Question 1

Comparative advantage is another name for absolute advantage.

Accepted Answer

A) True 
 B)False

Question 2

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) All of the above
F) A) and C)

Question 3

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

Question 4

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

Accepted Answer

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

Question 6

Machines  Wine  France 31 Germany 11\begin{array} { | l | c | c | } \hline & 	ext { Machines } & 	ext { Wine } \\hline 	ext { France } & 3 & 1 \\hline 	ext { Germany } & 1 & 1 \\hline\end{array} France  Germany ​ Machines 31​ Wine 11​​  The accompanying table shows the output (either machines or wine)  that each unit of input in France and Germany can produce. We see that

Accepted Answer

A)   France has an absolute advantage over Germany in producing either output.
B)   Germany has an absolute disadvantage in producing wine.
C)   Germany has no absolute advantage over France in producing either output.
D)   France will see no economic basis for trading with Germany. E) All of the above
F) None of the above

Question 7

Which of the following statements best describes a protective tariff?

Accepted Answer

A)   an excise tax that is usually applied to products that are not produced domestically in order to raise revenues for government
B)   an excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets
C)   a speciﬁcation of the maximum amount of a product that may be imported in any period of time that is often used to protect domestic producers of a product
D)   such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protectDomestic marketsE) A) and B)
F) None of the above

Question 8

Refer to the diagram, which pertains to two nations and a speciﬁc product. In equilibrium, the nation represented by lines FA and FC will

Accepted Answer

A)   export H to the country represented by lines GB and GD.
B)   import H from the country represented by lines GB and GD.
C)   pay price F for its imports.
D)   receive price G for its exports.E) A) and D)
F) A) and C)

Question 9

Accepted Answer

A)    PaPt×wyP _ { a } P _ { t } 	imes w yPa​Pt​×wy 
B)    PCPa×xP _ { C } P _ { a } 	imes xPC​Pa​×x 
C)    PcPt×wyP _ { c } P _ { t } 	imes w yPc​Pt​×wy 
D)    PCPt×zP _ { C } P _ { t } 	imes zPC​Pt​×zE) None of the above
F) B) and C)

Question 10

What was the General Agreement on Tariffs and Trade (GATT)?

Accepted Answer

The General Agreement on Tariffs and Tra...

Question 11

Quantity Demanded  Domestically  Price  Quantity Supplied  Domestically 1,400$102,2001,60092,0001,80081,8002,00071,6002,20061,4002,40051,200\begin{array} { | c | c | c | } \hline \begin{array} { c } 	ext { Quantity Demanded } \	ext { Domestically }\end{array} & 	ext { Price } & \begin{array} { c } 	ext { Quantity Supplied } \	ext { Domestically }\end{array} \\hline 1,400 & \$ 10 & 2,200 \\hline 1,600 & 9 & 2,000 \\hline 1,800 & 8 & 1,800 \\hline 2,000 & 7 & 1,600 \\hline 2,200 & 6 & 1,400 \\hline 2,400 & 5 & 1,200 \\hline\end{array} Quantity Demanded  Domestically ​1,4001,6001,8002,0002,2002,400​ Price $1098765​ Quantity Supplied  Domestically ​2,2002,0001,8001,6001,4001,200​​  Refer to the accompanying table for a certain product's market in Econland. If Econland was entirely closed to international trade, the equilibrium price and quantity would be

Accepted Answer

A)   $9 and 2,000 units.
B)   $8 and 1,800 units.
C)   $7 and 2,000 units.
D)   $6 and 1,400 units. E) All of the above
F) A) and B)

Question 12

In terms of absolute dollar volume, the top 3 leaders in world exports are

Accepted Answer

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

Question 13

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

Question 14

Export supply curves are __________________; import demand curves are ___________________.

Accepted Answer

A)   horizontal; vertical
B)   vertical; horizontal
C)   downsloping; upsloping
D)   upsloping; downslopingE) C) and D)
F) None of the above

Question 15

Which of the following statements about the European Union (EU)  is true?

