Question 1

U.S.auto workers sometimes experience structural unemployment because of the popularity of foreign cars.Which argument is a labor union most likely to present to Congress when it lobbies for trade restrictions?

Accepted Answer

A)   national defense argument
B)   infant industry argument
C)   antidumping argument
D)   loss of domestic jobs argument
E)   declining industry argument

Question 2

Which of the following is not true regarding the argument for protection as a way of maintaining jobs and wage levels?

Accepted Answer

A)   Wages may be only a small fraction of total production costs.
B)   High wages do not necessarily imply high labor costs when productivity is taken into account.
C)   U.S.workers are among the most productive in the world partly because they are well educated and trained compared to other countries.
D)   U.S.workers are highly productive partly because they are provided with abundant supplies of machines and physical capital.
E)   It is not possible that the U.S.wages,even when supported by high U.S.output per worker,can render U.S.products competitive with low-wage countries.

Question 3

Exhibit 19-7 
-If the country in Exhibit 19-7 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,the decrease in consumer surplus can be represented by area

Accepted Answer

A)   a
B)   c + d
C)   c + d + e
D)   b + c + d + e
E)   a + b + c + d + e

Question 4

Tina Makumbi imports sesame oil from Ethiopia and sells to a market that has a downward sloping demand curve.The demand curve indicates that some consumers are willing to pay $1.50 or more per pound for the first few pounds,but every consumer gets to buy at the market clearing price of $0.50 per pound.The difference between the most that consumers would pay and the actual amount they do pay is called

Accepted Answer

A)   exporter surplus
B)   trade balance
C)   producer surplus
D)   consumer equilibrium
E)   consumer surplus

Question 5

U.S.consumers would be better off if they bought only U.S.-produced goods.

Accepted Answer

A) True 
 B)False

Question 6

International trade does all the following except

Accepted Answer

A)   allow a country to specialize in producing certain goods and services
B)   reduce world output
C)   allow a country to move to a higher consumption possibilities frontier
D)   allow a country's consumption possibilities frontier to lie outside its production possibilities frontier
E)   increase world output

Question 7

Which of the following is true?

Accepted Answer

A)   International trade makes it possible for a country's consumption possibilities to exceed its production possibilities.
B)   International trade requires that a country's production possibilities exceed its consumption possibilities.
C)   A country's production possibilities always equal its consumption possibilities.
D)   A country's consumption possibilities can never equal its production possibilities because of leakages in the system.
E)   As long as there is full employment of resources,a country's production possibilities will exceed its consumption possibilities even with trade.

Question 8

It is possible for one country to have a comparative advantage in the production of all products.

Accepted Answer

A) True 
 B)False

Question 9

Mutually beneficial trade will occur between two countries for all of the following reasons except one.Which is the exception?

Accepted Answer

A)   The opportunity costs of producing two goods differs between the two trading partners.
B)   One country is more productive than the other.
C)   One country is more efficient than the other.
D)   One country has an absolute advantage over the other.
E)   Each country has a comparative advantage in producing some good.

Question 10

The international treaty established to negotiate lower trade restrictions is known as the

Accepted Answer

A)   World Bank Act
B)   General Agreement on Tariffs and Trade (GATT) 
C)   International Association for Free Trade (IAFT) 
D)   Countries United for Free Trade (CUFT) 
E)   International Development Fund

Question 11

For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning production possibilities curves in both countries?

Accepted Answer

A)   The slopes of the countries' production possibilities frontiers cannot be determined unless the number of workers in each country is known.
B)   The countries' production possibilities frontiers have the usual bowed-out shape.
C)   On a graph with cheese on the vertical axis,the slope of Germany's production possibilities frontier is everywhere equal to 1/100.
D)   On a graph with cheese on the vertical axis,the slope of Germany's production possibilities frontier is steeper than Denmark's.
E)   On a graph with cheese on the vertical axis,the slope of Germany's production possibilities frontier is everywhere equal to negative 1/100.

Question 12

The losers when the United States institutes trade restrictions include

Accepted Answer

A)   U.S.consumers of imported goods,U.S.producers who use imported intermediate goods,and,if other countries retaliate,U.S.exporters
B)   U.S.producers of goods that compete with imported goods only
C)   U.S.consumers of imported goods and U.S.producers of goods that compete with imported goods
D)   all U.S.producers of all goods and U.S.exporters
E)   only U.S.exporters

Question 13

International trade is most likely to occur whenever

Accepted Answer

A)   one of the trading nations is self-sufficient
B)   all of the trading nations are self-sufficient
C)   one of the trading nations gains from trade
D)   each of the trading nations gains from trade
E)   labor is cheaper abroad

Question 14

The establishment of GATT resulted in

Accepted Answer

A)   lower tariff rates
B)   increased tariff rates
C)   decreases in total world trade
D)   increased protectionism
E)   a rise in the price of imports

Question 15

In New Zealand one worker can produce 40 walking sticks or 10 boomerangs each hour.What is the opportunity cost of producing one walking stick?

Accepted Answer

A)   40 boomerangs
B)   10 boomerangs
C)   4 boomerangs
D)   1/4 of a boomerang
E)   1/2 worker

Question 16

When it comes to basic commodities,the United States is a net exporter of oil and metals and a net importer of farm crops.

Accepted Answer

A) True 
 B)False

Question 17

For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning comparative advantage between the two countries?

Accepted Answer

A)   Denmark has the comparative advantage in watches and cheese.
B)   Germany has the comparative advantage in watches and cheese.
C)   Germany has the comparative advantage in watches.
D)   Denmark has the comparative advantage in watches.
E)   Denmark has the comparative advantage in cheese.

Question 18

As a result of international trade,

Accepted Answer

A)   the gain to producers in the importing country exceeds the loss to consumers in the importing country
B)   the loss to producers in the importing country is less than the gain to consumers in the importing country caused by a decrease in price
C)   the loss to producers in the importing country exceeds the gain to consumers in the importing country caused by an increase in price
D)   the loss to producers in the importing country is equal to the gain to consumers in the importing country because price increases and equilibrium quantity decreases
E)   the loss to producers in the importing country is equal to the gain to consumers in the importing country because price decreases and equilibrium quantity increases

Question 19

Exhibit 19-5 
-Suppose that the world price in Exhibit 19-5 is $2.00 per unit.What is the smallest import quota that would not affect the level of imports in this country?

Accepted Answer

A)   $3.00
B)   $2.00
C)   50 units per month
D)   100 units per month
E)   150 units per month

Question 20

A nation's consumption possibilities frontier is

Accepted Answer

A)   always the same as its production possibilities frontier
B)   never the same as its production possibilities frontier
C)   the same as its production possibilities frontier only if there is advantageous trade
D)   the same as its production possibilities frontier only if there is no international trade
E)   usually lower than its production possibilities frontier

Exam 18: International Trade

When it comes to basic commodities,the United States is a net exporter of oil and metals and a net importer of farm crops.

Correct Answer
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As a result of international trade,

Correct Answer
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U.S.auto workers sometimes experience structural unemployment because of the popularity of foreign cars.Which argument is a labor union most likely to present to Congress when it lobbies for trade restrictions?

Correct Answer
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International trade does all the following except

Correct Answer
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Which of the following is not true regarding the argument for protection as a way of maintaining jobs and wage levels?

Correct Answer
verified

Exhibit 19-5 -Suppose that the world price in Exhibit 19-5 is $2.00 per unit.What is the smallest import quota that would not affect the level of imports in this country?

Correct Answer
verified

The international treaty established to negotiate lower trade restrictions is known as the

Correct Answer
verified

Exhibit 19-7 -If the country in Exhibit 19-7 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,the decrease in consumer surplus can be represented by area

Correct Answer
verified

Which of the following is true?

Correct Answer
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International trade is most likely to occur whenever

Correct Answer
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A nation's consumption possibilities frontier is

Correct Answer
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It is possible for one country to have a comparative advantage in the production of all products.

Correct Answer
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The establishment of GATT resulted in

Correct Answer
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In New Zealand one worker can produce 40 walking sticks or 10 boomerangs each hour.What is the opportunity cost of producing one walking stick?

Correct Answer
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For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning production possibilities curves in both countries?

Correct Answer
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For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning comparative advantage between the two countries?

Correct Answer
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The losers when the United States institutes trade restrictions include

Correct Answer
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Correct Answer
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Mutually beneficial trade will occur between two countries for all of the following reasons except one.Which is the exception?

Correct Answer
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U.S.consumers would be better off if they bought only U.S.-produced goods.

Correct Answer
verified

Exam 18: International Trade

When it comes to basic commodities,the United States is a net exporter of oil and metals and a net importer of farm crops.

Correct AnswerverifiedShow Answer

As a result of international trade,

Correct AnswerverifiedShow Answer

U.S.auto workers sometimes experience structural unemployment because of the popularity of foreign cars.Which argument is a labor union most likely to present to Congress when it lobbies for trade restrictions?

Correct AnswerverifiedShow Answer

International trade does all the following except

Correct AnswerverifiedShow Answer

Which of the following is not true regarding the argument for protection as a way of maintaining jobs and wage levels?

Correct AnswerverifiedShow Answer

Exhibit 19-5 -Suppose that the world price in Exhibit 19-5 is $2.00 per unit.What is the smallest import quota that would not affect the level of imports in this country?

Correct AnswerverifiedShow Answer

The international treaty established to negotiate lower trade restrictions is known as the

Correct AnswerverifiedShow Answer

Exhibit 19-7 -If the country in Exhibit 19-7 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted,the decrease in consumer surplus can be represented by area

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

International trade is most likely to occur whenever

Correct AnswerverifiedShow Answer

A nation's consumption possibilities frontier is

Correct AnswerverifiedShow Answer

It is possible for one country to have a comparative advantage in the production of all products.

Correct AnswerverifiedShow Answer

The establishment of GATT resulted in

Correct AnswerverifiedShow Answer

In New Zealand one worker can produce 40 walking sticks or 10 boomerangs each hour.What is the opportunity cost of producing one walking stick?

Correct AnswerverifiedShow Answer

For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning production possibilities curves in both countries?

Correct AnswerverifiedShow Answer

For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning comparative advantage between the two countries?

Correct AnswerverifiedShow Answer

The losers when the United States institutes trade restrictions include

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Mutually beneficial trade will occur between two countries for all of the following reasons except one.Which is the exception?

Correct AnswerverifiedShow Answer

U.S.consumers would be better off if they bought only U.S.-produced goods.

Correct AnswerverifiedShow Answer

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