Question 1

Exhibit 33-7
​
 
-Refer to Exhibit 33-7. The world price of good X is $15. Under a policy of free trade, the U.S. production of good X would be

Accepted Answer

A)  10 units.
B)  20 units.
C)  25 units.
D)  50 units.
E)  none of the above

Question 2

The situation where a country can produce a good at a lower opportunity cost than another country is called a(n)  __________ advantage.

Accepted Answer

A)  permanent
B)  transitory
C)  absolute
D)  comparative
E)  natural

Question 3

Exhibit 33-8
​
 
-Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports) . The government collects tariff revenues on sugar imports in the amount of __________ million.

Accepted Answer

A)  $500
B)  $1,000
C)  $1,500
D)  $2,000
E)  none of the above

Question 4

Countries tend to specialize in the production of goods in which they have a comparative advantage because

Accepted Answer

A)  government officials calculate opportunity costs and suggest to people what they ought to produce.
B)  people want to make a profit.
C)  the Economic Development Office of the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce.
D)  the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce.
E)  none of the above

Question 5

Tariffs raise the price of imported goods, but quotas rarely do.

Accepted Answer

A) True 
 B)False

Question 6

Company Z is a U.S. company that has just entered the market for a given good and is the first in this country to produce that good. The good is already being produced in many foreign countries is exported to the United States. If company Z wants to restrict this foreign competition, it will most likely use which of the following arguments?

Accepted Answer

A)  anti-dumping
B)  national-defense
C)  job-creation
D)  infant-industry
E)  low-foreign-wages

Question 7

Exhibit 33-7
​
 
-Refer to Exhibit 33-7. The world price of good X is $15. If imports of good X are legally limited to 30 units, the price of X in the United States would be

Accepted Answer

A)  $20.
B)  $25.
C)  $30.
D)  $35.
E)  none of the above

Question 8

If, at the world price, domestic producers are producing and selling 100 units of a good, then at the world price plus tariff it follows that

Accepted Answer

A)  they will be producing and selling more than 100 units of the good.
B)  they will be producing and selling fewer than 100 units of the good.
C)  producers' surplus will be less than what it is when domestic producers produce and sell 100 units.
D)  consumers' surplus will be greater than what it is when domestic producers produce and sell 100 units.
E)  c and d

Question 9

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. In the no specialization-no trade case, suppose country X produces and consumes 100 units of good A and 20 units of good B. Country Y produces and consumes 20 units of good A and 60 units of good B. If the two countries specialize and trade, and the actual amounts traded are 125 units of good A for 25 units of good B, how many more units of good B will country Y consume by specializing and trading?

Accepted Answer

A)  75
B)  5
C)  15
D)  10
E)  50

Question 10

Tariffs and quotas are often imposed when a government is more responsive to __________ interests, and the benefits of those trade restrictions are often __________.

Accepted Answer

A)  consumer; concentrated
B)  consumer; widely dispersed
C)  producer; concentrated
D)  producer; widely dispersed

Question 11

A French firm sells its good at a lower price in England than in France. It follows that the French firm is necessarily

Accepted Answer

A)  dumping.
B)  saving domestic jobs.
C)  being subsidized by the French government.
D)  part of an infant industry.
E)  none of the above

Question 12

A quota raises the price of the product on which the quota has been placed, decreases consumers' surplus, increases producers' surplus, and generates tariff revenue for the government.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is false?

Accepted Answer

A)  As a result of a quota, consumers' surplus falls.
B)  As a result of a tariff, producers' surplus rises.
C)  As a result of a tariff, consumers' surplus falls.
D)  As a result of a quota, producers' surplus rises.
E)  none of the above

Question 14

The act of selling goods abroad at a price below their cost and below the price charged in the domestic market is called

Accepted Answer

A)  dumping.
B)  slumping.
C)  export manipulation.
D)  constraining.
E)  none of the above

Question 15

The national defense argument for trade protectionism holds that

Accepted Answer

A)  what is good for business is good for the country.
B)  what is good for consumers is good for the country.
C)  consumers' surplus rises by more than producers' surplus falls.
D)  producers' surplus rises by more than consumers' surplus falls.
E)  none of the above

Question 16

With a quota, the __________ is greater than the __________.

Accepted Answer

A)  loss in producers' surplus; gain in consumers' surplus
B)  loss in consumers' surplus; loss in producers' surplus plus higher total revenues on the imported goods
C)  loss in producers' surplus plus higher total revenues on the imported goods; consumers' surplus
D)  tax; revenue
E)  quota-determined price; quota-determined output

Question 17

Exhibit 33-7
​
 
-Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X) . Americans purchase ______ units of good X from U.S. producers and import _______ units of good X from abroad.

Accepted Answer

A)  0; 50
B)  20; 25
C)  10; 30
D)  10; 40

Question 18

Exhibit 33-1
  ​
-Refer to Exhibit 33-1. Country A is the lower opportunity cost producer of

Accepted Answer

A)  good X.
B)  good Y.
C)  goods X and Y.
D)  neither good X nor good Y.

Question 19

Describe who benefits and who loses from tariffs and from quotas. What is the major difference between the effects of a quota and the effects of a tariff?

Accepted Answer

Tariffs and quotas both result in a decr...

Question 20

The national defense argument for trade restriction holds that

Accepted Answer

A)  the president should have the authority to erect trade barriers in case of war or national emergency.
B)  free trade is a danger to the national defense because open borders increase the likelihood that spies will get into the country.
C)  a country should produce those goods necessary for national defense purposes even if it doesn't have a comparative advantage in them.
D)  if your enemy erects trade restrictions, so should you.

Exam 33: International Trade

Which of the following statements is false?

Correct Answer
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Exhibit 33-1 -Refer to Exhibit 33-1. Country A is the lower opportunity cost producer of

Correct Answer
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The national defense argument for trade protectionism holds that

Correct Answer
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Exhibit 33-7 -Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X) . Americans purchase units of good X from U.S. producers and import _ units of good X from abroad.

Correct Answer
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Correct Answer
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Tariffs raise the price of imported goods, but quotas rarely do.

Correct Answer
verified

Exhibit 33-7 -Refer to Exhibit 33-7. The world price of good X is $15. If imports of good X are legally limited to 30 units, the price of X in the United States would be

Correct Answer
verified

Correct Answer
verified

The national defense argument for trade restriction holds that

Correct Answer
verified

A French firm sells its good at a lower price in England than in France. It follows that the French firm is necessarily

Correct Answer
verified

With a quota, the is greater than the .

Correct Answer
verified

The situation where a country can produce a good at a lower opportunity cost than another country is called a(n) __________ advantage.

Correct Answer
verified

The act of selling goods abroad at a price below their cost and below the price charged in the domestic market is called

Correct Answer
verified

Exhibit 33-8 -Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports) . The government collects tariff revenues on sugar imports in the amount of __________ million.

Correct Answer
verified

Describe who benefits and who loses from tariffs and from quotas. What is the major difference between the effects of a quota and the effects of a tariff?

Correct Answer
verified
Tariffs and quotas both result in a decr...
View Answer

Tariffs and quotas are often imposed when a government is more responsive to interests, and the benefits of those trade restrictions are often .

Correct Answer
verified

Countries tend to specialize in the production of goods in which they have a comparative advantage because

Correct Answer
verified

If, at the world price, domestic producers are producing and selling 100 units of a good, then at the world price plus tariff it follows that

Correct Answer
verified

A quota raises the price of the product on which the quota has been placed, decreases consumers' surplus, increases producers' surplus, and generates tariff revenue for the government.

Correct Answer
verified

Exhibit 33-7 -Refer to Exhibit 33-7. The world price of good X is $15. Under a policy of free trade, the U.S. production of good X would be

Correct Answer
verified

Exam 33: International Trade

Which of the following statements is false?

Correct AnswerverifiedShow Answer

Exhibit 33-1 ​ -Refer to Exhibit 33-1. Country A is the lower opportunity cost producer of

Correct AnswerverifiedShow Answer

The national defense argument for trade protectionism holds that

Correct AnswerverifiedShow Answer

Exhibit 33-7 ​ -Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X) . Americans purchase ______ units of good X from U.S. producers and import _______ units of good X from abroad.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Tariffs raise the price of imported goods, but quotas rarely do.

Correct AnswerverifiedShow Answer

Exhibit 33-7 ​ -Refer to Exhibit 33-7. The world price of good X is $15. If imports of good X are legally limited to 30 units, the price of X in the United States would be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The national defense argument for trade restriction holds that

Correct AnswerverifiedShow Answer

A French firm sells its good at a lower price in England than in France. It follows that the French firm is necessarily

Correct AnswerverifiedShow Answer

With a quota, the __________ is greater than the __________.

Correct AnswerverifiedShow Answer

The situation where a country can produce a good at a lower opportunity cost than another country is called a(n) __________ advantage.

Correct AnswerverifiedShow Answer

The act of selling goods abroad at a price below their cost and below the price charged in the domestic market is called

Correct AnswerverifiedShow Answer

Exhibit 33-8 ​ -Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports) . The government collects tariff revenues on sugar imports in the amount of __________ million.

Correct AnswerverifiedShow Answer

Describe who benefits and who loses from tariffs and from quotas. What is the major difference between the effects of a quota and the effects of a tariff?

Correct AnswerverifiedTariffs and quotas both result in a decr...View AnswerShow Answer

Tariffs and quotas are often imposed when a government is more responsive to __________ interests, and the benefits of those trade restrictions are often __________.

Correct AnswerverifiedShow Answer

Countries tend to specialize in the production of goods in which they have a comparative advantage because

Correct AnswerverifiedShow Answer

If, at the world price, domestic producers are producing and selling 100 units of a good, then at the world price plus tariff it follows that

Correct AnswerverifiedShow Answer

A quota raises the price of the product on which the quota has been placed, decreases consumers' surplus, increases producers' surplus, and generates tariff revenue for the government.

Correct AnswerverifiedShow Answer

Exhibit 33-7 ​ -Refer to Exhibit 33-7. The world price of good X is $15. Under a policy of free trade, the U.S. production of good X would be

Correct AnswerverifiedShow Answer

Correct Answer
verified

Exhibit 33-1 -Refer to Exhibit 33-1. Country A is the lower opportunity cost producer of

Correct Answer
verified

Correct Answer
verified

Exhibit 33-7 -Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X) . Americans purchase units of good X from U.S. producers and import _ units of good X from abroad.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exhibit 33-7 -Refer to Exhibit 33-7. The world price of good X is $15. If imports of good X are legally limited to 30 units, the price of X in the United States would be

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

With a quota, the is greater than the .

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Exhibit 33-8 -Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports) . The government collects tariff revenues on sugar imports in the amount of __________ million.

Correct Answer
verified

Correct Answer
verified
Tariffs and quotas both result in a decr...
View Answer

Tariffs and quotas are often imposed when a government is more responsive to interests, and the benefits of those trade restrictions are often .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exhibit 33-7 -Refer to Exhibit 33-7. The world price of good X is $15. Under a policy of free trade, the U.S. production of good X would be

Correct Answer
verified