Question 1

(Last Word)  Frederic Bastiat's "Petition of the Candlemakers" most directly refutes which of the following arguments for protectionism?

Accepted Answer

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

Question 2

Differences in production efficiencies among nations in producing a particular good result from

Accepted Answer

A)   different endowments of fertile soil.
B)   different amounts of skilled labor.
C)   different levels of technological knowledge.
D)   all of these.E) A) and C)
F) B) and C)

Question 3

If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that

Accepted Answer

A)   Nation A has the absolute advantage over Nation B in producing cloth.
B)   Nation B has the absolute advantage over Nation A in producing cloth.
C)   Nation A has the comparative advantage over Nation B in producing cloth.
D)   Nation B has the comparative advantage over Nation A in producing cloth.E) A) and C)
F) A) and B)

Question 4

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Accepted Answer

A)   consumer tastes and preferences.
B)   resource availability and technological capabilities.
C)   the nations' incomes and income distribution.
D)   unemployment and inflation rates.E) C) and D)
F) B) and C)

Question 5

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) A) and B)
F) C) and D)

Question 6

Which of the following is an example of a labor-intensive commodity?

Accepted Answer

A)   digital cameras
B)   beer
C)   aspirin tablets
D)   gasolineE) None of the above
F) All of the above

Question 7

A nation's export supply curve for a specific product

Accepted Answer

A)   is upsloping.
B)   shows the amount of the product it will export at prices below its domestic price.
C)   lies below its import demand curve for the product.
D)   depends on domestic supply of the product, but not on domestic demand.E) B) and C)
F) A) and B)

Question 8

Which of the following products is a leading import of the United States?

Accepted Answer

A)   grains
B)   aircraft
C)   automobiles
D)   generating equipmentE) C) and D)
F) A) and C)

Question 9

In which of the following countries did exports account for the biggest percentage of GDP in 2014?

Accepted Answer

A)   Japan
B)   United States
C)   Netherlands
D)   GermanyE) A) and D)
F) A) and B)

Question 10

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. Therefore, Alpha should specialize in Y and Beta in X.

Accepted Answer

A) True 
 B)False

Question 11

An excise tax that is applied to an imported product that is not at all produced domestically is called a(n)

Accepted Answer

A)   protective tariff.
B)   revenue tariff.
C)   import quota.
D)   nontariff barrier.E) B) and D)
F) None of the above

Question 12

An example of a nontariff barrier would be

Accepted Answer

A)   a minimum limit on the quantity of imports.
B)   excessive licensing requirements.
C)   a tax on an imported product.
D)   voluntary export restraints.E) A) and B)
F) All of the above

Question 13

U.S. exports of goods and services (on a national income account basis)  are about

Accepted Answer

A)   20 percent of U.S. GDP.
B)   8 percent of U.S. GDP.
C)   28 percent of U.S. GDP.
D)   13 percent of U.S. GDP.E) All of the above
F) None of the above

Question 14

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.   Ouantity  Ouantity ( Supplied  Demanded  (Domestic)   Price  (Domestic)  12$52104473742111116\begin{array}{|c|c|c|}\hline\text { Ouantity }&&\text { Ouantity }\(\text { Supplied }&&\text { Demanded }\\hline \text { (Domestic)  } & \text { Price } & \text { (Domestic)  } \\hline 12 & \$ 5 & 2 \\hline 10 & 4 & 4 \\hline 7 & 3 & 7 \\hline 4 & 2 & 11 \\hline 1 & 1 & 16 \\hline\end{array} Ouantity ( Supplied  (Domestic)  1210741​ Price $54321​ Ouantity  Demanded  (Domestic)  2471116​​  With a $1-per-unit tariff, price and total quantity sold will be

Accepted Answer

A)   $3 and 7 units.
B)   $5 and 2 units.
C)   $1 and 16 units.
D)   $2 and 11 units. E) A) and B)
F) C) and D)

