Question 1

Studies show that:

Accepted Answer

A)   it is impossible to estimate the benefits of trade barriers.
B)   costs and benefits of trade barriers are about equal.
C)   benefits of trade barriers exceed their costs in developing nations.
D)   costs of trade barriers exceed their benefits,creating an efficiency loss for society.E) B) and C)
F) A) and C)

Question 2

Excise taxes on imported goods that help shield domestic producers of the good are called:

Accepted Answer

A)   protective tariffs.
B)   import quotas.
C)   revenue tariffs.
D)   voluntary export restrictions.E) B) and D)
F) None of the above

Question 3

Barriers to free trade impair efficiency in the international allocation of resources.

Accepted Answer

A) True 
 B)False

Question 4

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 5

A nation's export supply curve is downsloping and its import demand curve is upsloping.

Accepted Answer

A) True 
 B)False

Question 6

Answer the question on the basis of the following information about the 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 these are the only two nations in the world. Singsong: 1F = 2C
Harmony: 1F = 4C
Refer to the given information.If these two nations specialize based on comparative advantage:

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

Question 7

In the theory of comparative advantage,a good should be produced in that nation where:

Accepted Answer

A)   the production possibilities line lies further to the right than the trading possibilities line.
B)   its cost is least in terms of alternative goods that might otherwise be produced.
C)   its absolute cost in terms of real resources used is least.
D)   its absolute money cost of production is least.E) A) and D)
F) None of the above

Question 8

How many European nations belong 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) All of the above
F) B) and C)

Question 9

Tariffs create larger gains to domestic producers than losses to domestic consumers.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

In 2012,the United States:

Accepted Answer

A)   imported more services than it exported.
B)   imported more goods than it exported.
C)   traded mainly with developing nations such as Mexico and India.
D)   had a small trade surplus in goods and services.E) None of the above
F) B) and C)

Question 12

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

Question 13

An excise tax on an imported good that is not produced domestically is called a:

Accepted Answer

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

Question 14

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) A) and D)

Question 15

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

Accepted Answer

A)   Chemicals.
B)   Autos.
C)   Watches.
D)   Wool.E) B) and D)
F) C) and D)

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) All of the above

Question 17

In order for mutually beneficial trade to occur between two otherwise isolated nations:

Accepted Answer

A)   each nation must be able to produce at least one good absolutely cheaper than the other.
B)   each nation must be able to produce at least one good relatively cheaper than the other.
C)   each nation must face constant costs in the production of the good it exports.
D)   one nation's production must be labor-intensive while the other nation's production is capital-intensive.E) A) and D)
F) C) and D)

Question 18

In comparing a tariff and an import quota,we find that:

Accepted Answer

A)   the tariff and quota both generate the same amount of revenue for the U.S.Treasury.
B)   the tariff generates revenue for the U.S.Treasury,but the quota does not.
C)   the quota generates revenue for the U.S.Treasury,but the tariff does not.
D)   neither the tariff nor the quota generates revenue for the U.S.Treasury.E) C) and D)
F) None of the above

Question 19

Answer the question on the basis of the following production possibilities data for two countries,Alpha and Beta,which have populations of equal size.   Alpha’s Production Possibilities ‾Fish (Tons) Chips (Tons) A ‾800B ‾605C ‾4010D ‾2015E ‾020\begin{array}{c}\quad\quad\underline{	ext { Alpha&#x27;s Production Possibilities }}\\begin{array}{lll} \ 	ext {Fish (Tons) }\  	ext {Chips (Tons) } \end{array}\begin{array}{c}\underline{	ext {A }}\ 80 \0\end{array}\begin{array}{c}\underline{	ext {B }}\ 60 \5\end{array}\begin{array}{c}\underline{	ext {C }}\ 40 \10\end{array}\begin{array}{c}\underline{	ext {D }}\20 \15\end{array}\begin{array}{c}\underline{	ext {E }}\0 \20 \end{array}\end{array} Alpha’s Production Possibilities ​Fish (Tons) Chips (Tons) ​A ​800​B ​605​C ​4010​D ​2015​E ​020​​

