Question 1

The figure above shows the U.S.market for T-shirts, where SUS is the domestic supply curve and DUS is the domestic demand curve.The world price of a T-shirt is $5. The U.S.government imposes a $2 per unit tariff on imported T-shirts.
-The figure above shows that as a result of the tariff, the quantity of T-shirts produced in the United States ________, and the quantity of T-shirts imported ________.

Accepted Answer

A)   increases by 15 million per year; decreases by 30 million per year
B)   increases by 15 million per year; increases by 15 million per year
C)   decreases by 15 million per year; decreases by 30 million per year
D)   decreases by 30 million per year; increases by 30 million per year
E)   does not change; decreases by 15 million per year

Question 2

How can a domestic producer determine whether or not it has a comparative advantage in the production of a good or service?

Accepted Answer

A)   It cannot.
B)   by comparing the price it receives to the prices of other domestic producers
C)   by comparing the price it receives to the world price
D)   by comparing the quantity it produces to the quantity produced in the world
E)   by comparing the total domestic quantity to the total world quantity

Question 3

When a nation exports a good or service in which it has a comparative advantage, employment in that industry

Accepted Answer

A)   decreases.
B)   stays the same.
C)   increases.
D)   might change, but more information about what else the country exports is needed to determine if employment increases, decreases, or does not change.
E)   might change, but more information about what the country imports is needed to determine if employment increases, decreases, or does not change.

Question 4

If the United States imposes a tariff on a good, then

Accepted Answer

A)   domestic consumption of the good decreases.
B)   foreign consumption of the good decreases.
C)   foreign production of the good increases.
D)   domestic production of the good decreases.
E)   the government makes less revenue than it would have gained if it imposed a quota.

Question 5

The typical relationship between a worker's productivity and the worker's wage rate is

Accepted Answer

A)   high productivity workers receive low wage rates.
B)   low productivity workers receive low wage rates.
C)   no link between productivity and wages earned.
D)   high productivity workers find that their jobs are often outsourced.
E)   that workers with high productivity need to have their high wages protected by tariffs.

Question 6

Which of the following is true?
i.Comparative advantage drives international trade.
ii.Compared to a no-trade situation, imports make domestic producers better off.
iii.Tariffs lower the domestic price of imported goods.

Accepted Answer

A)   Only i
B)   Only ii
C)   Only iii
D)   i and ii
E)   i and iii

Question 7

What is a major reason international trade is restricted?

Accepted Answer

A)   rent seeking
B)   to allow competition with cheap foreign labor
C)   to save jobs
D)   to prevent dumping
E)   to eliminate monopolies

Question 8

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, how many pounds of cherries would U.S.farmers produce?

Accepted Answer

A)   200,000 pounds
B)   400,000 pounds
C)   600,000 pounds
D)   800,000 pounds
E)   0 pounds

Question 9

Which of the following parties benefits from an import quota but not from a tariff?

Accepted Answer

A)   the domestic government
B)   domestic producers
C)   domestic consumers
D)   the person with the right to import the good
E)   the foreign government

Question 10

Which of the following is true?
i.When the world price of a good is lower than the price that balances domestic supply and demand, a country gains from exporting the good.
ii.Compared to a no-trade situation, imports make consumers better off.
iii.Quotas raise the domestic price of imported goods.

Accepted Answer

A)   Only i
B)   Only ii
C)   Only iii
D)   i and ii
E)   ii and iii

Question 11

When a good is imported, the domestic production of it ________ and the domestic consumption of it ________.

Accepted Answer

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

Question 12

When a tariff is imposed on a good, the ________ increases.

Accepted Answer

A)   domestic quantity purchased
B)   domestic quantity produced
C)   quantity imported
D)   quantity exported
E)   world price

Question 13

If the United States imposed a quota on the amount of salmon imported from Chile, the result would be ________ salmon prices in the United States and ________ in the quantity of salmon demanded in the United States.

Accepted Answer

A)   higher; an increase
B)   higher; a decrease
C)   lower; an increase
D)   lower; a decrease
E)   higher; no change

Question 14

The argument that jobs are lost to free trade is

Accepted Answer

A)   totally false because no jobs are lost to free trade.
B)   correct because jobs are lost but foreign countries are helped and we can afford losses.
C)   incorrect because no jobs are lost and new jobs are created by trade.
D)   correct because some jobs are lost but incorrect because new jobs also are created.
E)   true only when tariffs are imposed on the goods being imported.

Question 15

The United States imports t-shirts because

Accepted Answer

A)   it is a dangerous job to produce them.
B)   foreign nations have a lower opportunity cost of production.
C)   the United States has a lower opportunity cost of production.
D)   foreign economies have an absolute advantage in their production.
E)   the United States must import goods and services from other countries so that they can develop economically.

Question 16

-The above figure shows the U.S.market for wheat. When there no international trade, the U.S.price of wheat is ________ per ton and the U.S.equilibrium quantity is ________ tons.

Accepted Answer

A)   $14; 300,000
B)   $14; 500,000
C)   $16; 500,000
D)   $16; 300,000
E)   $16; 700,000

Question 17

Trade is often restricted because the

Accepted Answer

A)   total gain to all producers is larger than the total loss to all consumers.
B)   total gain to all producers is smaller than the total loss to all consumers.
C)   gain per producer is larger than the loss per consumer.
D)   gain per producer is less than the loss per consumer.
E)   gain per consumer is larger than the loss per producer.

Question 18

The fundamental force that drives trade between nations is

Accepted Answer

A)   the government.
B)   NAFTA.
C)   absolute advantage.
D)   comparative advantage.
E)   legal treaties.

