Question 1

The fundamental force that drives international trade is:

Accepted Answer

A)   Comparative advantage
B)   Absolute advantage
C)   Countries' desire to increase their trade surplus
D)   Cheap labor in countries like China or India

Question 2

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.Colombia will immediately eliminate tariffs on wheat,barley,peanuts,and many other products in which Columbia does not have a comparative advantage.This policy means that the price of peanuts in Columbia will become

Accepted Answer

A)   equal to the free trade price
B)   lower than the free trade price
C)   higher than the price when a tariff was in place
D)   higher than the free trade price

Question 3

Which of the following are TRUE regarding the argument that trade barriers protect U.S.workers from 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)   I only
B)   II only
C)   I and II
D)   Neither I nor II is correct.

Question 4

A tariff ________ the quantity of the good imported and ________ the domestic price of the imported good.

Accepted Answer

A)   decreases; decreases
B)   decreases; increases
C)   increases; lowers
D)   does not change; increases

Question 5

Which of the following statements concerning tariffs is NOT true?

Accepted Answer

A)   A tariff results in a loss for domestic consumers of the good.
B)   A tariff creates revenue for the government.
C)   A tariff decreases international trade.
D)   A tariff leaves the price of imports unchanged.

Question 6

If a tariff is imposed,the price paid by domestic consumers will ________ and the amount imported will ________.

Accepted Answer

A)   increase; decrease
B)   increase; not change
C)   not change; increase
D)   increase; increase

Question 7

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________.

Accepted Answer

A)   a few; little
B)   a few; lot
C)   many; little
D)   many; lot

Question 8

Based on the table below,at what world price would the country export?
  Price  QDemanded  QSupplied 210070495756908088585108090127595\begin{array} { | l | l | l | } \hline 	ext { Price } & 	ext { QDemanded } & 	ext { QSupplied } \\hline 2 & 100 & 70 \\hline 4 & 95 & 75 \\hline 6 & 90 & 80 \\hline 8 & 85 & 85 \\hline 10 & 80 & 90 \\hline 12 & 75 & 95 \\hline\end{array} Price 24681012​ QDemanded 1009590858075​ QSupplied 707580859095​​

Accepted Answer

A)   all prices above $8
B)   at only $8
C)   all prices below $8
D)   it is impossible to say

Question 9

Who benefits from an import quota on a good?

Accepted Answer

A)   Domestic consumers of the good
B)   Foreign governments
C)   Domestic producers of the good
D)   Foreign producers of the good

Question 10

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)   equal to
C)   greater than
D)   not comparable to

Question 11

The fundamental force that generates international trade is

Accepted Answer

A)   absolute advantage.
B)   comparative advantage.
C)   law of diminishing returns.
D)   law of increasing costs.

Question 12

A tariff hurts

Accepted Answer

A)   the government by decreasing its revenue.
B)   domestic producers who can't compete with cheaper imports.
C)   consumers who will pay more for the imported good.
D)   All of the above answers are correct.

Question 13

An import quota specifies the

Accepted Answer

A)   highest price that can be charged for an imported good.
B)   per unit tax that must be paid on an imported good.
C)   maximum quantity of a good that may be imported during a specified time period.
D)   minimum quantity of a good that must be exported during a specified time period.

Question 14

How does a quota affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

Accepted Answer

A quota raises the price of the good bec...

Question 15

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

Question 16

Trade barriers are politically popular because

Accepted Answer

A)   they are a way to avoid trade wars and still protect domestic producers.
B)   people recognize their use as a negotiating tool in international relations.
C)   their benefits are widespread, while their costs are highly concentrated.
D)   their benefits are concentrated, while their costs are widespread.

Question 17

The United States imports cars from Japan.If the United States imposes a tariff on cars imported from Japan,American

Accepted Answer

A)   consumers will lose and Japanese producers will gain.
B)   tariff revenue will equal the loss inflicted on American consumers.
C)   consumers will lose and American producers will gain.
D)   car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers.

Question 18

Japan was accused of dumping in the steel industry within the United States when it

Accepted Answer

A)   negotiated an illegal agreement to raise prices with U.S. steel industries.
B)   prohibited imports of U.S. steel into Japan.
C)   sold steel in the United States at a price below its cost of production.
D)   negotiated a illegal trade deal with Canada.

Question 19

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

Accepted Answer

A) True 
 B)False

Question 20

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba...

Exam 15: International Trade Policy

A tariff hurts

Correct Answer
verified

The United States imports cars from Japan.If the United States imposes a tariff on cars imported from Japan,American

Correct Answer
verified

Which of the following statements concerning tariffs is NOT true?

Correct Answer
verified

Correct Answer
verified

If a tariff is imposed,the price paid by domestic consumers will and the amount imported will .

Correct Answer
verified

Correct Answer
verified

Trade barriers are politically popular because

Correct Answer
verified

Japan was accused of dumping in the steel industry within the United States when it

Correct Answer
verified

A tariff the quantity of the good imported and the domestic price of the imported good.

Correct Answer
verified

The fundamental force that drives international trade is:

Correct Answer
verified

How does a quota affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

Correct Answer
verified
A quota raises the price of the good bec...
View Answer

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Correct Answer
verified
Governments use tariffs and nontariff ba...
View Answer

The fundamental force that generates international trade is

Correct Answer
verified

Who benefits from an import quota on a good?

Correct Answer
verified

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
verified

An import quota specifies the

Correct Answer
verified

Which of the following are TRUE regarding the argument that trade barriers protect U.S.workers from 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

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

Correct Answer
verified

Usually the imposition of trade barriers affecting a particular good benefits people domestically,each of whom gains a .

Correct Answer
verified

Correct Answer
verified

Exam 15: International Trade Policy

A tariff hurts

Correct AnswerverifiedShow Answer

The United States imports cars from Japan.If the United States imposes a tariff on cars imported from Japan,American

Correct AnswerverifiedShow Answer

Which of the following statements concerning tariffs is NOT true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a tariff is imposed,the price paid by domestic consumers will ________ and the amount imported will ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Trade barriers are politically popular because

Correct AnswerverifiedShow Answer

Japan was accused of dumping in the steel industry within the United States when it

Correct AnswerverifiedShow Answer

A tariff ________ the quantity of the good imported and ________ the domestic price of the imported good.

Correct AnswerverifiedShow Answer

The fundamental force that drives international trade is:

Correct AnswerverifiedShow Answer

How does a quota affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

Correct AnswerverifiedA quota raises the price of the good bec...View AnswerShow Answer

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Correct AnswerverifiedGovernments use tariffs and nontariff ba...View AnswerShow Answer

The fundamental force that generates international trade is

Correct AnswerverifiedShow Answer

Who benefits from an import quota on a good?

Correct AnswerverifiedShow Answer

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

An import quota specifies the

Correct AnswerverifiedShow Answer

Which of the following are TRUE regarding the argument that trade barriers protect U.S.workers from 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

Dumping occurs when a foreign firm sells its exports at a lower price than it costs to produce them.

Correct AnswerverifiedShow Answer

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If a tariff is imposed,the price paid by domestic consumers will and the amount imported will .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A tariff the quantity of the good imported and the domestic price of the imported good.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A quota raises the price of the good bec...
View Answer

Correct Answer
verified
Governments use tariffs and nontariff ba...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Usually the imposition of trade barriers affecting a particular good benefits people domestically,each of whom gains a .

Correct Answer
verified

Correct Answer
verified