Question 1

Barriers to free trade impair efficiency in the international allocation of resources.

Accepted Answer

A) True 
 B)False

Question 2

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.With a PcPt per unit tariff,the quantities sold by foreign and domestic producers respectively will be: A)  xz and x. B)  xv and xz. C)  x and xz. D)  wy and w." 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.With a PcPt per unit tariff,the quantities sold by foreign and domestic producers respectively will be:

Accepted Answer

A)   xz and x.
B)   xv and xz.
C)   x and xz.
D)   wy and w.E) C) and D)
F) B) and D)

Question 3

About how many nations belong to the World Trade Organization?

Accepted Answer

A)   155
B)   70
C)   149
D)   135E) None of the above
F) A) and D)

Question 4

A tariff can best be described as:

Accepted Answer

A)   an excise tax on an imported good.
B)   a government payment to domestic producers to enable them to sell competitively in world markets.
C)   an excise tax on an exported good.
D)   a law which sets a limit on the amount of a good which can be imported.E) All of the above
F) A) and C)

Question 5

Which is an example of a nontariff barrier (NTB) ?

Accepted Answer

A)   an excise tax on exported goods
B)   an excise tax on imported goods
C)   box-by-box inspection requirements for imported fruit
D)   an excise tax placed on a product that is not produced domestically.E) B) and C)
F) A) and B)

Question 6

Comparative advantage can result from different climates,natural resource endowments,and capital stocks in various countries.

Accepted Answer

A) True 
 B)False

Question 7

Which statement is true?

Accepted Answer

A)   Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost.
B)   Comparative advantage means that total world output will decline when each good is produced by the nation with the lowest domestic opportunity cost.
C)   Specialization is complete among nations when opportunity costs rise as any given nation produces more of a particular product.
D)   Specialization is less than complete among nations when opportunity costs rise as any given nation produces more of a particular product.E) A) and C)
F) All of the above

Question 8

The cheap foreign labour argument suggests that:

Accepted Answer

A)   trade barriers between rich and poor countries would definitely create a negative impact on the Canadian economy.
B)   free trade between rich and poor countries would definitely create a positive impact on the Canadian economy.
C)   it is not mutually beneficial for rich and poor countries to trade with one another.
D)   it is mutually beneficial for rich and poor countries to trade with one another.E) All of the above
F) A) and B)

Question 9

Which one of the following would best describe a protective tariff?

Accepted Answer

A)   an excise tax that is usually applied to products which are not produced domestically in order to raise revenues for government
B)   an excise tax that is designed to put foreign producers at a competitive disadvantage in selling in domestic markets
C)   a specification of the maximum amount of a product that may be imported in any period of time which is often used to protect domestic producers of a product
D)   such activities as restricting the issuance of licenses for imported products or setting unreasonable standards for quality or safety in order to restrict imports and protect domestic marketsE) None of the above
F) C) and D)

Question 10

Since World War II,several factors have contributed to the rapid growth of international trade.These factors are:

Accepted Answer

A)   transportation technology,general increase in tariffs,and differences among nations in terms of production cost.
B)   transportation and communications technologies,and the general decline in the level of tariffs.
C)   transportation technology,reductions in the number of participants,and the general increase in the level of tariffs.
D)   communication technology,general increase in the level of tariffs,and the transportation technology.E) B) and D)
F) None of the above

Question 11

When Sally can paint a house and plant a tree more efficiently than Tom,we can conclude that:

Accepted Answer

A)   Tom has absolute advantage over Sally in both painting and gardening.
B)   Sally has absolute advantage over Tom in both painting and gardening.
C)   Sally has absolute advantage over Tom in gardening and not painting.
D)   Tom has absolute advantage over Sally in painting and not gardening.E) A) and D)
F) C) and D)

Question 12

Suppose Canada eliminates tariffs on German bicycles.As a result,we would expect:

Accepted Answer

A)   the price of German bicycles to decline in Canada.
B)   employment would increase in the German bicycle industry.
C)   employment would decrease in the Canadian bicycle industry.
D)   all of the above to occur.E) B) and C)
F) A) and D)

Question 13

Which 1993 economic agreement established a major free-trade zone in the western hemisphere?

Accepted Answer

A)   the formation of the European Union
B)   the North American Free Trade Agreement
C)   the Reciprocal Trade Agreements Act
D)   the Doha Development AgendaE) B) and D)
F) All of the above

Question 14

Assume that by devoting all its resources to the production of X,nation Alpha can produce 40 units of X.By devoting all its resources to Y,Alpha can produce 60Y.Comparable figures for nation Beta are,60X and 40Y.
-Refer to the above information.Alpha would prefer terms of trade at,or close to,1X = 2/3 Y.

Accepted Answer

A) True 
 B)False

Question 15

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.At the equilibrium world price: A)  both nations will export steel. B)  both nations will import steel. C)  Alpha will export steel and Beta will import steel. D)  Beta will export steel and Alpha will import steel." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above data.At the equilibrium world price:

Accepted Answer

A)   both nations will export steel.
B)   both nations will import steel.
C)   Alpha will export steel and Beta will import steel.
D)   Beta will export steel and Alpha will import steel.E) C) and D)
F) B) and D)

Question 16

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) A) and D)
F) None of the above D

Question 17

The graph below shows the production possibility curves for two hypothetical nations,Orin and Pohl,which each make two hypothetical products,jaxs and keps.Which of the following statements is correct?

