Question 1

The policies that different governments use to govern their economies:

Accepted Answer

A)  have largely stayed the same over time, making international trade a simple process.
B)  vary widely from one another, sometimes making international trade a difficult process.
C)  are largely similar, making international trade a simple process.
D)  are similar in most respects, but different in a few key areas, making international trade a somewhat difficult process.E) C) and D)
F) B) and D)

Question 2

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good.  If this economy were to open to trade, which amount of surplus would be transferred and to who?

Accepted Answer

A)  Areas F + G would be transferred to the consumer.
B)  Areas D + E would be transferred to the consumer.
C)  Areas D + E + F + G would be transferred to the consumer.
D)  Areas F + G would be transferred to the producer.E) B) and D)
F) B) and C) B

Question 3

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good.   If this economy decides to open to free trade, how many units of the good will be exported?

Accepted Answer

A)  35
B)  85
C)  120
D)  75E) None of the above
F) C) and D)

Question 4

Which of the following is true about the role governments play in trade?

Accepted Answer

A)  Each country's government must agree on who is going to specialize in what good.
B)  Governments must employ economic planners to discover who has the comparative advantages for different products.
C)  Governments do not need to manage individual firms' decisions.
D)  Firms and individuals must follow government mandates about what to trade.E) B) and C)
F) A) and D) C

Question 5

When trade is possible, each country can produce the goods that it has a(n) _______ advantage at producing, rather than the _______.

Accepted Answer

A)  comparative; exact combination of goods its consumers want
B)  absolute; exact combination of goods its consumers want
C)  absolute; goods it has a comparative advantage at producing
D)  comparative; exact combination of goods its producers wantE) B) and D)
F) All of the above

Question 6

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.  If this economy was previously open to free trade, the introduction of the tariff will cause consumers to:

Accepted Answer

A)  gain the surplus in areas H + I + J + K + L.
B)  lose the surplus in areas H + I + J + K + L.
C)  gain the surplus in areas D + E.
D)  lose the surplus in areas D + E.E) B) and D)
F) None of the above

Question 7

The graph shown demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good.  If the economy opens itself to free trade, producer surplus will:

Accepted Answer

A)  decrease to area I.
B)  decrease to areas E + I.
C)  increase to areas E + I.
D)  increase to areas A + B + C + D + E + F + G + H.E) None of the above
F) All of the above

Question 8

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good.   If this economy decides to open to free trade, how many units of the good would be consumed domestically?

Accepted Answer

A)  45
B)  85
C)  120
D)  75E) A) and B)
F) B) and C)

Question 9

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.  If this economy decides to impose a $10 per unit tariff:deadweight loss will be $400.government revenue will be $1,600.producer surplus will increase by $600.

Accepted Answer

A)  II only
B)  I and II only
C)  I and III only
D)  II and III onlyE) A) and B)
F) C) and D)

Question 10

Over time, technology tends to:

Accepted Answer

A)  set countries apart in terms of productivity.
B)  help developing nations experience the "catch-up" effect.
C)  diminish in nations that are still developing.
D)  spread from country to country, equalizing opportunity costs.E) C) and D)
F) None of the above

Question 11

A country that produces and consumes a large amount of cell phones comparatively has just entered the world market. If the country becomes a net-importer of coffee, we would expect to see:

Accepted Answer

A)  an increase in both the world price and world quantity of cell phones.
B)  an increase in the world price of cell phones and a decrease in the world quantity of cell phones.
C)  a decrease in both the world price and world quantity of cell phones.
D)  a decrease in the world price of cell phones and an increase in the world quantity of cell phones.E) A) and B)
F) A) and C)

Question 12

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good.   If this economy decides to open to trade, the domestic price will:

Accepted Answer

A)  be $14 for domestically produced units and $10 for imported units.
B)  fall to $10 for all units produced.
C)  be $14, with an increase in units sold overall.
D)  be $17 for all units produced.E) B) and C)
F) None of the above

Question 13

If a country that has a comparative advantage at producing wine moves from autarky to free trade, what reaction would we expect to see in the world market?

Accepted Answer

A)  Foreign wine producers would be opposed.
B)  Domestic wine consumers would be opposed.
C)  Domestic wine producers would be opposed.
D)  Domestic wine consumers would not be influenced.E) None of the above
F) A) and C)

Question 14

For the most part, trade between many countries:

Accepted Answer

A)  is entirely unregulated or free.
B)  is regulated or restricted in some way.
C)  is free, with the notable exception of China.
D)  improves the well-being of some nations while harming others.E) C) and D)
F) None of the above

Question 15

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good.   If this economy were an autarky, consumer surplus would consist of which area(s) ?

Accepted Answer

A)  A
B)  A + B + C
C)  A + B + C + D
D)  A + B + C + D + E + F + GE) A) and D)
F) None of the above

Question 16

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.   If this economy were to open to free trade, the domestic quantity supplied would:

Accepted Answer

A)  drop from 815 units to 500 units.
B)  drop from 815 units to 250 units.
C)  increase from 250 units to 500 units.
D)  increase from 815 units to 1,500 units.E) A) and D)
F) None of the above B

Question 17

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good.   If this economy were to open to trade, domestic producers would:

Accepted Answer

A)  transfer the surplus in areas B + C to domestic consumers.
B)  transfer the surplus in areas B + C + D to foreign producers.
C)  transfer the surplus in areas B + C + D to foreign consumers.
D)  receive additional surplus in areas B + C + D.E) A) and B)
F) A) and C)

Question 18

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.  If this economy were to open to free trade, what amount of the good would be demanded domestically?

Accepted Answer

A)  250 units
B)  500 units
C)  1,150 units
D)  1,500 unitsE) B) and C)
F) A) and D)

Question 19

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good.  If this economy were an autarky, which area(s) of the graph would display consumer surplus?

Accepted Answer

A)  A
B)  A + B + C
C)  A + B + C + D + E
D)  A + B + C + D + E + F + GE) B) and C)
F) B) and D)

Question 20

Actions that reduce trade restrictions and promote free trade are often referred to as:

Accepted Answer

A)  trade liberalization.
B)  trade protectionism.
C)  free trade politicism.
D)  autarky.E) B) and C)
F) A) and B)

Exam 17: International Trade

The policies that different governments use to govern their economies:

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy were to open to trade, which amount of surplus would be transferred and to who?

Correct AnswerverifiedB

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy decides to open to free trade, how many units of the good will be exported?

Correct AnswerverifiedShow Answer

Which of the following is true about the role governments play in trade?

Correct AnswerverifiedC

When trade is possible, each country can produce the goods that it has a(n) _______ advantage at producing, rather than the _______.

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good. If this economy was previously open to free trade, the introduction of the tariff will cause consumers to:

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good. If the economy opens itself to free trade, producer surplus will:

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy decides to open to free trade, how many units of the good would be consumed domestically?

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good. If this economy decides to impose a $10 per unit tariff:deadweight loss will be $400.government revenue will be $1,600.producer surplus will increase by $600.

Correct AnswerverifiedShow Answer

Over time, technology tends to:

Correct AnswerverifiedShow Answer

A country that produces and consumes a large amount of cell phones comparatively has just entered the world market. If the country becomes a net-importer of coffee, we would expect to see:

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy decides to open to trade, the domestic price will:

Correct AnswerverifiedShow Answer

If a country that has a comparative advantage at producing wine moves from autarky to free trade, what reaction would we expect to see in the world market?

Correct AnswerverifiedShow Answer

For the most part, trade between many countries:

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy were an autarky, consumer surplus would consist of which area(s) ?

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good. If this economy were to open to free trade, the domestic quantity supplied would:

Correct AnswerverifiedB

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy were to open to trade, domestic producers would:

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good. If this economy were to open to free trade, what amount of the good would be demanded domestically?

Correct AnswerverifiedShow Answer

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy were an autarky, which area(s) of the graph would display consumer surplus?

Correct AnswerverifiedShow Answer

Actions that reduce trade restrictions and promote free trade are often referred to as:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified
C

When trade is possible, each country can produce the goods that it has a(n) _ advantage at producing, rather than the _.

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

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified