Question 1

Answer the question using the accompanying cost ratios for two products, fish (F)  and chicken (C) , in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and that these are the only two nations in the world. Singsong: 1F = 2C Harmony: 1F = 4C
In Singsong the domestic real cost of each chicken

Accepted Answer

A)   is ½ fish.
B)   is 2 fish.
C)   increases with the level of fish caught.
D)   decreases with the level of fish caught.E) A) and B)
F) None of the above

Question 2

If demand for a product is increasing, an import tariff is less restrictive than an import quota.

Accepted Answer

A) True 
 B)False

Question 3

When tariffs on imported products are removed by a nation, it will result in

Accepted Answer

A)   higher prices and lower quantities consumed in that nation.
B)   higher prices and higher quantities consumed in that nation.
C)   lower prices and lower quantities consumed in that nation.
D)   lower prices and higher quantities consumed in that nation.E) B) and C)
F) C) and D)

Question 4

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 60 Y. Comparable figures for nation Beta are 60 X and 40 Y. Beta would prefer terms of trade at, or close to, 1X = 1½Y.

Accepted Answer

A) True 
 B)False

Question 5

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) B) and D)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Suppose the domestic price (no-international-trade price)  of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

Accepted Answer

A)   have a domestic shortage of wheat.
B)   export wheat.
C)   import wheat.
D)   neither export nor import wheat.E) B) and C)
F) A) and C)

Question 8

Dumping of goods abroad

Accepted Answer

A)   constitutes a general case for permanent tariffs.
B)   may be part of a firm's price discrimination strategy.
C)   may be part of a nation's strategy to rectify its trade deficit.
D)   drives up prices of the dumped goods.E) A) and B)
F) B) and D)

Question 9

Which of the following was not one of the principles on which the General Agreement on Tariffs and Trade (GATT)  was established?

Accepted Answer

A)   the elimination of import quotas
B)   equal, nondiscriminatory trade treatment for all member nations
C)   the formation of international trade contracts to alleviate global poverty
D)   the reduction of tariffs by multilateral negotiationsE) A) and B)
F) A) and C)

Question 10

Trade protection in most instances transfers wealth from consumers to domestic producers.

Accepted Answer

A) True 
 B)False

Question 11

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia.   \quad \quad \quad \quad \quad \quad Latalia’s production possibilities 	ext { Latalia&#x27;s production possibilities } Latalia’s production possibilities  
  A  B  C  D  E  Pork (Tons)  43210 Beans (Tons)  05101520\begin{array}{|c|c|c|c|c|c|}\hline & 	ext { A } & 	ext { B } & 	ext { C } & 	ext { D } & 	ext { E } \\hline 	ext { Pork (Tons)  } & 4 & 3 & 2 & 1 & 0 \\hline 	ext { Beans (Tons)  } & 0 & 5 & 10 & 15 & 20 \\hline\end{array} Pork (Tons)   Beans (Tons)  ​ A 40​ B 35​ C 210​ D 115​ E 020​​    \quad \quad \quad \quad \quad \quad \quad \quad Trombonia’s production 	ext { Trombonia&#x27;s production } Trombonia’s production  
  \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad possibilities 	ext { possibilities } possibilities  
  A  B  C  D  E  Pork (Tons)  86420 Beans (Tons)  06121824\begin{array}{c|c|c|c|c|c}\hline & 	ext { A } & 	ext { B } & 	ext { C } & 	ext { D } & 	ext { E } \\hline 	ext { Pork (Tons)  } & 8 & 6 & 4 & 2 & 0 \\hline 	ext { Beans (Tons)  } & 0 & 6 & 12 & 18 & 24 \\hline\end{array} Pork (Tons)   Beans (Tons)  ​ A 80​ B 66​ C 412​ D 218​ E 024​​  The given data indicate that production in

Accepted Answer

A)   both Latalia and Trombonia is subject to constant opportunity costs.
B)   Trombonia is subject to decreasing costs, but production in Latalia occurs under increasing opportunity costs.
C)   Latalia is subject to increasing costs, but production in Trombonia occurs under constant opportunity costs.
D)   both Latalia and Trombonia are subject to the law of increasing opportunity costs. E) B) and C)
F) A) and B)

Question 12

The World Trade Organization

Accepted Answer

A)   is also known as the International Monetary Fund (IMF) .
B)   is also known as NAFTA.
C)   was established to resolve disputes arising under world trade rules.
D)   enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.E) A) and B)
F) None of the above

Question 13

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that

Accepted Answer

A)   labor costs and product prices are not related.
B)   there is no discernible relationship between wage rates and labor productivity.
C)   wage rates and labor productivity are directly related.
D)   wage rates and labor productivity are inversely related.E) B) and C)
F) None of the above

Question 14

In 2015, the United States had its first-ever trade surplus with OPEC.

Accepted Answer

A) True 
 B)False

Question 15

A tariff is a

Accepted Answer

A)   tax.
B)   price ceiling.
C)   quantity limit.
D)   subsidy.E) A) and B)
F) None of the above

Question 16

A nation's import demand curve for a specific product

Accepted Answer

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

Question 17

Which of the following is a valid counterargument to the call for higher tariffs to save U.S. jobs?

Accepted Answer

A)   U.S. firms and workers must be protected from the cheaper labor in nations where wages are low.
B)   All nations cannot simultaneously succeed in restricting imports while maintaining exports.
C)   Reducing tariffs will benefit all consumers and domestic producers.
D)   The need to protect U.S. workers from unemployment is not a concern in international economics.E) A) and B)
F) A) and C)

Question 18

In 2015, 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; $220 B
D)   fell short of; $220 BE) B) and C)
F) A) and D)

Question 19

A high tariff on imported good X might reduce domestic employment in industry Y if

Accepted Answer

A)   X is an input used domestically in producing Y.
B)   X and Y are substitute goods.
C)   X is an inferior good.
D)   Y is an inferior good.E) None of the above
F) All of the above

Question 20

Some people accuse an offshoring firm of "exporting jobs". This activity called offshoring is really equivalent to

Accepted Answer

A)   exporting products.
B)   importing products.
C)   import tariffs.
D)   import quotas.E) A) and B)
F) A) and C)

Exam 26: International Trade

Which of the following is a valid counterargument to the call for higher tariffs to save U.S. jobs?

Correct Answer
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Correct Answer
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A high tariff on imported good X might reduce domestic employment in industry Y if

Correct Answer
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Dumping of goods abroad

Correct Answer
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Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

Correct Answer
verified

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

Correct Answer
verified

The World Trade Organization

Correct Answer
verified

When tariffs on imported products are removed by a nation, it will result in

Correct Answer
verified

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that

Correct Answer
verified

If demand for a product is increasing, an import tariff is less restrictive than an import quota.

Correct Answer
verified

A nation's import demand curve for a specific product

Correct Answer
verified

Correct Answer
verified

Some people accuse an offshoring firm of "exporting jobs". This activity called offshoring is really equivalent to

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 60 Y. Comparable figures for nation Beta are 60 X and 40 Y. Beta would prefer terms of trade at, or close to, 1X = 1½Y.

Correct Answer
verified

Trade protection in most instances transfers wealth from consumers to domestic producers.

Correct Answer
verified

In 2015, U.S. exports of services U.S. imports of services by about .

Correct Answer
verified

A tariff is a

Correct Answer
verified

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

Correct Answer
verified

In 2015, the United States had its first-ever trade surplus with OPEC.

Correct Answer
verified

Which of the following was not one of the principles on which the General Agreement on Tariffs and Trade (GATT) was established?

Correct Answer
verified

Exam 26: International Trade

Which of the following is a valid counterargument to the call for higher tariffs to save U.S. jobs?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A high tariff on imported good X might reduce domestic employment in industry Y if

Correct AnswerverifiedShow Answer

Dumping of goods abroad

Correct AnswerverifiedShow Answer

Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The World Trade Organization

Correct AnswerverifiedShow Answer

When tariffs on imported products are removed by a nation, it will result in

Correct AnswerverifiedShow Answer

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that

Correct AnswerverifiedShow Answer

If demand for a product is increasing, an import tariff is less restrictive than an import quota.

Correct AnswerverifiedShow Answer

A nation's import demand curve for a specific product

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Some people accuse an offshoring firm of "exporting jobs". This activity called offshoring is really equivalent to

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 60 Y. Comparable figures for nation Beta are 60 X and 40 Y. Beta would prefer terms of trade at, or close to, 1X = 1½Y.

Correct AnswerverifiedShow Answer

Trade protection in most instances transfers wealth from consumers to domestic producers.

Correct AnswerverifiedShow Answer

In 2015, U.S. exports of services U.S. imports of services by about .

Correct AnswerverifiedShow Answer

A tariff is a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In 2015, the United States had its first-ever trade surplus with OPEC.

Correct AnswerverifiedShow Answer

Which of the following was not one of the principles on which the General Agreement on Tariffs and Trade (GATT) was established?

Correct AnswerverifiedShow Answer

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