Question 15

The terms of trade reflect the

Accepted Answer

A)   rate at which gold exchanges internationally for any domestic currency.
B)   ratio at which nations will exchange two goods.
C)   fact that the gains from trade will be equally divided.
D)   cost conditions embodied in a single country's production possibilities curve.E) A) and D)
F) B) and C)

Question 16

In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce

Accepted Answer

A)   the product with fewer inputs than the other nation.
B)   the product at lower average cost than the other nation.
C)   the product at a lower domestic opportunity cost than the other nation.
D)   more of the product than the other nation.E) A) and D)
F) All of the above

Question 17

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 C)
F) A) and B)

Question 18

Which organization meets regularly to establish rules and settle disputes related to international trade?

Accepted Answer

A)   the United Nations Commission on Trade Law
B)   the United Nations Conference on Trade and Development
C)   the World Trade Organization
D)   the World Economic ForumE) All of the above
F) A) and B)

Question 19

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

Accepted Answer

A)   home appliances
B)   metals
C)   agricultural products
D)   computersE) A) and D)
F) A) and C)

Question 20

The benefits to trading nations based on comparative advantage accrue from

Accepted Answer

A)   specialization only.
B)   specialization and trading.
C)   trading only.
D)   protection of domestic industries.E) A) and B)
F) A) and C)

Exam 26: International Trade

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

Correct Answer
verified

An excise tax that is applied to an imported product that is not at all produced domestically is called a(n)

Correct Answer
verified

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

Correct Answer
verified

If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that

Correct Answer
verified

The terms of trade reflect the

Correct Answer
verified

In which of the following countries did exports account for the biggest percentage of GDP in 2014?

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. Therefore, Alpha should specialize in Y and Beta in X.

Correct Answer
verified

Which of the following products is a leading import of the United States?

Correct Answer
verified

U.S. exports of goods and services (on a national income account basis) are about

Correct Answer
verified

An example of a nontariff barrier would be

Correct Answer
verified

A nation's export supply curve for a specific product

Correct Answer
verified

The benefits to trading nations based on comparative advantage accrue from

Correct Answer
verified

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Correct Answer
verified

Which of the following is an example of a labor-intensive commodity?

Correct Answer
verified

Correct Answer
verified

Differences in production efficiencies among nations in producing a particular good result from

Correct Answer
verified

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

Correct Answer
verified

Which organization meets regularly to establish rules and settle disputes related to international trade?

Correct Answer
verified

(Last Word) Frederic Bastiat's "Petition of the Candlemakers" most directly refutes which of the following arguments for protectionism?

Correct Answer
verified

In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce

Correct Answer
verified

Exam 26: International Trade

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

Correct AnswerverifiedShow Answer

An excise tax that is applied to an imported product that is not at all produced domestically is called a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that

Correct AnswerverifiedShow Answer

The terms of trade reflect the

Correct AnswerverifiedShow Answer

In which of the following countries did exports account for the biggest percentage of GDP in 2014?

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. Therefore, Alpha should specialize in Y and Beta in X.

Correct AnswerverifiedShow Answer

Which of the following products is a leading import of the United States?

Correct AnswerverifiedShow Answer

U.S. exports of goods and services (on a national income account basis) are about

Correct AnswerverifiedShow Answer

An example of a nontariff barrier would be

Correct AnswerverifiedShow Answer

A nation's export supply curve for a specific product

Correct AnswerverifiedShow Answer

The benefits to trading nations based on comparative advantage accrue from

Correct AnswerverifiedShow Answer

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Correct AnswerverifiedShow Answer

Which of the following is an example of a labor-intensive commodity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Differences in production efficiencies among nations in producing a particular good result from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which organization meets regularly to establish rules and settle disputes related to international trade?

Correct AnswerverifiedShow Answer

(Last Word) Frederic Bastiat's "Petition of the Candlemakers" most directly refutes which of the following arguments for protectionism?

Correct AnswerverifiedShow Answer

In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce

Correct AnswerverifiedShow Answer

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