Question 1

As of 2018, how many European nations belonged to the European Union (EU) ?

Accepted Answer

A)  All of the nations of Europe automatically belong to the EU.
B)  17
C)  28
D)  10E) A) and D)
F) B) and C)

Question 2

Tariffs

Accepted Answer

A)  may be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs) .
B)  are also called import quotas.
C)  are excise taxes on goods exported abroad.
D)  are per-unit subsidies designed to promote exports.E) B) and D)
F) C) and D)

Question 3

Production of goods and services require different mixes of resources. Discuss the three different production resource intensities and give examples of each.

Accepted Answer

Labor-intensive goods are products requi...

Question 4

Which of the following countries had the smallest share of exports as a percentage of GDP in 2018?

Accepted Answer

A)  Canada
B)  Germany
C)  United Kingdom
D)  United StatesE) C) and D)
F) A) and D)

Question 5

Which of the following arguments contends that certain industries need to be protected in the interest of national security?

Accepted Answer

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

Question 6

A tariff is a

Accepted Answer

A)  tax.
B)  price ceiling.
C)  quantity limit.
D)  subsidy.E) A) and B)
F) B) and D)

Question 7

As a percentage of GDP, U.S. exports are

Accepted Answer

A)  greater than U.S. imports.
B)  about 20 percent.
C)  considerably lower than in several other industrially advanced nations.
D)  higher than in Canada but lower than in Germany.E) B) and C)
F) A) and D)

Question 8

Refer to the diagram pertaining to two nations and a specific product. Lines FA and GB are

Accepted Answer

A)  domestic supply curves for two countries.
B)  domestic demand curves for two countries.
C)  import demand curves for two countries.
D)  export supply curves for two countries.E) B) and D)
F) A) and B)

Question 9

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) A) and B)
F) None of the above

Question 10

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Accepted Answer

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F) None of the above

Question 11

In 2018, the United States became a net exporter of oil.

Accepted Answer

A) True 
 B)False

Question 12

"Offshoring" refers to

Accepted Answer

A)  importing goods, services, and resources.
B)  stashing money in offshore accounts for the purpose of avoiding taxes.
C)  shifting work overseas that was previously done domestically.
D)  exporting key resources.E) A) and B)
F) A) and C)

Question 13

If a nation has a comparative advantage in the production of X, this means the nation

Accepted Answer

A)  cannot benefit by producing and trading this product.
B)  must give up less of other goods than other nations in producing a unit of X.
C)  has a production possibilities curve identical to those of other nations.
D)  is not subject to increasing opportunity costs.E) B) and C)
F) A) and B)

Question 14

In a world with two products, wheat (W) and coffee (C) , nation Alpha produces wheat and nation Beta produces coffee. Nation Alpha prefers an exchange rate of 1W = 2C, and nation Beta prefers an exchange rate of 1W = 1C. The exchange rate preferred by nation

Accepted Answer

A)  Alpha will prevail if world demand for coffee is great relative to its supply.
B)  Alpha will prevail if world demand for wheat is weak relative to its supply.
C)  Beta will prevail if world demand for coffee is great relative to its supply.
D)  Beta will prevail if world demand for wheat is great relative to its supply.E) B) and C)
F) None of the above

Question 15

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size.  Assume the production possibilities in Beta double at alternatives A through E, while remaining as shown in the table for Alpha. As a result, Beta should

Accepted Answer

A)  continue to specialize in producing chips.
B)  continue to specialize in fishing.
C)  no longer specialize and trade.
D)  specialize both in fishing and in producing chips and sell the surplus to Alpha.E) A) and B)
F) A) and C)

Question 16

The World Trade Organization was established as a successor to

Accepted Answer

A)  GATT.
B)  NAFTA.
C)  the EU.
D)  the Doha Development Agenda.E) B) and C)
F) A) and C)

Question 17

List and describe the four basic types of trade barriers.

Accepted Answer

The four basic types of trade barriers a...

Question 18

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia.  In Latalia the domestic real cost of 1 ton of pork

Accepted Answer

A)  is 3 tons of beans.
B)  diminishes with the level of pork production.
C)  is 5 tons of beans.
D)  is 1/5 of a ton of beans.E) A) and B)
F) C) and D)

Question 19

In a two-nation, two-good world, if country A has the comparative advantage in producing good X over country B, then country A

Accepted Answer

A)  should not trade with country B.
B)  could have the comparative advantage in producing the other good, Y, as well.
C)  must have the comparative disadvantage in producing the other good, Y.
D)  can produce good X with fewer resources than country B.E) None of the above
F) A) and B)

Question 20

Which of the following statements about the European Union (EU) is true?

Accepted Answer

A)  All members of the EU use a common currency (the euro) .
B)  The EU has abolished most trade barriers among participating countries and has common tariffs applied to non-EU goods.
C)  The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital.
D)  Trade within the EU is liberalized, but EU nations set most of their own policies with regard to trade with non-EU nations.E) A) and B)
F) A) and C)

Exam 26: International Trade

If a nation has a comparative advantage in the production of X, this means the nation

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"Offshoring" refers to

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Production of goods and services require different mixes of resources. Discuss the three different production resource intensities and give examples of each.

Correct AnswerverifiedLabor-intensive goods are products requi...View AnswerShow Answer

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia. In Latalia the domestic real cost of 1 ton of pork

Correct AnswerverifiedShow Answer

In a two-nation, two-good world, if country A has the comparative advantage in producing good X over country B, then country A

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As a percentage of GDP, U.S. exports are

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The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qₛis domestic quantity supplied, and Qd is domestic quantity demanded. Alpha's export supply is represented by

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The World Trade Organization was established as a successor to

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Refer to the diagram pertaining to two nations and a specific product. Lines FA and GB are

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Which of the following arguments contends that certain industries need to be protected in the interest of national security?

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In 2018, the United States became a net exporter of oil.

Correct AnswerverifiedShow Answer

Which of the following statements about the European Union (EU) is true?

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

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The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Assume the production possibilities in Beta double at alternatives A through E, while remaining as shown in the table for Alpha. As a result, Beta should

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List and describe the four basic types of trade barriers.

Correct AnswerverifiedThe four basic types of trade barriers a...View AnswerShow Answer

Tariffs

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A tariff is a

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In a world with two products, wheat (W) and coffee (C) , nation Alpha produces wheat and nation Beta produces coffee. Nation Alpha prefers an exchange rate of 1W = 2C, and nation Beta prefers an exchange rate of 1W = 1C. The exchange rate preferred by nation

Correct AnswerverifiedShow Answer

Which of the following countries had the smallest share of exports as a percentage of GDP in 2018?

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As of 2018, how many European nations belonged to the European Union (EU) ?

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Labor-intensive goods are products requi...
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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. Alpha's export supply is represented by

Correct Answer
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The four basic types of trade barriers a...
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