Question 1

In contrast,policies and actions that reduce trade restrictions and promote free trade are often referred to as:

Accepted Answer

A)  trade liberalization.
B)  trade protectionism.
C)  free trade politicism.
D)  autarky.E) A) and C)
F) All of the above

Question 2

Every government's set of policies used to govern their economy:

Accepted Answer

A)  vary widely from one another,making international trade sometimes difficult.
B)  vary widely from one another,making international trade a simple process.
C)  are largely the same,making international trade a simple process.
D)  are similar in most respects,but different in a few areas,making international trade sometimes difficult.E) C) and D)
F) B) and D)

Question 3

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were open to free trade,how many units would be exported?

Accepted Answer

A)  35
B)  85
C)  120
D)  75E) B) and C)
F) B) and D)

Question 4

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good. 
According to the graph shown,if this economy opens itself to free trade,it will become a:

Accepted Answer

A)  net importer.
B)  net exporter.
C)  autarky.
D)  quota rent seeker.E) None of the above
F) A) and D)

Question 5

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were open to free trade,domestic consumers would consume how many units?

Accepted Answer

A)  45
B)  85
C)  120
D)  75E) C) and D)
F) A) and D)

Question 6

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this were depicting an autarky,the amount being sold domestically is:

Accepted Answer

A)  45.
B)  85.
C)  120.
D)  75.E) All of the above
F) None of the above

Question 7

When each country specializes in producing the good for which it has a comparative advantage:

Accepted Answer

A)  both countries can benefit.
B)  both countries always enjoy equal gains from trade.
C)  the country that is bigger will gain more surplus.
D)  All of these are true.E) A) and B)
F) A) and C)

Question 8

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were to open to trade,consumers would:

Accepted Answer

A)  enjoy a net gain to surplus of DEFG.
B)  suffer a net loss to surplus of DEFG.
C)  suffer a transfer of surplus to the producer of DEFG.
D)  experience deadweight loss of FG.E) A) and D)
F) All of the above

Question 9

Laws limiting trade are often referred to as:

Accepted Answer

A)  trade protection.
B)  trade liberalization.
C)  trade enhancement.
D)  international policy.E) A) and B)
F) A) and C)

Question 10

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were to become a free trade nation,this good would:

Accepted Answer

A)  be imported.
B)  be exported.
C)  no longer be produced domestically.
D)  not imported or exported,but only produced domestically.E) A) and D)
F) All of the above

Question 11

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were to open to trade,domestic producers would:

Accepted Answer

A)  transfer surplus in area DE to consumers.
B)  transfer surplus in area DE to foreign producers.
C)  lose surplus in area FG to deadweight loss.
D)  lose surplus in area FG to foreign producers.E) A) and D)
F) A) and C)

Question 12

An import quota is:

Accepted Answer

A)  a limit on the amount of a particular good that can be imported.
B)  a tax on the good or services that are imported.
C)  a limit on the amount of a particular good that can be exported.
D)  None of these is true.E) A) and B)
F) A) and C)

Question 13

Suppose a country,whose production and consumption of coffee is large relative to the world market,has just entered the global market.If the country is a net exporter of coffee,we would expect:

Accepted Answer

A)  an increase in both world price and quantity of coffee.
B)  an increase in world price and decrease in world quantity of coffee.
C)  a decrease in both world price and quantity of coffee.
D)  a decrease in world price,and increase in world quantity of coffee.E) B) and C)
F) A) and C)

Question 14

The great Franco-American cheese war of 2009 began with:

Accepted Answer

A)  beef.
B)  cheddar cheese import restrictions.
C)  swiss cheese quotas.
D)  camembert cheese tariffs.E) A) and D)
F) A) and C)

Question 15

The World Trade Organization (WTO) is an international organization designed to:

Accepted Answer

A)  monitor and enforce trade agreements,while also promoting free trade.
B)  monitor and enforce world banking policies,and lending between nations.
C)  provide a forum for all nations to have discussion on various international issues of concern.
D)  The WTO does all of these.E) A) and B)
F) A) and C)

Question 16

A country that would be a net-importer of wine if it moved from autarky to free trade would cause what reaction?

Accepted Answer

A)  Domestic wine producers would be opposed.
B)  Foreign wine producers would be opposed.
C)  Domestic wine consumers would be opposed.
D)  All of these are true.E) A) and D)
F) A) and C)

Question 17

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,if the economy was operating under autarky,and decides to open trade with a tariff,the impact on domestic demand is:

Accepted Answer

A)  they will decrease consumption from 1500 to 1150.
B)  they will increase consumption from 815 to 1500.
C)  they will increase consumption from 815 to 1150.
D)  the will decrease consumption from 1500 to 815.E) A) and B)
F) A) and C)

Question 18

International trade affects:

Accepted Answer

A)  prices in different countries.
B)  workers in different countries.
C)  consumers in different countries.
D)  All of these are true.E) A) and D)
F) B) and D)

Question 19

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were to open to trade,domestic prices would:

Accepted Answer

A)  remain $14 for domestically produced goods,and be $10 for those units imported.
B)  drop to $10 for all units.
C)  remain $14,with more units sold overall.
D)  None of these is true.E) B) and C)
F) B) and D)

Question 20

For a country to be a price taker in the global market for some good:

Accepted Answer

A)  the quantity it produces and consumes must be very small relative to the total amount of that good bought and sold worldwide.
B)  the quantity it produces and consumes must be very large relative to the total amount of that good bought and sold worldwide.
C)  there must be many sellers all supplying a very significant amount to the market.
D)  there must be many buyers all buying a large amount from the market.E) C) and D)
F) All of the above

Exam 17: International Trade

Suppose a country,whose production and consumption of coffee is large relative to the world market,has just entered the global market.If the country is a net exporter of coffee,we would expect:

Correct AnswerverifiedShow Answer

Every government's set of policies used to govern their economy:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,domestic prices would:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to become a free trade nation,this good would:

Correct AnswerverifiedShow Answer

The great Franco-American cheese war of 2009 began with:

Correct AnswerverifiedShow Answer

In contrast,policies and actions that reduce trade restrictions and promote free trade are often referred to as:

Correct AnswerverifiedShow Answer

An import quota is:

Correct AnswerverifiedShow Answer

When each country specializes in producing the good for which it has a comparative advantage:

Correct AnswerverifiedShow Answer

A country that would be a net-importer of wine if it moved from autarky to free trade would cause what reaction?

Correct AnswerverifiedShow Answer

Laws limiting trade are often referred to as:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this were depicting an autarky,the amount being sold domestically is:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good. According to the graph shown,if this economy opens itself to free trade,it will become a:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,domestic producers would:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were open to free trade,domestic consumers would consume how many units?

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,consumers would:

Correct AnswerverifiedShow Answer

For a country to be a price taker in the global market for some good:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy was operating under autarky,and decides to open trade with a tariff,the impact on domestic demand is:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were open to free trade,how many units would be exported?

Correct AnswerverifiedShow Answer

The World Trade Organization (WTO) is an international organization designed to:

Correct AnswerverifiedShow Answer

International trade affects:

Correct AnswerverifiedShow Answer

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