Question 1

The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

Accepted Answer

A)  the production possibilities curves of any two nations are identical.
B)  a nation's production possibilities and trading possibilities lines coincide.
C)  a nation's trading possibilities line lies to the right of its production possibilities line.
D)  a nation's production possibilities line lies to the right of its trading possibilities line.E) A) and D)
F) B) and C)

Question 2

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia.  The given data indicate that production in

Accepted Answer

A)  both Latalia and Trombonia are 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) A) and B)
F) A) and C)

Question 3

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Beta

Accepted Answer

A)  should specialize in catching fish and trade with Alpha for chips.
B)  should specialize in producing chips and trade with Alpha for fish.
C)  will not realize gains from specialization and trade.
D)  will export both fish and chips to Alpha.E) B) and C)
F) None of the above

Question 4

State how the world economy can benefit from free trade.

Accepted Answer

Through free trade, the world economy ca...

Question 5

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

Accepted Answer

A)  Trade barriers protect the development of new technology, but the new technology eliminates jobs.
B)  Import restrictions alter the composition of domestic employment, but they have minimal effect on the overall level of domestic employment.
C)  The volume of trade with other nations is limited to a few industries, so trade restrictions would not increase national employment.
D)  Major American firms have produced many products in other countries and would not hire more domestic labor when trade barriers are imposed.E) B) and D)
F) C) and D)

Question 6

The primary gain from international trade is

Accepted Answer

A)  increased employment in the domestic export sector.
B)  more goods than would be attainable through domestic production alone.
C)  tariff revenue.
D)  increased employment in the domestic import sector.E) C) and D)
F) None of the above

Question 7

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. If Alpha had produced 20X and 30Y and Beta had produced 30X and 20Y before specialization and trade, then we can say that the gains from specialization and trade are 10X and 10Y.

Accepted Answer

A) True 
 B)False

Question 8

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Accepted Answer

A)  tariff.
B)  quota.
C)  nontariff barrier.
D)  voluntary export restriction.E) None of the above
F) A) and B)

Question 9

Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the total revenue (after tariff) going to domestic producers would be

Accepted Answer

A)  $11,200, and the total revenue (after tariff) going to foreign producers would be $2,800.
B)  $11,200, and the total revenue (after tariff) going to foreign producers would be $2,400.
C)  $8,400, and the total revenue (after tariff) going to foreign producers would be $2,800.
D)  $13,200, and the total revenue (after tariff) going to foreign producers would be $2,400.E) A) and C)
F) A) and B)

Question 10

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-term protection from foreign competition in order to grow.
C)  Specialization along the lines of comparative advantage can lead to some economic instability in a nation.
D)  When other nations' economies grow, they typically import fewer goods and services.E) A) and C)
F) B) and D)

Question 11

Refer to the diagram, which pertains to two nations and a specific product. The equilibrium world price occurs at

Accepted Answer

A)  F.
B)  I.
C)  G.
D)  J.E) A) and D)
F) B) and C)

Question 12

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size.  The domestic opportunity cost of

Accepted Answer

A)  producing a ton of chips in Alpha is 1/5 of a ton of fish.
B)  producing a ton of chips in Beta is 6 tons of fish.
C)  catching a ton of fish in Alpha is 5 tons of chips.
D)  catching a ton of fish in Beta is 6 tons of chips.E) All of the above
F) B) and D)

Question 13

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

Question 14

The percentage of the United States' domestic output that is derived from international trade is higher than that for any other industrially advanced nation.

Accepted Answer

A) True 
 B)False

Question 15

The World Trade Organization was established by the United States to force other nations to open their markets to U.S. goods.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a likely result of imposing tariffs to increase domestic employment?

Accepted Answer

A)  a decrease in consumer prices
B)  a decrease in the tariff rates of foreign nations
C)  an increase in the number of jobs
D)  an increase in the possibility of retaliatory tariffsE) B) and D)
F) All of the above

Question 17

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

Accepted Answer

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

Question 18

d) , and Column 3 is the quantity supplied domestically (Qₛd) . At what price will Country X import 100 units of the product? A) $4.00 B) $3.00 C) $2.00 D) $1.00" class="answers-bank-image d-inline" rel="preload" > The accompanying table gives data for Country X. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically (Qd) , and Column 3 is the quantity supplied domestically (Qₛd) . At what price will Country X import 100 units of the product?

Accepted Answer

A)  $4.00
B)  $3.00
C)  $2.00
D)  $1.00E) A) and B)
F) A) and C)

Question 19

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 20

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia.  If these two nations specialize on the basis of comparative advantage,

Accepted Answer

A)  Trombonia will produce beans and Latalia will produce pork.
B)  Trombonia will produce both beans and pork.
C)  Latalia will produce both beans and pork, and Trombonia will produce neither.
D)  Latalia will produce beans, and Trombonia will produce pork.E) B) and D)
F) C) and D)

Exam 26: International Trade

The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

Correct Answer
verified

The accompanying table gives data for Country X. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically (Q_d) , and Column 3 is the quantity supplied domestically (Qₛ_d) . At what price will Country X import 100 units of the product?

Correct Answer
verified

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. The domestic opportunity cost of

Correct Answer
verified

Which is not a commonly heard argument for protectionism?

Correct Answer
verified

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia. The given data indicate that production in

Correct Answer
verified

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

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

Correct Answer
verified

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Correct Answer
verified

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Beta

Correct Answer
verified

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

Correct Answer
verified

Which of the following is a likely result of imposing tariffs to increase domestic employment?

Correct Answer
verified

State how the world economy can benefit from free trade.

Correct Answer
verified
Through free trade, the world economy ca...
View 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 Answer
verified

The primary gain from international trade is

Correct Answer
verified

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia. If these two nations specialize on the basis of comparative advantage,

Correct Answer
verified

Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the total revenue (after tariff) going to domestic producers would be

Correct Answer
verified

The World Trade Organization was established by the United States to force other nations to open their markets to U.S. goods.

Correct Answer
verified

Refer to the diagram, which pertains to two nations and a specific product. The equilibrium world price occurs at

Correct Answer
verified

The percentage of the United States' domestic output that is derived from international trade is higher than that for any other industrially advanced nation.

Correct Answer
verified

Exam 26: International Trade

The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

Correct AnswerverifiedShow Answer

The accompanying table gives data for Country X. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically (Qd) , and Column 3 is the quantity supplied domestically (Qₛd) . At what price will Country X import 100 units of the product?

Correct AnswerverifiedShow Answer

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. The domestic opportunity cost of

Correct AnswerverifiedShow Answer

Which is not a commonly heard argument for protectionism?

Correct AnswerverifiedShow Answer

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia. The given data indicate that production in

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Correct AnswerverifiedShow Answer

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Beta

Correct AnswerverifiedShow Answer

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

Correct AnswerverifiedShow Answer

Which of the following is a likely result of imposing tariffs to increase domestic employment?

Correct AnswerverifiedShow Answer

State how the world economy can benefit from free trade.

Correct AnswerverifiedThrough free trade, the world economy ca...View AnswerShow 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

The primary gain from international trade is

Correct AnswerverifiedShow Answer

Answer the question on the basis of the accompanying production possibilities tables for two countries, Latalia and Trombonia. If these two nations specialize on the basis of comparative advantage,

Correct AnswerverifiedShow Answer

Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the total revenue (after tariff) going to domestic producers would be

Correct AnswerverifiedShow Answer

The World Trade Organization was established by the United States to force other nations to open their markets to U.S. goods.

Correct AnswerverifiedShow Answer

Refer to the diagram, which pertains to two nations and a specific product. The equilibrium world price occurs at

Correct AnswerverifiedShow Answer

The percentage of the United States' domestic output that is derived from international trade is higher than that for any other industrially advanced nation.

Correct AnswerverifiedShow Answer

Correct Answer
verified

The accompanying table gives data for Country X. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically (Q_d) , and Column 3 is the quantity supplied domestically (Qₛ_d) . At what price will Country X import 100 units of the product?

Correct Answer
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Through free trade, the world economy ca...
View Answer

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