Question 1

Refer to the graphs. Terryville has a comparative advantage in producing

Accepted Answer

A)  product A.
B)  product B.
C)  both products A and B.
D)  neither product A nor B.E) A) and C)
F) B) and D)

Question 2

The ratio at which nations will exchange one product for another is known as the

Accepted Answer

A)  exchange rate.
B)  discount rate.
C)  terms of trade.
D)  balance of trade.E) C) and D)
F) B) and D)

Question 3

Refer to the accompanying production possibilities tables. Data are in millions of units. Assume that prior to specialization and trade, Germany and the United States both choose production possibility C. Now if each specializes according to its comparative advantage, the resulting gains from specialization and trade will be

Accepted Answer

A)  8 million units of autos.
B)  6 million units of autos.
C)  6 million units of autos and 8 million units of chemicals.
D)  8 million units of autos and 6 million units of chemicals.E) A) and D)
F) A) and B)

Question 4

Adam Smith recognized the benefits from trade based on ____, and David Ricardo recognized the benefits from trade based on ____.

Accepted Answer

A)  comparative advantage; resource endowments
B)  absolute advantage; comparative advantage
C)  absolute advantage; resource endowments
D)  comparative advantage; absolute advantageE) All of the above
F) A) and D)

Question 5

d) , and Column 3 is the quantity supplied domestically (Qₛd) . If Country X opens itself up to international trade, at what world price will it begin importing some units of the product? A) any price below $5.00 B) any price above $5.00 C) any price below $3.00 D) any price above $3.00" 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, at what world price will it begin importing some units of the product?

Accepted Answer

A)  any price below $5.00
B)  any price above $5.00
C)  any price below $3.00
D)  any price above $3.00E) A) and C)
F) All of the above

Question 6

Refer to the diagram, which pertains to two nations and a specific product. The equilibrium level of exports and imports occurs at

Accepted Answer

A)  H, where GB and FC intersect.
B)  J, where the vertical distance between A and B equals the vertical distance between C and D.
C)  world price level F.
D)  world price level G.E) A) and B)
F) A) and C)

Question 7

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) All of the above

Question 8

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 developing nations.
D)  costs of trade barriers exceed their benefits, creating an efficiency loss for society.E) A) and D)
F) A) and C)

Question 9

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

Accepted Answer

A)  1.5 beers for 1 pizza.
B)  1 beer for 2 pizzas.
C)  2 beers for 1 pizza.
D)  1 beer for 1.5 pizzas.E) A) and D)
F) A) and C)

Question 10

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-sufficient if necessary?

Accepted Answer

A)  the increased domestic employment argument
B)  the cheap foreign labor argument
C)  the diversification-for-stability argument
D)  the infant industry argumentE) A) and B)
F) A) and C)

Question 11

The increased-domestic-employment argument for tariff protection holds that

Accepted Answer

A)  domestic inflation is a desirable policy goal because it stimulates exports.
B)  domestic deflation is a desirable policy goal because it stimulates imports.
C)  an increase in tariffs will reduce net exports and stimulate domestic employment.
D)  an increase in tariffs will increase net exports and stimulate domestic employment.E) All of the above
F) None of the above

Question 12

In which of the following countries did exports account for the biggest percentage of GDP in 2018?

Accepted Answer

A)  Japan
B)  United States
C)  Netherlands
D)  GermanyE) All of the above
F) None of the above

Question 13

d) , and Column 3 is the quantity supplied domestically (Qₛd) . If the world price is $5.00, there will be 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." 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 the world price is $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 B)
F) A) and C)

Question 14

The hypothetical nations Wat and Xat have the production possibilities for rice and corn given in the accompanying tables. Which of the following statements about the two nations is correct based on the principle of comparative advantage?

Accepted Answer

A)  Xat should specialize in the production of corn.
B)  Wat should specialize in the production of rice.
C)  Xat has a comparative advantage in the production of rice.
D)  Xat has a comparative advantage in the production of corn.E) A) and C)
F) A) and B)

Question 15

Assuming labor forces of equal size, the production possibilities curves suggest that workers in West Mudville will have

Accepted Answer

A)  lower wages than workers in East Mudville before trade but equal wages after trade.
B)  higher wages than workers in East Mudville both before and after trade.
C)  lower wages than workers in East Mudville both before and after trade.
D)  higher wages than workers in East Mudville before trade but lower wages after trade.E) All of the above
F) A) and B)

Question 16

The basic difference in the economic effects of a tariff compared with a quota is that a

Accepted Answer

A)  quota reduces domestic consumption of the product, but a tariff does not.
B)  tariff allows imports to increase if demand increases, whereas a quota does not.
C)  tariff raises product prices, but a quota does not.
D)  quota raises product prices, but a tariff does not.E) None of the above
F) All of the above

