Question 1

The accompanying table shows labor-productivity figures in two countries facing constant costs. It can be deduced that

Accepted Answer

A)  country A has the absolute advantage in producing both meat and houses.
B)  country B has the absolute advantage in producing both meat and houses.
C)  country A has a comparative advantage in producing both meat and houses.
D)  country B has a comparative advantage in producing both meat and houses.E) A) and B)
F) All of the above

Question 2

From an economic perspective, studies of the costs of trade barriers show that they

Accepted Answer

A)  are outweighed by the reduction in foreign competition provided by the barriers.
B)  are much less than benefits for domestic producers and workers.
C)  are about equal to the benefits from trade barriers.
D)  far exceed their benefits for society.E) None of the above
F) B) and C)

Question 3

It is impossible for a nation to have a comparative advantage in producing everything.

Accepted Answer

A) True 
 B)False

Question 4

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product. If the economy is opened to free trade, the price and quantity sold of this product would be A) Pc and v. B) Pₐ and z. C) Pₜ and y. D) Pc and z." 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. If the economy is opened to free trade, the price and quantity sold of this product would be

Accepted Answer

A)  Pc and v.
B)  Pₐ and z.
C)  Pₜ and y.
D)  Pc and z.E) All of the above
F) A) and D)

Question 5

If countries A and B produce only either rubber bands or paper clips, their maximum outputs are shown in the accompanying production possibilities schedules. In country B the opportunity cost of 1 rubber band is

Accepted Answer

A)  4 paper clips.
B)  .25 paper clip.
C)  2 paper clips.
D)  40 paper clips.E) A) and B)
F) A) and C)

Question 6

Critics of the World Trade Organization (WTO) say that liberalized world trade does all of the following except

Accepted Answer

A)  produce environmental degradation.
B)  allow producers to circumvent labor protections such as workplace safety, child labor restrictions, and collective bargaining rights.
C)  help developing nations escape from poverty.
D)  promote the interests of multinational corporations.E) B) and D)
F) C) and D)

Question 7

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers, respectively, would be A) v and vz. B) w and wy. C) w and wz. D) vx and xz." 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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers, respectively, would be

Accepted Answer

A)  v and vz.
B)  w and wy.
C)  w and wz.
D)  vx and xz.E) None of the above
F) All 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) All of the above
F) B) and C)

Question 9

Offshoring benefits some firms by reducing their producing costs and maintaining their global competitiveness.

Accepted Answer

A) True 
 B)False

Question 10

In Germany, one worker can produce either one cuckoo clock or one beer mug. In Taiwan, one worker can produce either two cuckoo clocks or three beer mugs. Who has the comparative advantage in each good?

Accepted Answer

A)  Taiwan in both goods
B)  Taiwan in clocks and Germany in mugs
C)  Germany in clocks and Taiwan in mugs
D)  Germany in both goodsE) All of the above
F) A) and C)

Question 11

In 2018, U.S. exports of services ______ U.S. imports of services by about _____.

Accepted Answer

A)  exceeded; $20 B
B)  fell short of; $20 B
C)  exceeded; $270 B
D)  fell short of; $220 BE) All of the above
F) B) and C)

Question 12

The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that

Accepted Answer

A)  France has a comparative advantage in producing wine.
B)  Germany has a comparative advantage in producing wine.
C)  neither country has a comparative advantage in producing wine.
D)  Germany can produce machines at a lower opportunity cost than France.E) A) and B)
F) C) and D)

Question 13

The imposition of a tariff on a product is least likely to result in a(n)

Accepted Answer

A)  increase in efficiency in the domestic industry producing the product.
B)  increase in the price of the product.
C)  decrease in the quantity of imports.
D)  decrease in the real incomes of workers in other industries.E) A) and B)
F) A) and C)

Question 14

The slopes of the production possibilities curves for two nations reflect the

Accepted Answer

A)  relative prices of the resources in the two nations.
B)  amounts of imports and exports of the two nations.
C)  average income levels in the two nations.
D)  opportunity costs of production in the two nations.E) C) and D)
F) None of the above

Question 15

The World Trade Organization (WTO)is an international organization designed to provide short-term advances of foreign monies to those nations faced with trade deficits.

