Question 1

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. s is domestic quantity supplied and Qd is domestic quantity demanded.   Refer to the above data.The equilibrium prices of steel in Alpha and Beta are: A) $3 and $2, respectively. B) $2 and $4, respectively. C) $4 and $5, respectively. D) $1 and $2, respectively." class="answers-bank-image d-inline" rel="preload" > Refer to the above data.The equilibrium prices of steel in Alpha and Beta are:

Accepted Answer

A)  $3 and $2, respectively.
B)  $2 and $4, respectively.
C)  $4 and $5, respectively.
D)  $1 and $2, respectively.E) A) and B)
F) None of the above

Question 2

In 2016, the eight largest export nations accounted for approximately: what percentage of world exports, as of 2016.Use Image 17.1 Global Perspective.

Accepted Answer

A)  47.4 percent of world exports.
B)  32.2 percent of world exports.
C)  75 percent of world exports.
D)  80 percent of world exports.E) B) and D)
F) A) and D)

Question 3

Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price of this product is $1, this nation will:

Accepted Answer

A)  export all of the product.
B)  import all of the product.
C)  import some of the product and produce some of the product domestically.
D)  neither export nor import the product.E) None of the above
F) A) and B)

Question 4

Imposing tariffs to increase domestic employment?

Accepted Answer

A)  causes a decrease in consumer prices
B)  causes a decrease in the tariff rates of foreign nations
C)  causes an increase in the number of jobs, especially for those in the export sector.
D)  is referred to as a "beggar thy neighbour" policy.E) C) and D)
F) B) and D)

Question 5

The specification of the maximum amounts of commodities which may be imported into a country in any period of time is a:

Accepted Answer

A)  tariff.
B)  quota.
C)  nontariff barrier.
D)  voluntary export restriction.E) A) and B)
F) A) and C)

Question 6

A nation's import demand curve for a specific product:

Accepted Answer

A)  is upsloping.
B)  shows the amount of the product it will import at prices below its domestic price.
C)  lies above its export supply curve for the product.
D)  depends on domestic demand for the product, but not on domestic supply.E) A) and C)
F) All of the above

Question 7

Which is a valid counterargument to use tariffs to protect high wages from cheap foreign labour?

Accepted Answer

A)  The benefits of such a policy will go to consumers, not workers.
B)  The benefits of such a policy will go to businesses, not workers.
C)  Wage rates in a nation are largely determined by productivity.
D)  The economy may become overheated, thus increasing inflation.E) B) and D)
F) C) and D)

Question 8

Suppose the domestic price of copper is $1.20 per kilogram in Canada, while the world price is $1.00 per kilogram.Assuming no transportation costs, Canada will:

Accepted Answer

A)  have a domestic surplus of copper.
B)  export copper.
C)  import copper.
D)  neither export nor import copper.E) B) and C)
F) A) and D)

Question 9

The production possibilities table given below shows how many bushels of either wheat or rice can be produced in India and Canada with 1 unit of input.To achieve gains from specialization:

Accepted Answer

A)  India should export rice to Canada and import Canadian wheat.
B)  India should export wheat to Canada and import Canadian rice.
C)  Canada should produce both wheat and rice and not trade with India.
D)  India should produce both wheat and rice and not trade with Canada.E) A) and D)
F) A) and C)

Question 10

The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. s is domestic quantity supplied and Qd is domestic quantity demanded.   Refer to the above data.Alpha's export supply is represented by:   A) Choice A B) Choice B C) Choice C D) Choice D" class="answers-bank-image d-inline" rel="preload" > Refer to the above data.Alpha's export supply is represented by: s is domestic quantity supplied and Qd is domestic quantity demanded.   Refer to the above data.Alpha's export supply is represented by:   A) Choice A B) Choice B C) Choice C D) Choice D" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  Choice A
B)  Choice B
C)  Choice C
D)  Choice DE) A) and D)
F) B) and C)

Question 11

The "gain" from international trade is:

Accepted Answer

A)  increased employment in the domestic export sector.
B)  more goods than would be attainable through domestic production alone.
C)  tariff revenue.
D)  increased employment in the domestic import sector.E) B) and C)
F) None of the above

Question 12

Tariffs:

Accepted Answer

A)  may be imposed either to raise revenue (revenue tariffs)  or to shield domestic producers from foreign competition.
B)  are also called "import quotas."
C)  are excise taxes on goods exported abroad.
D)  are per unit subsidies designed to promote exports.E) A) and B)
F) None of the above

Question 13

Which is not commonly offered as a reason to support protectionism and abandon free trade?

Accepted Answer

A)  maintaining military self-sufficiency
B)  increasing domestic employment
C)  allowing infant industries to mature and become competitive
D)  promoting specialization and increasing worldwide production levelsE) C) and D)
F) B) and C)

Question 14

The terms of trade will favour a larger nation over a smaller nation.

Accepted Answer

A) True 
 B)False

Question 15

Production possibilities data for Gamma and Sigma.All data are in tons.Gamma production possibilities:  Sigma production possibilities:
 Refer to the above data.What are the limits of the terms of trade between Gamma and Sigma?

Accepted Answer

A)  1 tea = 2 pots to 1 tea = 6 pots
B)  1 tea = 3 pots to 1 tea = 6 pots
C)  1 tea = 2 pots to 1 tea = 3.5 pots
D)  1 tea = 1 pot to 1 tea = 3 potsE) A) and B)
F) A) and C)

Question 16

Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The import demand curves for the two nations are represented by lines:

Accepted Answer

A)  5 and 6.
B)  5 and 7.
C)  6 and 8.
D)  7 and 8.E) A) and B)
F) All of the above

Question 17

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.The size of the import quota: A) is vz. B) is vy. C) is wy. D) cannot be determined." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.The size of the import quota:

Accepted Answer

A)  is vz.
B)  is vy.
C)  is wy.
D)  cannot be determined.E) All of the above
F) B) and C)

Question 18

Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price for this product is $1.60, this nation will experience a domestic:

Accepted Answer

A)  shortage of 160 units, which it will meet with 160 units of imports.
B)  shortage of 160 units, which will increase the domestic price to $1.60.
C)  surplus of 160 units, which it will export.
D)  surplus of 160 units, which will reduce the world price to $1.00.E) A) and D)
F) None of the above

Question 19

Which is a valid counterargument to the infant industry argument for protective tariffs?

Accepted Answer

A)  It results in too many benefits for domestic firms that export goods and services.
B)  It is difficult to determine which infant industries will become mature industries with a comparative advantage.
C)  The objective would be better achieved through strategic trade policy.
D)  The objective would be better achieved by import quotas and nontariff barriers.E) All of the above
F) A) and B)

Question 20

Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The export supply curves for the two nations are represented by lines:

Accepted Answer

A)  5 and 7.
B)  5 and 6.
C)  6 and 8.
D)  7 and 8.E) A) and B)
F) C) and D)

Exam 17: Part B: International Trade

The "gain" from international trade is:

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Imposing tariffs to increase domestic employment?

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The specification of the maximum amounts of commodities which may be imported into a country in any period of time is a:

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Which is a valid counterargument to the infant industry argument for protective tariffs?

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The terms of trade will favour a larger nation over a smaller nation.

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Production possibilities data for Gamma and Sigma.All data are in tons.Gamma production possibilities: Sigma production possibilities: Refer to the above data.What are the limits of the terms of trade between Gamma and Sigma?

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Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The export supply curves for the two nations are represented by lines:

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The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. Refer to the above data.The equilibrium prices of steel in Alpha and Beta are:

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Tariffs:

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Suppose the domestic price of copper is $1.20 per kilogram in Canada, while the world price is $1.00 per kilogram.Assuming no transportation costs, Canada will:

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Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price of this product is $1, this nation will:

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In 2016, the eight largest export nations accounted for approximately: what percentage of world exports, as of 2016.Use Image 17.1 Global Perspective.

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Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The import demand curves for the two nations are represented by lines:

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Which is not commonly offered as a reason to support protectionism and abandon free trade?

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A nation's import demand curve for a specific product:

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Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.The size of the import quota:

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Which is a valid counterargument to use tariffs to protect high wages from cheap foreign labour?

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Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation.If the world price for this product is $1.60, this nation will experience a domestic:

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The following data is for the hypothetical nations of Alpha and Beta.Qs is domestic quantity supplied and Qd is domestic quantity demanded. Refer to the above data.Alpha's export supply is represented by:

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The production possibilities table given below shows how many bushels of either wheat or rice can be produced in India and Canada with 1 unit of input.To achieve gains from specialization:

Correct AnswerverifiedShow Answer

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The following data is for the hypothetical nations of Alpha and Beta.Q_s is domestic quantity supplied and Q_d is domestic quantity demanded. Refer to the above data.The equilibrium prices of steel in Alpha and Beta are:

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Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.The size of the import quota:

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The following data is for the hypothetical nations of Alpha and Beta.Q_s is domestic quantity supplied and Q_d is domestic quantity demanded. Refer to the above data.Alpha's export supply is represented by:

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