Accepted Answer

A)   All members of the EU use a common currency (the euro) .
B)   The EU has abolished most trade barriers among participating countries and has common tariffs applied to non-EU goods.
C)   The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital.
D)   Trade within the EU is liberalized, but EU nations set most of their own policies with regard to trade with non-EU nations.E) A) and D)
F) B) and C)

Question 16

Accepted Answer

A)   $0 revenue difference
B)   $80 more revenue with a quota than with a tariff
C)   $200 more revenue with a quota than with a tariff
D)   $120 more revenue with a tariff than with a quotaE) A) and D)
F) B) and C)

Question 17

Among the principal exports of the United States are agricultural products.

Accepted Answer

A) True 
 B)False

Question 18

What does it mean to have an absolute advantage in the production of two goods?

Accepted Answer

A country has an absolute advantage over...

Question 19

If a nation exports a product, then the price of that product in the nation

Accepted Answer

A)   will rise above the domestic (no-trade)  equilibrium price.
B)   will fall below the domestic (no-trade)  equilibrium price.
C)   will remain the same as the domestic (no-trade)  equilibrium price.
D)   may either rise or fall, depending on the product.E) A) and B)
F) A) and C)

Question 20

What is the World Trade Organization and what assistance does it provide to its members?

Accepted Answer

The Uruguay Round agreement established ...

Exam 20: International Trade

Which of the following statements about the European Union (EU) is true?

Correct Answer
verified

In terms of absolute dollar volume, the top 3 leaders in world exports are

Correct Answer
verified

What is the World Trade Organization and what assistance does it provide to its members?

Correct Answer
verified
The Uruguay Round agreement established ...
View Answer

Comparative advantage is another name for absolute advantage.

Correct Answer
verified

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

Correct Answer
verified

Studies show that

Correct Answer
verified

What does it mean to have an absolute advantage in the production of two goods?

Correct Answer
verified
A country has an absolute advantage over...
View Answer

Correct Answer
verified

Export supply curves are ; import demand curves are _.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

$A) P _ { a } P _ { t } \times w y B) P _ { C } P _ { a } \times x C) P _ { c } P _ { t } \times w y D) P _ { C } P _ { t } \times z$

Correct Answer
verified

What was the General Agreement on Tariffs and Trade (GATT)?

Correct Answer
verified
The General Agreement on Tariffs and Tra...
View Answer

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Correct Answer
verified

Among the principal exports of the United States are agricultural products.

Correct Answer
verified

Refer to the diagram, which pertains to two nations and a speciﬁc product. In equilibrium, the nation represented by lines FA and FC will

Correct Answer
verified

If a nation exports a product, then the price of that product in the nation

Correct Answer
verified

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

Correct Answer
verified

Correct Answer
verified

Which of the following statements best describes a protective tariff?

Correct Answer
verified

Exam 20: International Trade

Which of the following statements about the European Union (EU) is true?

Correct AnswerverifiedShow Answer

In terms of absolute dollar volume, the top 3 leaders in world exports are

Correct AnswerverifiedShow Answer

What is the World Trade Organization and what assistance does it provide to its members?

Correct AnswerverifiedThe Uruguay Round agreement established ...View AnswerShow Answer

Comparative advantage is another name for absolute advantage.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Studies show that

Correct AnswerverifiedShow Answer

What does it mean to have an absolute advantage in the production of two goods?

Correct AnswerverifiedA country has an absolute advantage over...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Export supply curves are __________________; import demand curves are ___________________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What was the General Agreement on Tariffs and Trade (GATT)?

Correct AnswerverifiedThe General Agreement on Tariffs and Tra...View AnswerShow Answer

NAFTA is a trade agreement that covers trade between the United States and the European Union.

Correct AnswerverifiedShow Answer

Among the principal exports of the United States are agricultural products.

Correct AnswerverifiedShow Answer

Refer to the diagram, which pertains to two nations and a speciﬁc product. In equilibrium, the nation represented by lines FA and FC will

Correct AnswerverifiedShow Answer

If a nation exports a product, then the price of that product in the nation

Correct AnswerverifiedShow Answer

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements best describes a protective tariff?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Uruguay Round agreement established ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A country has an absolute advantage over...
View Answer

Correct Answer
verified

Export supply curves are ; import demand curves are _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The General Agreement on Tariffs and Tra...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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