Accepted Answer

A) True 
 B)False

Question 16

If the world price of a product rises relative to the domestic price in a trading nation, then, for that product,

Accepted Answer

A)  exports and imports will increase.
B)  exports and imports will decrease.
C)  exports will increase and imports will decrease.
D)  imports will increase and exports will decrease.E) All of the above
F) B) and D)

Question 17

The law of increasing opportunity costs limits international specialization.

Accepted Answer

A) True 
 B)False

Question 18

Refer to the accompanying table for a certain product's market in Econland. If Econland was open to international trade and the world price was $6, then Econland would

Accepted Answer

A)  import800units.
B)  import2,200units.
C)  export800units.
D)  export1,400units.E) B) and C)
F) B) and D)

Question 19

Cite three important reasons why nations trade.

Accepted Answer

Trade is beneficial in that (1)the distr...

Question 20

Which is an example of a nontariff barrier (NTB) ?

Accepted Answer

A)  an export subsidy
B)  an excise tax on the physical volume of imported goods
C)  box-by-box inspection requirements for imported fruit
D)  an excise tax on the dollar value of imported goodsE) None of the above
F) C) and D)

Exam 26: International Trade

In Germany, one worker can produce either one cuckoo clock or one beer mug. In Taiwan, one worker can produce either two cuckoo clocks or three beer mugs. Who has the comparative advantage in each good?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Cite three important reasons why nations trade.

Correct AnswerverifiedTrade is beneficial in that (1)the distr...View AnswerShow Answer

The World Trade Organization (WTO)is an international organization designed to provide short-term advances of foreign monies to those nations faced with trade deficits.

Correct AnswerverifiedShow Answer

The accompanying table shows labor-productivity figures in two countries facing constant costs. It can be deduced that

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. If the economy is opened to free trade, the price and quantity sold of this product would be

Correct AnswerverifiedShow Answer

Critics of the World Trade Organization (WTO) say that liberalized world trade does all of the following except

Correct AnswerverifiedShow Answer

The law of increasing opportunity costs limits international specialization.

Correct AnswerverifiedShow Answer

If the world price of a product rises relative to the domestic price in a trading nation, then, for that product,

Correct AnswerverifiedShow Answer

The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that

Correct AnswerverifiedShow Answer

Refer to the accompanying table for a certain product's market in Econland. If Econland was open to international trade and the world price was $6, then Econland would

Correct AnswerverifiedShow Answer

If countries A and B produce only either rubber bands or paper clips, their maximum outputs are shown in the accompanying production possibilities schedules. In country B the opportunity cost of 1 rubber band is

Correct AnswerverifiedShow Answer

The imposition of a tariff on a product is least likely to result in a(n)

Correct AnswerverifiedShow Answer

Offshoring benefits some firms by reducing their producing costs and maintaining their global competitiveness.

Correct AnswerverifiedShow Answer

Which is an example of a nontariff barrier (NTB) ?

Correct AnswerverifiedShow Answer

It is impossible for a nation to have a comparative advantage in producing everything.

Correct AnswerverifiedShow Answer

From an economic perspective, studies of the costs of trade barriers show that they

Correct AnswerverifiedShow Answer

In 2018, U.S. exports of services ______ U.S. imports of services by about _____.

Correct AnswerverifiedShow Answer

The slopes of the production possibilities curves for two nations reflect the

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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers, respectively, would be

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Trade is beneficial in that (1)the distr...
View Answer

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. If the economy is opened to free trade, the price and quantity sold of this product would be

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In 2018, U.S. exports of services __ U.S. imports of services by about _.

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 free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers, respectively, would be

Correct Answer
verified