Beta’s Production Possibilities ‾Fish (Tons) Chips (Tons) A ‾2400B ‾18010C ‾12020D ‾6030E ‾040\begin{array}{c}\quad\quad\underline{	ext { Beta&#x27;s Production Possibilities }}\\begin{array}{lll} \ 	ext {Fish (Tons) }\  	ext {Chips (Tons) } \end{array}\begin{array}{c}\underline{	ext {A }}\240 \0\end{array}\begin{array}{c}\underline{	ext {B }}\ 180 \10\end{array}\begin{array}{c}\underline{	ext {C }}\120 \20\end{array}\begin{array}{c}\underline{	ext {D }}\60 \30\end{array}\begin{array}{c}\underline{	ext {E }}\0 \40 \end{array}\end{array} Beta’s Production Possibilities ​Fish (Tons) Chips (Tons) ​A ​2400​B ​18010​C ​12020​D ​6030​E ​040​​

Refer to the given data.Suppose that before specialization and trade Alpha chose production alternative C and Beta chose production alternative B.After specialization and trade,the gains will be:

Accepted Answer

A)   20 tons of fish.
B)   20 tons of chips.
C)   20 tons of fish and 20 tons of chips.
D)   240 tons of fish and 20 tons of chips. E) All of the above
F) None of the above

Question 20

A side benefit of international trade is that it links national interests and increases the opportunity costs of war.

Accepted Answer

A) True 
 B)False

Exam 39: International Trade

Tariffs create larger gains to domestic producers than losses to domestic consumers.

Correct Answer
verified

Excise taxes on imported goods that help shield domestic producers of the good are called:

Correct Answer
verified

Studies show that:

Correct Answer
verified

In the theory of comparative advantage,a good should be produced in that nation where:

Correct Answer
verified

In order for mutually beneficial trade to occur between two otherwise isolated nations:

Correct Answer
verified

The World Trade Organization was established as a successor to:

Correct Answer
verified

Correct Answer
verified

Barriers to free trade impair efficiency in the international allocation of resources.

Correct Answer
verified

Correct Answer
verified

The World Trade Organization:

Correct Answer
verified

A nation's import demand curve for a specific product:

Correct Answer
verified

A nation's export supply curve is downsloping and its import demand curve is upsloping.

Correct Answer
verified

In 2012,the United States:

Correct Answer
verified

How many European nations belong to the European Union (EU) ?

Correct Answer
verified

A side benefit of international trade is that it links national interests and increases the opportunity costs of war.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

An excise tax on an imported good that is not produced domestically is called a:

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

In comparing a tariff and an import quota,we find that:

Correct Answer
verified

Exam 39: International Trade

Tariffs create larger gains to domestic producers than losses to domestic consumers.

Correct AnswerverifiedShow Answer

Excise taxes on imported goods that help shield domestic producers of the good are called:

Correct AnswerverifiedShow Answer

Studies show that:

Correct AnswerverifiedShow Answer

In the theory of comparative advantage,a good should be produced in that nation where:

Correct AnswerverifiedShow Answer

In order for mutually beneficial trade to occur between two otherwise isolated nations:

Correct AnswerverifiedShow Answer

The World Trade Organization was established as a successor to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Barriers to free trade impair efficiency in the international allocation of resources.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The World Trade Organization:

Correct AnswerverifiedShow Answer

A nation's import demand curve for a specific product:

Correct AnswerverifiedShow Answer

A nation's export supply curve is downsloping and its import demand curve is upsloping.

Correct AnswerverifiedShow Answer

In 2012,the United States:

Correct AnswerverifiedShow Answer

How many European nations belong to the European Union (EU) ?

Correct AnswerverifiedShow Answer

A side benefit of international trade is that it links national interests and increases the opportunity costs of war.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An excise tax on an imported good that is not produced domestically is called a:

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

In comparing a tariff and an import quota,we find that:

Correct AnswerverifiedShow Answer

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