Accepted Answer

A)   Orin has a comparative advantage in both jaxs and keps.
B)   Pohl has a comparative advantage in jaxs.
C)   The opportunity cost of making jaxs is lower in Orin than in Pohl.
D)   Orin is more efficient than Pohl.E) None of the above
F) A) and C)

Question 18

Assume that by devoting all its resources to the production of X,nation Alpha can produce 40 units of X.By devoting all its resources to Y,Alpha can produce 60Y.Comparable figures for nation Beta are,60X and 40Y.
-Refer to the above information.If Alpha had produced 20X and 30Y and Beta had produced 30X and 20Y before specialization and trade,then we can say that the gains from specialization and trade are 10X and 10Y.

Accepted Answer

A) True 
 B)False  True

Question 19

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) B) and C)
F) A) and D) A

Question 20

Assume that by devoting all its resources to the production of X,nation Alpha can produce 40 units of X.By devoting all its resources to Y,Alpha can produce 60Y.Comparable figures for nation Beta are,60X and 40Y.
-The terms of trade will favour a larger nation over a smaller nation.

Accepted Answer

A) True 
 B)False

Exam 17: International Trade

Barriers to free trade impair efficiency in the international allocation of resources.

Correct Answer
verified

-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.With a P_cP_t per unit tariff,the quantities sold by foreign and domestic producers respectively will be:

Correct Answer
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About how many nations belong to the World Trade Organization?

Correct Answer
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A tariff can best be described as:

Correct Answer
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Which is an example of a nontariff barrier (NTB) ?

Correct Answer
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Comparative advantage can result from different climates,natural resource endowments,and capital stocks in various countries.

Correct Answer
verified

Which statement is true?

Correct Answer
verified

The cheap foreign labour argument suggests that:

Correct Answer
verified

Which one of the following would best describe a protective tariff?

Correct Answer
verified

Since World War II,several factors have contributed to the rapid growth of international trade.These factors are:

Correct Answer
verified

When Sally can paint a house and plant a tree more efficiently than Tom,we can conclude that:

Correct Answer
verified

Suppose Canada eliminates tariffs on German bicycles.As a result,we would expect:

Correct Answer
verified

Which 1993 economic agreement established a major free-trade zone in the western hemisphere?

Correct Answer
verified

Correct 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.At the equilibrium world price:

Correct Answer
verified

Imposing tariffs to increase domestic employment?

Correct Answer
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D

The graph below shows the production possibility curves for two hypothetical nations,Orin and Pohl,which each make two hypothetical products,jaxs and keps.Which of the following statements is correct?

Correct Answer
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Correct Answer
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True

Tariffs:

Correct Answer
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A

Assume that by devoting all its resources to the production of X,nation Alpha can produce 40 units of X.By devoting all its resources to Y,Alpha can produce 60Y.Comparable figures for nation Beta are,60X and 40Y. -The terms of trade will favour a larger nation over a smaller nation.

Correct Answer
verified

Exam 17: International Trade

Barriers to free trade impair efficiency in the international allocation of resources.

Correct AnswerverifiedShow Answer

-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.With a PcPt per unit tariff,the quantities sold by foreign and domestic producers respectively will be:

Correct AnswerverifiedShow Answer

About how many nations belong to the World Trade Organization?

Correct AnswerverifiedShow Answer

A tariff can best be described as:

Correct AnswerverifiedShow Answer

Which is an example of a nontariff barrier (NTB) ?

Correct AnswerverifiedShow Answer

Comparative advantage can result from different climates,natural resource endowments,and capital stocks in various countries.

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

The cheap foreign labour argument suggests that:

Correct AnswerverifiedShow Answer

Which one of the following would best describe a protective tariff?

Correct AnswerverifiedShow Answer

Since World War II,several factors have contributed to the rapid growth of international trade.These factors are:

Correct AnswerverifiedShow Answer

When Sally can paint a house and plant a tree more efficiently than Tom,we can conclude that:

Correct AnswerverifiedShow Answer

Suppose Canada eliminates tariffs on German bicycles.As a result,we would expect:

Correct AnswerverifiedShow Answer

Which 1993 economic agreement established a major free-trade zone in the western hemisphere?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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.At the equilibrium world price:

Correct AnswerverifiedShow Answer

Imposing tariffs to increase domestic employment?

Correct AnswerverifiedD

The graph below shows the production possibility curves for two hypothetical nations,Orin and Pohl,which each make two hypothetical products,jaxs and keps.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTrue

Tariffs:

Correct AnswerverifiedA

Assume that by devoting all its resources to the production of X,nation Alpha can produce 40 units of X.By devoting all its resources to Y,Alpha can produce 60Y.Comparable figures for nation Beta are,60X and 40Y. -The terms of trade will favour a larger nation over a smaller nation.

Correct AnswerverifiedShow Answer

Correct Answer
verified

-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.With a P_cP_t per unit tariff,the quantities sold by foreign and domestic producers respectively will be:

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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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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Correct Answer
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Correct Answer
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Correct Answer
verified

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.At the equilibrium world price:

Correct Answer
verified

Correct Answer
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D

Correct Answer
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Correct Answer
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True

Correct Answer
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A

Correct Answer
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