Question 1

Import duties ranging from 28 percent to 113 percent on Chinese frozen and canned shrimp are an example of a policy that:

Accepted Answer

A)  protects American fisheries from overfishing.
B)  uses regulations and taxes to protect American consumers.
C)  protects domestic producers from foreign producers.
D)  protect is American consumers from foreign producers.

Question 2

In strategic trade bargaining it is sometimes reasonable to be unreasonable.

Accepted Answer

A) True 
 B)False

Question 3

Refer to the graph shown for a small country that is a price taker internationally.  Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit.If government imposes a tariff in the amount of $2 per unit, it will collect revenue in the amount of:

Accepted Answer

A)  $0.
B)  $2,400.
C)  $5,000.
D)  $10,000.

Question 4

Economists generally agree that:

Accepted Answer

A)  trade restrictions will increase the welfare of a large country even if other countries retaliate.
B)  trade between two nations generally benefits one at the expense of the other.
C)  infant industry protection, although justified in theory, often becomes permanent because infant industries fail to grow up.
D)  trade embargoes are not an effective way of achieving international political objectives.

Question 5

Tariffs are taxes that governments place on internationally traded goods.

Accepted Answer

A) True 
 B)False

Question 6

Transshipments, which are used commonly in international trade, tend to:

Accepted Answer

A)  undermine the effectiveness of an embargo.
B)  strengthen the national security argument for trade restrictions.
C)  increase the effectiveness of trade restrictions.
D)  reduce the volume of world trade.

Question 7

Strategic bargaining:

Accepted Answer

A)  always reduces the number of trade restrictions.
B)  always increases the number of trade restrictions.
C)  may increase the number of trade restrictions if it is successful.
D)  may reduce the number of trade restrictions if it is successful.

Question 8

The United States does not allow U.S.citizens to trade with Iraq.This is an example of:

Accepted Answer

A)  a quota.
B)  a tariff.
C)  an embargo.
D)  a regulatory trade restriction.

Question 9

Refer to the graph shown for a small country that is a price taker internationally.  Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit.To have the same effect on imports as a $2 per-unit tariff, the government would need to set an import quota of:

Accepted Answer

A)  1,200 units.
B)  1,300 units.
C)  2,500 units.
D)  5,000 units.

Question 10

A country imposing trade restrictions can benefit only if other countries also impose trade restrictions.

Accepted Answer

A) True 
 B)False

Question 11

Countries restrict international trade for all of the following reasons except:

Accepted Answer

A)  international trade probably will lead to the displacement of workers.
B)  the benefits of trade usually are limited to small groups, whereas the costs are widely scattered across the population.
C)  it is sometimes difficult to decide where a country's comparative advantage lies when "learning by doing" effects are important.
D)  economies of scale can mean that a country is able to develop a comparative advantage by protecting infant industries. B

Question 12

If the United States were to impose 100 percent tariffs on imports of Chinese shrimp, what would most economists conclude?

Accepted Answer

A)  This decision can be justified by using the infant-industry argument.
B)  This decision can be justified by using the national defense argument.
C)  This policy is a way to keep foreign producers from being exploited by Americans.
D)  This decision is not justified in terms of economic well-being but may make sense for political reasons.

Question 13

The outsourcing of service jobs such as those in call centers has become a political issue.Do economists see any benefit to outsourcing?

Accepted Answer

A)  No; it simply shifts jobs overseas.
B)  No; it only benefits foreign economies.
C)  Yes; it tends to reduce prices to American companies and consumers.
D)  Yes; it tends to raise the value of the dollar.

Question 14

According to most economists, outsourcing service jobs:

Accepted Answer

A)  helps both countries in the long run.
B)  hurts both countries because the United States loses jobs and the employees of the call center are exploited with low wages.
C)  helps the United States but hurts the country with the low-cost labor.
D)  helps the country getting the jobs but hurts the United States

Question 15

Analysts have suggested that the cost of bras is related to trade restrictions on textile imports.What does the price of bras have to do with tariffs and quotas?

Accepted Answer

A)  Trade restrictions protect consumers by keeping the price of bras low.
B)  Trade restrictions in the form of tariffs keep prices of bras high, but replacing them with quotas will result in lower prices.
C)  Trade restrictions keep the prices of bras high, and ending them will result in lower prices.
D)  Trade restrictions do not influence the price of bras; the price is determined by domestic technology and the overall inflation rate.

Question 16

World trade declined in the 1930s.Which of the following is the best explanation of that decline?

Accepted Answer

A)  World income shrank, and trade restrictions increased.
B)  World income shrank, but there were few changes in trade restrictions.
C)  Trade restrictions increased, but there was little change in world income.
D)  The incomes of most nations increased, allowing them to become more self-sufficient. A

Question 17

Threats to put tariffs on a nation in an attempt to get that nation to reduce its restrictions on trade are called:

Accepted Answer

A)  strategic trade policies.
B)  trade adjustment assistance programs.
C)  learning by doing.
D)  inertia and cachet.

Question 18

Quotas on imported automobiles cost jobs in the U.S.automobile industry but lower auto prices for domestic consumers.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not an argument in favor of protecting domestic industries from foreign competition?

Accepted Answer

A)  National security.
B)  Reducing structural unemployment.
C)  Protection against subsidized foreign producers.
D)  Making domestic firms more efficient.

Question 20

The WTO authorized several countries to impose about $150 million in trade sanctions against the United States in retaliation for a U.S.import law that the WTO ruled to be illegal.The organization that issued this ruling against the United States is known as the:

Accepted Answer

A)  Wage Tariff Objective.
B)  World Trade Organization.
C)  Wealth Technology Order.
D)  Welfare Tax Order. B

Exam 10: International Trade Policy

Import duties ranging from 28 percent to 113 percent on Chinese frozen and canned shrimp are an example of a policy that:

Correct AnswerverifiedShow Answer

In strategic trade bargaining it is sometimes reasonable to be unreasonable.

Correct AnswerverifiedShow Answer

Refer to the graph shown for a small country that is a price taker internationally. Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit.If government imposes a tariff in the amount of $2 per unit, it will collect revenue in the amount of:

Correct AnswerverifiedShow Answer

Economists generally agree that:

Correct AnswerverifiedShow Answer

Tariffs are taxes that governments place on internationally traded goods.

Correct AnswerverifiedShow Answer

Transshipments, which are used commonly in international trade, tend to:

Correct AnswerverifiedShow Answer

Strategic bargaining:

Correct AnswerverifiedShow Answer

The United States does not allow U.S.citizens to trade with Iraq.This is an example of:

Correct AnswerverifiedShow Answer

Refer to the graph shown for a small country that is a price taker internationally. Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit.To have the same effect on imports as a $2 per-unit tariff, the government would need to set an import quota of:

Correct AnswerverifiedShow Answer

A country imposing trade restrictions can benefit only if other countries also impose trade restrictions.

Correct AnswerverifiedShow Answer

Countries restrict international trade for all of the following reasons except:

Correct AnswerverifiedB

If the United States were to impose 100 percent tariffs on imports of Chinese shrimp, what would most economists conclude?

Correct AnswerverifiedShow Answer

The outsourcing of service jobs such as those in call centers has become a political issue.Do economists see any benefit to outsourcing?

Correct AnswerverifiedShow Answer

According to most economists, outsourcing service jobs:

Correct AnswerverifiedShow Answer

Analysts have suggested that the cost of bras is related to trade restrictions on textile imports.What does the price of bras have to do with tariffs and quotas?

Correct AnswerverifiedShow Answer

World trade declined in the 1930s.Which of the following is the best explanation of that decline?

Correct AnswerverifiedA

Threats to put tariffs on a nation in an attempt to get that nation to reduce its restrictions on trade are called:

Correct AnswerverifiedShow Answer

Quotas on imported automobiles cost jobs in the U.S.automobile industry but lower auto prices for domestic consumers.

Correct AnswerverifiedShow Answer

Which of the following is not an argument in favor of protecting domestic industries from foreign competition?

Correct AnswerverifiedShow Answer

The WTO authorized several countries to impose about $150 million in trade sanctions against the United States in retaliation for a U.S.import law that the WTO ruled to be illegal.The organization that issued this ruling against the United States is known as the:

Correct AnswerverifiedB

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

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B