Question 1

Comparative advantage is the ability to produce a good at a lower opportunity cost than others.

Accepted Answer

A) True 
 B)False

Question 2

It is argued that certain industries should be protected from foreign competition because they are needed to secure the United States from foreign aggression.This argument is called the __________ argument.

Accepted Answer

A)  saving domestic-jobs
B)  low foreign wages
C)  foreign export subsidies
D)  national defense

Question 3

Exhibit 34-8 
-Refer to Exhibit 34-8.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 removal of the $100 per ton tariff would cause a(n) __________ in imports of __________ million tons.

Accepted Answer

A)  increase;5
B)  increase;10
C)  increase;15
D)  decrease;5
E)  decrease;10

Question 4

The effect of a tariff is

Accepted Answer

A)  an increase in consumers' surplus.
B)  a decrease in producers' surplus.
C)  an increase in tariff revenues for government.
D)  b and c
E)  all of the above

Question 5

Arguments made against free trade include all of the following except

Accepted Answer

A)  national defense considerations justify producing certain goods domestically whether the country has a comparative advantage in their production or not.
B)  infant industries should be protected from free trade so that they may have time to develop and compete on an even basis with older,more established foreign industries.
C)  dumping is an unfair trade practice that puts domestic producers of substitute goods at a disadvantage that they should be protected against.
D)  free trade is inflationary and should be restricted in the domestic interest.
E)  if foreign governments subsidize their exports,foreign firms that export are given an unfair advantage that domestic producers should be protected against.

Question 6

Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States.Smith is

Accepted Answer

A)  advancing the foreign export subsidies argument for protectionism.
B)  making the mistake of believing that high wages mean high costs.
C)  advancing the antidumping argument for protectionism.
D)  making the mistake of believing that productivity is higher in foreign countries than in the United States.
E)  none of the above

Question 7

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 8

The answer is: "A tax on imports." What is the question?

Accepted Answer

A)  What is comparative advantage?
B)  What is a quota?
C)  What is a tariff?
D)  What reduces consumers' surplus?
E)  c and d

Question 9

Exhibit 34-11 W is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed.Tariff revenues equal the area A) DBCG. B) EBCF. C) CFG. D) BCGE. E) DBCF." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 34-11.PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed.Tariff revenues equal the area

Accepted Answer

A)  DBCG.
B)  EBCF.
C)  CFG.
D)  BCGE.
E)  DBCF.

Question 10

Exhibit 34-8 
-Refer to Exhibit 34-8.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) .Consumers' surplus is equal to the area __________ while producers' surplus is equal to the area __________.

Accepted Answer

A)  A + B + C + D + E + F;G + H + I + J + K
B)  A + C + G;B + D + E + F
C)  A + B;C + G
D)  A + C;G
E)  A + C;B + D + E + F

Question 11

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.

Question 12

Which of the following is not an argument for trade restrictions?

Accepted Answer

A)  the national defense argument
B)  the infant industry argument
C)  the comparative advantage argument
D)  the antidumping argument

Question 13

The effects of a quota include:

Accepted Answer

A)  decreasing consumers' surplus.
B)  increasing total revenue for the importers who sell the allowed number of imported units.
C)  increasing producers' surplus.
D)  b and c
E)  a,b,and c

Question 14

List and describe three arguments that help to explain why nations sometimes restrict trade.Does everyone agree with these arguments?

Accepted Answer

The arguments that have been given to su...

Question 15

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

Accepted Answer

A)  priming.
B)  coping.
C)  invading.
D)  dumping.

Question 16

The national defense argument has been used in the past to justify trade restrictions by firms in the peanut industry and the pottery industry.

Accepted Answer

A) True 
 B)False

Question 17

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 18

"New industries need to be protected or they won't have the opportunity to grow up." This is a statement of the __________ argument for trade restrictions.

Accepted Answer

A)  national-defense
B)  infant-industry
C)  anti-dumping
D)  tariff
E)  none of the above

Question 19

Exhibit 34-6 
-Refer to Exhibit 34-6.The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country B.

Accepted Answer

A)  15
B)  10
C)  5
D)  1

Question 20

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

Exam 21: Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

Which of the following is not an argument for trade restrictions?

Correct AnswerverifiedShow Answer

List and describe three arguments that help to explain why nations sometimes restrict trade.Does everyone agree with these arguments?

Correct AnswerverifiedThe arguments that have been given to su...View AnswerShow Answer

The national defense argument for trade protectionism holds that

Correct AnswerverifiedShow Answer

Exhibit 34-8 -Refer to Exhibit 34-8.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) .Consumers' surplus is equal to the area __________ while producers' surplus is equal to the area __________.

Correct AnswerverifiedShow Answer

The national defense argument for trade restriction holds that

Correct AnswerverifiedShow Answer

Exhibit 34-6 -Refer to Exhibit 34-6.The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country B.

Correct AnswerverifiedShow Answer

"New industries need to be protected or they won't have the opportunity to grow up." This is a statement of the __________ argument for trade restrictions.

Correct AnswerverifiedShow Answer

Comparative advantage is the ability to produce a good at a lower opportunity cost than others.

Correct AnswerverifiedShow Answer

The national defense argument has been used in the past to justify trade restrictions by firms in the peanut industry and the pottery industry.

Correct AnswerverifiedShow Answer

Arguments made against free trade include all of the following except

Correct AnswerverifiedShow Answer

It is argued that certain industries should be protected from foreign competition because they are needed to secure the United States from foreign aggression.This argument is called the __________ argument.

Correct AnswerverifiedShow Answer

Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States.Smith is

Correct AnswerverifiedShow Answer

Exhibit 34-8 -Refer to Exhibit 34-8.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 removal of the $100 per ton tariff would cause a(n) __________ in imports of __________ million tons.

Correct AnswerverifiedShow Answer

The effect of a tariff is

Correct AnswerverifiedShow Answer

The answer is: "A tax on imports." What is the question?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The effects of a quota include:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Exhibit 34-11 -Refer to Exhibit 34-11.PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed.Tariff revenues equal the area

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The arguments that have been given to su...
View Answer

Correct Answer
verified

Exhibit 34-8 -Refer to Exhibit 34-8.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) .Consumers' surplus is equal to the area while producers' surplus is equal to the area .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exhibit 34-8 -Refer to Exhibit 34-8.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 removal of the $100 per ton tariff would cause a(n) in imports of million tons.

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
verified

Correct Answer
verified

Exhibit 34-11 -Refer to Exhibit 34-11.P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed.Tariff revenues equal the area

Correct Answer
verified