Question 1

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good.  According to the graph shown,if this economy were an autarky,consumers would get area:

Accepted Answer

A)   A in consumer surplus.
B)   ABC in consumer surplus.
C)   ABCD in consumer surplus.
D)   ABCDEFG in consumer surplus.E) A) and B)
F) A) and C)

Question 2

The restriction or prohibition of trade in order to put political pressure on a country is:

Accepted Answer

A)   a tariff.
B)   unfair practice.
C)   a source of quota rent.
D)   an embargo.E) A) and B)
F) All of the above

Question 3

Voluntary exchanges generate:

Accepted Answer

A)   surplus, leaving both participants better off than they were before.
B)   deadweight loss, leaving both participants worse off than they were before.
C)   deadweight loss, leaving at least one participant worse off than they were before.
D)   a transfer of surplus from one participant to another.E) A) and C)
F) None of the above

Question 4

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good.  According to the graph shown,if the economy decides to impose a tariff,the government can expect to raise how much in government revenues?

Accepted Answer

A)   $19,500.
B)   $27,000.
C)   $34,500.
D)   $37,500.E) A) and B)
F) A) and C)

Question 5

Both countries can benefit from trade when:

Accepted Answer

A)   at least one country produces the good for which it has an absolute advantage.
B)   each specializes in producing the good for which it has a comparative advantage.
C)   each specializes in producing the good for which it has an absolute advantage.
D)   there are no trade barriers that are erected by either country.E) All of the above
F) B) and C)

Question 6

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good.  According to the graph shown,if the economy opens itself to free trade,it will become a:

Accepted Answer

A)   net exporter.
B)   net importer.
C)   autarky.
D)   quota rent seeker.E) B) and C)
F) A) and D)

Question 7

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good.  According to the graph shown,if this were depicting an autarky,the equilibrium price would be:

Accepted Answer

A)   $10.
B)   $14.
C)   $17.
D)   $4.E) A) and D)
F) A) and C)

Question 8

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good.  According to the graph shown,the change in producer surplus brought about by the introduction of a tariff is:

Accepted Answer

A)   a loss of HIJKL.
B)   an increase of HIJKL.
C)   a loss of H.
D)   an increase of H.E) All of the above
F) A) and B)

Question 9

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

Question 10

If England buys hockey sticks from Canada,then:

Accepted Answer

A)   England has an absolute advantage over Canada in making hockey sticks.
B)   Canada has an absolute advantage over England in making hockey sticks.
C)   England has the comparative advantage over Canada in making hockey sticks.
D)   Canada has the comparative advantage over England in making hockey sticks.E) A) and D)
F) A) and C)

Question 11

When a price-taking country joins the global market for some good,it:

Accepted Answer

A)   shifts the world demand and supply to the right.
B)   has a negligible effect on the world equilibrium.
C)   shifts the world demand and supply to the left.
D)   shifts the world demand to the right, and the world supply to the left.E) A) and B)
F) A) and C)

Question 12

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good.  According to the graph shown,if the economy were to open to free trade,it would become:

Accepted Answer

A)   a net-importer.
B)   a net-exporter.
C)   an autarky.
D)   less efficient with less overall market surplus.E) A) and B)
F) A) and C)

Question 13

Only a firm with ______________ will be able to make their output profitably.

Accepted Answer

A)   the highest opportunity cost of production
B)   a comparative advantage at producing their output
C)   an absolute advantage at producing their output
D)   low variable costsE) A) and B)
F) A) and C)

Question 14

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

Accepted Answer

A)   enjoy a net gain to surplus of BC.
B)   suffer a net loss to surplus of BCD.
C)   suffer a transfer of surplus to producers of BC.
D)   experience deadweight loss of FG.E) A) and B)
F) All of the above

Question 15

If Japan has an absolute advantage over the United States in making TVs,then Japan:

Accepted Answer

A)   probably sells TVs to the United States.
B)   produces more TVs than the United States using the same resources.
C)   has the ability to produce TVs at a lower opportunity cost than the United States.
D)   it will have no reason to trade with the US.E) B) and D)
F) None of the above

Question 16

As a general rule,free trade:

Accepted Answer

A)   acts to equalize the supply of and demand for factors of production across countries.
B)   causes factor prices to converge across countries.
C)   increases the supply of factors that are domestically scarce.
D)   All of these are true.E) All of the above
F) B) and D)

Question 17

If there are big gains to be had from specialization and trade,countries generally don't produce one good because:

Accepted Answer

A)   national economies often are perfectly free markets.
B)   there is perfectly free trade between national economies.
C)   specialization is generally limited by trade agreements.
D)   All of these are true.E) B) and D)
F) A) and D)

Question 18

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good.  According to the graph shown,if this economy were to open to trade,surplus would do all of the following except:

Accepted Answer

A)   increase overall.
B)   decrease for the producer.
C)   transfer from producer to consumer.
D)   create deadweight loss of CEFG.E) B) and D)
F) All of the above

Question 19

The increase in welfare in both countries that results from specialization and trade is called:

Accepted Answer

A)   surplus enhancement.
B)   exportation surplus.
C)   gains from trade.
D)   deadweight gain.E) C) and D)
F) All of the above

Question 20

Suppose a country,whose production and consumption of cell phones is large relative to the world market,has just entered the global market.If the country is a net-importer of cell phones,we would expect:

Accepted Answer

A)   an increase in both world price and quantity of cell phones.
B)   an increase in world price and decrease in world quantity of cell phones.
C)   a decrease in both world price and quantity of cell phones.
D)   a decrease in world price, and increase in world quantity of cell phones.E) None of the above
F) A) and B)

Exam 17: International Trade

The restriction or prohibition of trade in order to put political pressure on a country is:

Correct AnswerverifiedShow Answer

Suppose a country,whose production and consumption of cell phones is large relative to the world market,has just entered the global market.If the country is a net-importer of cell phones,we would expect:

Correct AnswerverifiedShow Answer

Voluntary exchanges generate:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were an autarky,consumers would get area:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,the change in producer surplus brought about by the introduction of a tariff is:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good. According to the graph shown,if the economy opens itself to free trade,it will become a:

Correct AnswerverifiedShow Answer

Both countries can benefit from trade when:

Correct AnswerverifiedShow Answer

If Japan has an absolute advantage over the United States in making TVs,then Japan:

Correct AnswerverifiedShow Answer

When a price-taking country joins the global market for some good,it:

Correct AnswerverifiedShow Answer

If England buys hockey sticks from Canada,then:

Correct AnswerverifiedShow Answer

If there are big gains to be had from specialization and trade,countries generally don't produce one good because:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy decides to impose a tariff,the government can expect to raise how much in government revenues?

Correct AnswerverifiedShow Answer

The increase in welfare in both countries that results from specialization and trade is called:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this were depicting an autarky,the equilibrium price would be:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

As a general rule,free trade:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy were to open to free trade,it would become:

Correct AnswerverifiedShow Answer

Only a firm with ______________ will be able to make their output profitably.

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,surplus would do all of the following except:

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

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified