpha should specialize in Y and Beta in X.

Accepted Answer

A) True 
 B)False

Exam 17: Part B: International Trade

Correct Answer
verified

Which is responsible for the major decrease in trade barriers since World War II?

Correct Answer
verified

Refer to the diagram below in which line AB is Canadian production possibility curve and AC is its trading possibilities curve.The international exchange ratio between beef and cheese (terms of trade) :

Correct Answer
verified

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.Alpha should specialize in Y and Beta in X.

Correct Answer
verified

The Doha Development Agenda is:

Correct Answer
verified

In comparing a tariff and an import quota we find that:

Correct Answer
verified

Studies show that:

Correct Answer
verified

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Correct Answer
verified

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Refer to the above data.Beta:

Correct Answer
verified

When the distribution of resources and technology changes among nations:

Correct Answer
verified

Other things equal, a tariff is:

Correct Answer
verified

Which combination of policies would entail the greatest stimulus to domestic employment and output in the short run?

Correct Answer
verified

An excise tax that is applied to imported products which are not produced domestically is a(n) :

Correct Answer
verified

The principle of comparative advantage is that total output will be greatest when each good is produced by that nation which has the lowest domestic opportunity cost.

Correct Answer
verified

Which of the following was the most important good traded by Canada in 2016?largest, using Table 17.1 for principal exports/imports of good in 2016?

Correct Answer
verified

The provisions of the Uruguay Round of GATT were phased in through:

Correct Answer
verified

The following is the Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. The above data show that:

Correct Answer
verified

Dumping is:

Correct Answer
verified

Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and Pc is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is:

Correct Answer
verified

Which statement is true?

Correct Answer
verified

Exam 17: Part B: International Trade

Correct AnswerverifiedShow Answer

Which is responsible for the major decrease in trade barriers since World War II?

Correct AnswerverifiedShow Answer

Refer to the diagram below in which line AB is Canadian production possibility curve and AC is its trading possibilities curve.The international exchange ratio between beef and cheese (terms of trade) :

Correct AnswerverifiedShow Answer

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.Alpha should specialize in Y and Beta in X.

Correct AnswerverifiedShow Answer

The Doha Development Agenda is:

Correct AnswerverifiedShow Answer

In comparing a tariff and an import quota we find that:

Correct AnswerverifiedShow Answer

Studies show that:

Correct AnswerverifiedShow Answer

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Correct AnswerverifiedShow Answer

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Refer to the above data.Beta:

Correct AnswerverifiedShow Answer

When the distribution of resources and technology changes among nations:

Correct AnswerverifiedShow Answer

Other things equal, a tariff is:

Correct AnswerverifiedShow Answer

Which combination of policies would entail the greatest stimulus to domestic employment and output in the short run?

Correct AnswerverifiedShow Answer

An excise tax that is applied to imported products which are not produced domestically is a(n) :

Correct AnswerverifiedShow Answer

The principle of comparative advantage is that total output will be greatest when each good is produced by that nation which has the lowest domestic opportunity cost.

Correct AnswerverifiedShow Answer

Which of the following was the most important good traded by Canada in 2016?largest, using Table 17.1 for principal exports/imports of good in 2016?

Correct AnswerverifiedShow Answer

The provisions of the Uruguay Round of GATT were phased in through:

Correct AnswerverifiedShow Answer

The following is the Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. The above data show that:

Correct AnswerverifiedShow Answer

Dumping is:

Correct AnswerverifiedShow Answer

Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is:

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

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Correct Answer
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Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and Pc is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is:

Correct Answer
verified

Correct Answer
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