Question 17

d is domestic quantity demanded. At a world price of $5, A) Alpha will want to import 50 units of steel. B) Beta will want to import 60 units of steel. C) Alpha will want to export 50 units of steel. D) neither country will want to export 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. At a world price of $5,

Accepted Answer

A)  Alpha will want to import 50 units of steel.
B)  Beta will want to import 60 units of steel.
C)  Alpha will want to export 50 units of steel.
D)  neither country will want to export steel.E) B) and D)
F) A) and B)

Question 18

The World Trade Organization is the successor to the

Accepted Answer

A)  General Agreement on Tariffs and Trade (GATT) .
B)  United Nations Commission on Trade Law (UNCTL) .
C)  World Customs Organization.
D)  United Nations Conference on Trade and Development (UNCTA
D)  .E) B) and C)
F) B) and D)

Question 19

The accompanying tables give production possibilities data for Gamma and Sigma. All data are in tons.Gamma's production possibilities  Sigma's production possibilities
 Assume that before specialization and trade, Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage, the gains from specialization and trade will be

Accepted Answer

A)  40 tons of pots.
B)  20 tons of tea and 20 tons of pots.
C)  20 tons of tea.
D)  40 tons of tea.E) A) and D)
F) A) and C)

Question 20

Tariffs create larger gains to domestic producers than losses to domestic consumers.

Accepted Answer

A) True 
 B)False

Exam 26: International Trade

Studies show that

Correct Answer
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Refer to the diagram, which pertains to two nations and a specific product. The equilibrium level of exports and imports occurs at

Correct Answer
verified

The basic difference in the economic effects of a tariff compared with a quota is that a

Correct Answer
verified

Assuming labor forces of equal size, the production possibilities curves suggest that workers in West Mudville will have

Correct Answer
verified

Refer to the graphs. Terryville has a comparative advantage in producing

Correct Answer
verified

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

Correct Answer
verified

Tariffs create larger gains to domestic producers than losses to domestic consumers.

Correct Answer
verified

Correct Answer
verified

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

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. At a world price of $5,

Correct Answer
verified

The hypothetical nations Wat and Xat have the production possibilities for rice and corn given in the accompanying tables. Which of the following statements about the two nations is correct based on the principle of comparative advantage?

Correct Answer
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The ratio at which nations will exchange one product for another is known as the

Correct Answer
verified

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 (Q_d) , and Column 3 is the quantity supplied domestically (Qₛ_d) . If the world price is $5.00, there will be

Correct Answer
verified

The increased-domestic-employment argument for tariff protection holds that

Correct Answer
verified

Correct Answer
verified

The World Trade Organization is the successor to the

Correct Answer
verified

Adam Smith recognized the benefits from trade based on , and David Ricardo recognized the benefits from trade based on .

Correct Answer
verified

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-sufficient if necessary?

Correct Answer
verified

In which of the following countries did exports account for the biggest percentage of GDP in 2018?

Correct Answer
verified

Exam 26: International Trade

Studies show that

Correct AnswerverifiedShow Answer

Refer to the diagram, which pertains to two nations and a specific product. The equilibrium level of exports and imports occurs at

Correct AnswerverifiedShow Answer

The basic difference in the economic effects of a tariff compared with a quota is that a

Correct AnswerverifiedShow Answer

Assuming labor forces of equal size, the production possibilities curves suggest that workers in West Mudville will have

Correct AnswerverifiedShow Answer

Refer to the graphs. Terryville has a comparative advantage in producing

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Tariffs create larger gains to domestic producers than losses to domestic consumers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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. At a world price of $5,

Correct AnswerverifiedShow Answer

The hypothetical nations Wat and Xat have the production possibilities for rice and corn given in the accompanying tables. Which of the following statements about the two nations is correct based on the principle of comparative advantage?

Correct AnswerverifiedShow Answer

The ratio at which nations will exchange one product for another is known as the

Correct AnswerverifiedShow Answer

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 the world price is $5.00, there will be

Correct AnswerverifiedShow Answer

The increased-domestic-employment argument for tariff protection holds that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The World Trade Organization is the successor to the

Correct AnswerverifiedShow Answer

Adam Smith recognized the benefits from trade based on ____, and David Ricardo recognized the benefits from trade based on ____.

Correct AnswerverifiedShow Answer

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-sufficient if necessary?

Correct AnswerverifiedShow Answer

In which of the following countries did exports account for the biggest percentage of GDP in 2018?

Correct AnswerverifiedShow Answer

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The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Q_d is domestic quantity demanded. At a world price of $5,

Correct Answer
verified

Correct Answer
verified

Correct Answer
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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 (Q_d) , and Column 3 is the quantity supplied domestically (Qₛ_d) . If the world price is $5.00, there will be

Correct Answer
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Correct Answer
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Correct Answer
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Adam Smith recognized the benefits from trade based on , and David Ricardo recognized the benefits from trade based on .

Correct Answer
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Correct Answer
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