Question 1

The U.S.-Colombia Trade Promotion Agreement was signed on November 22, 2006, in Washington, D.C. This comprehensive trade agreement eliminated tariffs and other barriers to goods and services. Currently, no U.S. agricultural exports enjoy tariff- free access to the Colombian market. If the United States has a comparative advantage in agricultural, which of the following is true?

Accepted Answer

A)   Columbian agricultural consumers were better off before free trade.
B)   Columbian agricultural producers were better off before free trade.
C)   Columbia must have comparative disadvantage in all production.
D)   Columbia was better off before the international trade.

Question 2

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt.
-In the figure above, with the tariff the United States imports million shirts per year.

Accepted Answer

A)   8
B)   32
C)   24
D)   16 D

Question 3

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is _ the world price

Accepted Answer

A)   less than
B)   greater than
C)   equal to
D)   not comparable to

Question 4

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Accepted Answer

A)   Protectionism eliminates domestic jobs in export industries.
B)   The cost of saving domestic jobs through protectionism may be high.
C)   Imports create jobs in this country for people selling and servicing imported items.
D)   all of the above

Question 5

Rent seeking is one reason why countries choose to

Accepted Answer

A)   follow the theory of comparative advantage.
B)   restrict trade.
C)   work for freer trade.
D)   export and import the same goods.

Question 6

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Accepted Answer

A)   dumping.
B)   an import quota.
C)   a voluntary export restraint.
D)   a tariff. D

Question 7

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt.
-In the figure above, with international trade the United States million shirts per year.

Accepted Answer

A)   imports 48
B)   exports 32
C)   exports 16
D)   imports 32

Question 8

In 2006, European Union tariff on imported bananas from Latin America was €176 a ton. Suppose
2) 5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the change in tariff revenue between 2006 and 2007?

Accepted Answer

A)   - €1,000,000
B)   €1,000,000
C)   €440,000,000
D)   €445,000,000

Question 9

The reason tariffs and quotas are imposed is that

Accepted Answer

A)   their costs are spread among many people and their benefits are concentrated.
B)   they create net benefits in the long run.
C)   they reduce import dependence.
D)   their costs are concentrated and their benefits are spread among many people.

Question 10

Give a brief description of the history of tariffs in the U.S.

Accepted Answer

Today, U.S. tariffs are low compared to ...

Question 11

It is possible for the United States to compete against cheap foreign labor because expensive domestic workers

Accepted Answer

A)   belong to unions.
B)   receive subsidies.
C)   pay U.S. taxes.
D)   are more productive.

Question 12

The most efficient way to encourage the growth of an infant- industry is through a

Accepted Answer

A)   voluntary export restraint.
B)   an import quota.
C)   subsidy.
D)   tariff. C

Question 13

The fundamental force that drives international trade is

Accepted Answer

A)   importation duties and tariffs.
B)   comparative advantage.
C)   export licenses.
D)   absolute advantage.

Question 14

Which of the following statements about U.S. tariffs is true?

Accepted Answer

A)   U.S. tariffs have generally decreased since World War II.
B)   U.S. tariff rates now are lower than at most other times in the past 70 years.
C)   U.S. tariffs reached a peak of about 20 percent in 1933 as a result of passage of the Smoot- Hawley Act.
D)   All of the above answers are correct.

Question 15

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers fr cheap foreign labor?
I. Low- wage foreigners are just as productive as U.S. workers.
II. U.S. workers have a comparative advantage in low- wage jobs.

Accepted Answer

A)   II only
B)   I only
C)   I and II
D)   Neither I nor II is correct.

Question 16

An import quota directly restricts _ and are designed to protect domestic .

Accepted Answer

A)   imports; producers
B)   imports; consumers
C)   exports; consumers
D)   exports; producers

Question 17

Tariffs

Accepted Answer

A)   generate revenue for the government.
B)   generate revenue for consumers.
C)   encourage domestic producers to produce less.
D)   encourage domestic consumers to buy more imports.

Question 18

Agriculture Secretary Ed Schafer today announced that Chile's Livestock and Agricultural Service approved the U.S. inspection, control and certification systems for poultry, allowing these products to enter the Chilean market effective immediately. What is NOT an effect of this change in Chilean policy on the Chilean poultry market?

Accepted Answer

A)   The quantity of Chilean imports will increase.
B)   The quantity of poultry consumed in Chile will increase.
C)   The price for poultry in Chile will decrease.
D)   Chile's tariff revenue will increase.

Question 19

Economists usually agree with which of the following arguments that favor protectionism?

Accepted Answer

A)   the competition with cheap foreign labor defense
B)   the dumping defense
C)   the job protection defense
D)   None of the above. Economists generally agree that arguments in favor of protection are flawed.

Question 20

If a government imposes a quota on imports of a popular doll, the price of the doll in the country will and the quantity purchased in the country will .

Accepted Answer

A)   rise; increase
B)   fall; decrease
C)   rise; decrease
D)   fall; increase

Exam 15: International Trade Policy

Correct Answer
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Correct Answer
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D

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is _ the world price

Correct Answer
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Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Correct Answer
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Rent seeking is one reason why countries choose to

Correct Answer
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A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Correct Answer
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D

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. -In the figure above, with international trade the United States million shirts per year.

Correct Answer
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Correct Answer
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The reason tariffs and quotas are imposed is that

Correct Answer
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Give a brief description of the history of tariffs in the U.S.

Correct Answer
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Today, U.S. tariffs are low compared to ...
View Answer

It is possible for the United States to compete against cheap foreign labor because expensive domestic workers

Correct Answer
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The most efficient way to encourage the growth of an infant- industry is through a

Correct Answer
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C

The fundamental force that drives international trade is

Correct Answer
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Which of the following statements about U.S. tariffs is true?

Correct Answer
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Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers fr cheap foreign labor? I. Low- wage foreigners are just as productive as U.S. workers. II. U.S. workers have a comparative advantage in low- wage jobs.

Correct Answer
verified

An import quota directly restricts _ and are designed to protect domestic .

Correct Answer
verified

Tariffs

Correct Answer
verified

Correct Answer
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Economists usually agree with which of the following arguments that favor protectionism?

Correct Answer
verified

If a government imposes a quota on imports of a popular doll, the price of the doll in the country will and the quantity purchased in the country will .

Correct Answer
verified

Exam 15: International Trade Policy

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is _ the world price

Correct AnswerverifiedShow Answer

Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?

Correct AnswerverifiedShow Answer

Rent seeking is one reason why countries choose to

Correct AnswerverifiedShow Answer

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Correct AnswerverifiedD

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. -In the figure above, with international trade the United States million shirts per year.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The reason tariffs and quotas are imposed is that

Correct AnswerverifiedShow Answer

Give a brief description of the history of tariffs in the U.S.

Correct AnswerverifiedToday, U.S. tariffs are low compared to ...View AnswerShow Answer

It is possible for the United States to compete against cheap foreign labor because expensive domestic workers

Correct AnswerverifiedShow Answer

The most efficient way to encourage the growth of an infant- industry is through a

Correct AnswerverifiedC

The fundamental force that drives international trade is

Correct AnswerverifiedShow Answer

Which of the following statements about U.S. tariffs is true?

Correct AnswerverifiedShow Answer

Which of the following are TRUE regarding the argument that trade barriers protect U.S. workers fr cheap foreign labor? I. Low- wage foreigners are just as productive as U.S. workers. II. U.S. workers have a comparative advantage in low- wage jobs.

Correct AnswerverifiedShow Answer

An import quota directly restricts _ and are designed to protect domestic .

Correct AnswerverifiedShow Answer

Tariffs

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economists usually agree with which of the following arguments that favor protectionism?

Correct AnswerverifiedShow Answer

If a government imposes a quota on imports of a popular doll, the price of the doll in the country will and the quantity purchased in the country will .

Correct AnswerverifiedShow Answer

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D

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D

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Today, U.S. tariffs are low compared to ...
View Answer

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C

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