Question 19

If the United States starts to import a good that had previously been produced in the United States, the market price of the good in the United States

Accepted Answer

A)   rises.
B)   falls.
C)   remains constant.
D)   either remains constant or rises, depending on how whether the supply of the good stays the same or increases.
E)   There is not enough information to answer the question because we need to know if the market price in the United States had been above or below the world market price before trade began.

Question 20

Most t-shirts bought by Americans are made in Asia.U.S.consumers of t-shirts buy these t-shirts because

Accepted Answer

A)   they pay a higher price for t-shirts made in Asia than they would for similar shirts made in the United States.
B)   they pay a lower price for t-shirts made in Asia than they would for similar shirts made in the United States.
C)   they must buy some goods or services produced in Asia.
D)   by so doing they are helping preserve U.S.jobs producing t-shirts.
E)   they know that the United States has a comparative advantage in wearing t-shirts.

Exam 18: International Trade Policy

Which of the following is true? i.When the world price of a good is lower than the price that balances domestic supply and demand, a country gains from exporting the good. ii.Compared to a no-trade situation, imports make consumers better off. iii.Quotas raise the domestic price of imported goods.

Correct Answer
verified

Most t-shirts bought by Americans are made in Asia.U.S.consumers of t-shirts buy these t-shirts because

Correct Answer
verified

What is a major reason international trade is restricted?

Correct Answer
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The typical relationship between a worker's productivity and the worker's wage rate is

Correct Answer
verified

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, how many pounds of cherries would U.S.farmers produce?

Correct Answer
verified

-The above figure shows the U.S.market for wheat. When there no international trade, the U.S.price of wheat is per ton and the U.S.equilibrium quantity is tons.

Correct Answer
verified

The argument that jobs are lost to free trade is

Correct Answer
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When a good is imported, the domestic production of it and the domestic consumption of it .

Correct Answer
verified

When a tariff is imposed on a good, the ________ increases.

Correct Answer
verified

When a nation exports a good or service in which it has a comparative advantage, employment in that industry

Correct Answer
verified

Correct Answer
verified

The United States imports t-shirts because

Correct Answer
verified

Trade is often restricted because the

Correct Answer
verified

Which of the following is true? i.Comparative advantage drives international trade. ii.Compared to a no-trade situation, imports make domestic producers better off. iii.Tariffs lower the domestic price of imported goods.

Correct Answer
verified

Which of the following parties benefits from an import quota but not from a tariff?

Correct Answer
verified

If the United States imposed a quota on the amount of salmon imported from Chile, the result would be salmon prices in the United States and in the quantity of salmon demanded in the United States.

Correct Answer
verified

If the United States imposes a tariff on a good, then

Correct Answer
verified

If the United States starts to import a good that had previously been produced in the United States, the market price of the good in the United States

Correct Answer
verified

How can a domestic producer determine whether or not it has a comparative advantage in the production of a good or service?

Correct Answer
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The fundamental force that drives trade between nations is

Correct Answer
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Exam 18: International Trade Policy

Which of the following is true? i.When the world price of a good is lower than the price that balances domestic supply and demand, a country gains from exporting the good. ii.Compared to a no-trade situation, imports make consumers better off. iii.Quotas raise the domestic price of imported goods.

Correct AnswerverifiedShow Answer

Most t-shirts bought by Americans are made in Asia.U.S.consumers of t-shirts buy these t-shirts because

Correct AnswerverifiedShow Answer

What is a major reason international trade is restricted?

Correct AnswerverifiedShow Answer

The typical relationship between a worker's productivity and the worker's wage rate is

Correct AnswerverifiedShow Answer

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, how many pounds of cherries would U.S.farmers produce?

Correct AnswerverifiedShow Answer

-The above figure shows the U.S.market for wheat. When there no international trade, the U.S.price of wheat is ________ per ton and the U.S.equilibrium quantity is ________ tons.

Correct AnswerverifiedShow Answer

The argument that jobs are lost to free trade is

Correct AnswerverifiedShow Answer

When a good is imported, the domestic production of it ________ and the domestic consumption of it ________.

Correct AnswerverifiedShow Answer

When a tariff is imposed on a good, the ________ increases.

Correct AnswerverifiedShow Answer

When a nation exports a good or service in which it has a comparative advantage, employment in that industry

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The United States imports t-shirts because

Correct AnswerverifiedShow Answer

Trade is often restricted because the

Correct AnswerverifiedShow Answer

Which of the following is true? i.Comparative advantage drives international trade. ii.Compared to a no-trade situation, imports make domestic producers better off. iii.Tariffs lower the domestic price of imported goods.

Correct AnswerverifiedShow Answer

Which of the following parties benefits from an import quota but not from a tariff?

Correct AnswerverifiedShow Answer

If the United States imposed a quota on the amount of salmon imported from Chile, the result would be ________ salmon prices in the United States and ________ in the quantity of salmon demanded in the United States.

Correct AnswerverifiedShow Answer

If the United States imposes a tariff on a good, then

Correct AnswerverifiedShow Answer

If the United States starts to import a good that had previously been produced in the United States, the market price of the good in the United States

Correct AnswerverifiedShow Answer

How can a domestic producer determine whether or not it has a comparative advantage in the production of a good or service?

Correct AnswerverifiedShow Answer

The fundamental force that drives trade between nations is

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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-The above figure shows the U.S.market for wheat. When there no international trade, the U.S.price of wheat is per ton and the U.S.equilibrium quantity is tons.

Correct Answer
verified

Correct Answer
verified

When a good is imported, the domestic production of it and the domestic consumption of it .

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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If the United States imposed a quota on the amount of salmon imported from Chile, the result would be salmon prices in the United States and in the quantity of salmon demanded in the United States.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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