Question 1

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. s is domestic quantity supplied and Qd is domestic quantity demanded.   Refer to the above data.The equilibrium world price must be lower than $4 because at $4: A) both nations want to import steel. B) both nations want to export steel. C) Beta wants to export more than Alpha. D) Alpha wants to import more than Beta." class="answers-bank-image d-inline" rel="preload" > Refer to the above data.The equilibrium world price must be lower than $4 because at $4:

Accepted Answer

A)  both nations want to import steel.
B)  both nations want to export steel.
C)  Beta wants to export more than Alpha.
D)  Alpha wants to import more than Beta.E) A) and C)
F) B) and C)

Question 2

GATT was an international organization designed to provide short-term advances of foreign monies to those nations faced with trade deficits.

Accepted Answer

A) True 
 B)False

Question 3

Which is not commonly offered as a reason to support protectionism and abandon free trade?

Accepted Answer

A)  maintaining military self-sufficiency
B)  increasing domestic employment
C)  allowing infant industries to mature and become competitive
D)  promoting specialization and increasing worldwide production levelsE) A) and B)
F) B) and C)

Question 4

Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price for this product is $.50, this nation will experience a domestic:

Accepted Answer

A)  shortage of 160 units, which it will meet with 160 units of imports.
B)  shortage of 160 units, which will increase the domestic price to $1.60.
C)  surplus of 160 units which it will export.
D)  surplus of 160 units, which will reduce the world price to $1.00.E) None of the above
F) B) and C)

Question 5

Which is an example of a nontariff barrier (NTB) ?

Accepted Answer

A)  an excise tax on exported goods
B)  an excise tax on imported goods
C)  box-by-box inspection requirements for imported fruit
D)  an excise tax placed on a product that is not produced domestically.E) C) and D)
F) B) and C)

Question 6

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1.  Refer to the above data.With a $1 dollar per unit tariff, price and total quantity sold will be:

Accepted Answer

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

Question 7

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

Accepted Answer

A)  chemicals
B)  autos
C)  watches
D)  woolE) B) and C)
F) None of the above

Question 8

Which is not a commonly heard argument for protectionism?

Accepted Answer

A)  A strong national defense requires that some military products be produced domestically.
B)  Infant industries need short-run, but not long-run, protection from foreign competition.
C)  Specialization along the lines of comparative advantage can lead to greater economic instability for a nation.
D)  When other nations' economies grow they typically import fewer goods and services.E) A) and C)
F) None of the above

Question 9

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1.  Refer to the above data.With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

Accepted Answer

A)  1 unit and 15 units.
B)  4 units and 7 units.
C)  7 units and 0 units.
D)  4 units and 6 units.E) None of the above
F) B) and C)

Question 10

Refer to the diagram below in which, line AB is the Canadian production possibility curve and AC is its trading possibilities curve.We can conclude that Canada:

Accepted Answer

A)  has chosen to specialize in the production of cheese.
B)  has chosen to specialize in the production of beef.
C)  has decided to trade beef for cheese.
D)  is relatively more efficient than its trading partners in producing both cheese and beef.E) B) and D)
F) B) and C)

Question 11

Dumping is the sale of a product in a foreign market:

Accepted Answer

A)  at a price below its domestic price or cost of production.
B)  that does not meet the quality standards in the domestic market.
C)  and is the principal means used to enforce nontariff barriers.
D)  and is encouraged by voluntary export restraints.E) C) and D)
F) B) and D)

Question 12

The following information is about the cost ratios for two products-fish (F)  and chicken (C) -in Singsong and Harmony.Assume that production occurs under conditions of constant costs and these are the only two nations in the world.If in Singsong: 1F = 2C and, in Harmony: 1F = 4C:

Accepted Answer

A)  Singsong will both produce chicken and catch fish.
B)  Harmony will both produce chicken and catch fish.
C)  Harmony will produce chicken and Singsong will catch fish.
D)  Singsong will produce chicken and Harmony will catch fish.E) All of the above
F) A) and D)

Question 13

The terms of trade reflects 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 14

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n) :

Accepted Answer

A)  protective tariff.
B)  export subsidy.
C)  import quota.
D)  voluntary export restriction.E) B) and C)
F) A) and B)

Question 15

In terms of absolute volume, world trade is dominated by:

Accepted Answer

A)  Japan, Germany, and China.
B)  the United States, England, and China.
C)  Germany, England, and France.
D)  Germany, the United States, and China.E) A) and B)
F) B) and C)

Question 16

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt or an import quota of wy will: A) have the same effect on the volume of imports. B) have the same effect on domestic price. C) have the same effect on the revenues of domestic producers. D) do all of the above." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt or an import quota of wy will:

Accepted Answer

A)  have the same effect on the volume of imports.
B)  have the same effect on domestic price.
C)  have the same effect on the revenues of domestic producers.
D)  do all of the above.E) A) and C)
F) C) and D)

Question 17

The "infant industry" argument for tariffs is criticized:

Accepted Answer

A)  because it is difficult to determine which industries merit protection.
B)  because direct subsidies are probably a better means of stimulating such industries.
C)  because the tariffs may remain after the industry reaches maturity.
D)  for all of the above reasons.E) A) and D)
F) B) and D)

Question 18

An excise tax on imported goods is known as a(n) :

Accepted Answer

A)  quota.
B)  tariff.
C)  export restriction.
D)  price ceiling.E) C) and D)
F) None of the above

Question 19

Which of the following countries had the highest percentage of exports as a percentage of GDP in 2015?.Use Image 17.2 Global Perspective.

Accepted Answer

A)  Belgium
B)  United States
C)  Japan
D)  SpainE) A) and B)
F) None of the above

Question 20

The North American Free Trade Agreement (NAFTA) :

Accepted Answer

A)  resulted from GATT negotiations at the Uruguay Round.
B)  permits the European Union to export goods tariff free to North America.
C)  has eliminated most of the tariffs and other trade barriers among Canada, Mexico, and the United States.
D)  will reduce American exports to Mexico.E) B) and C)
F) B) and D)

Exam 17: Part B: International Trade

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. Refer to the above data.With a $1 dollar per unit tariff, price and total quantity sold will be:

Correct AnswerverifiedShow Answer

Dumping is the sale of a product in a foreign market:

Correct AnswerverifiedShow Answer

In terms of absolute volume, world trade is dominated by:

Correct AnswerverifiedShow Answer

Which of the following countries had the highest percentage of exports as a percentage of GDP in 2015?.Use Image 17.2 Global Perspective.

Correct AnswerverifiedShow Answer

GATT was an international organization designed to provide short-term advances of foreign monies to those nations faced with trade deficits.

Correct AnswerverifiedShow Answer

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. Refer to the above data.With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

Correct AnswerverifiedShow Answer

The terms of trade reflects the:

Correct AnswerverifiedShow Answer

An excise tax on imported goods is known as a(n) :

Correct AnswerverifiedShow Answer

Which is an example of a nontariff barrier (NTB) ?

Correct AnswerverifiedShow Answer

Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt or an import quota of wy will:

Correct AnswerverifiedShow Answer

Refer to the diagram below in which, line AB is the Canadian production possibility curve and AC is its trading possibilities curve.We can conclude that Canada:

Correct AnswerverifiedShow Answer

Which is not commonly offered as a reason to support protectionism and abandon free trade?

Correct AnswerverifiedShow Answer

Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price for this product is $.50, this nation will experience a domestic:

Correct AnswerverifiedShow Answer

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. Refer to the above data.The equilibrium world price must be lower than $4 because at $4:

Correct AnswerverifiedShow Answer

Country A limits other nation's exports to Country A to 1,000 tons of coal annually.This is an example of a(n) :

Correct AnswerverifiedShow Answer

The North American Free Trade Agreement (NAFTA) :

Correct AnswerverifiedShow Answer

The "infant industry" argument for tariffs is criticized:

Correct AnswerverifiedShow Answer

Which is not a commonly heard argument for protectionism?

Correct AnswerverifiedShow Answer

The following information is about the cost ratios for two products-fish (F) and chicken (C) -in Singsong and Harmony.Assume that production occurs under conditions of constant costs and these are the only two nations in the world.If in Singsong: 1F = 2C and, in Harmony: 1F = 4C:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.A tariff of P_cP_t or an import quota of wy will:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The following data is for the hypothetical nations of Alpha and Beta.Q_s is domestic quantity supplied and Q_d is domestic quantity demanded. Refer to the above data.The equilibrium world price must be lower than $4 because at $4:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified