Question 1

-What is the opportunity cost of 1 automobile in terms of tractors for the U.S.and Japan,respectively?

Accepted Answer

A)  0.5 tractors and 2 tractors
B)  0.5 tractors and 1 tractor
C)  2 tractors and 1 tractor
D)  2 tractors and .25 tractors
E)  0.25 tractors and 2 tractorsF) C) and D)
G) B) and E)

Question 2

Which statement is true?

Accepted Answer

A)  Our merchandise trade deficit and our overall trade deficit are identical.
B)  Our merchandise trade deficit is greater than our overall trade deficit.
C)  Our overall trade deficit is greater than our merchandise trade deficit.
D)  None of the statements is true.E) A) and D)
F) None of the above

Question 3

Total world output can increase without the addition of resources if

Accepted Answer

A)  countries specialize in the product in which they have an absolute advantage and trade for products in which they have an absolute disadvantage.
B)  countries specialize in the product in which they have a comparative advantage and trade for products in which they have a comparative disadvantage.
C)  countries impose tariffs on the goods in which they have a comparative advantage.
D)  countries replace tariffs with quotas.
E)  countries replace quotas with tariffs.F) C) and D)
G) A) and D)

Question 4

If the U.S.imposes a tariff on autos to prevent the Korean imports from freely entering the U.S.market,which of the following is most likely to occur?

Accepted Answer

A)  The price of autos to U.S.consumers would rise,and the demand for U.S.wheat exports would increase.
B)  The price of autos to U.S.consumers would fall,and the demand for U.S.wheat exports would decrease.
C)  The price of autos to U.S.consumers would fall,and the demand for U.S.wheat exports would increase.
D)  The price of autos to U.S.consumers would rise,and the demand for U.S.exports would decrease.
E)  The price of autos to U.S.consumers would rise,and the demand for U.S.wheat exports would decrease.F) D) and E)
G) A) and D)

Question 5

Our merchandise balance of trade has been negative since the year

Accepted Answer

A)  1971.
B)  1976.
C)  1981.
D)  1986.
E)  1991.F) A) and B)
G) B) and E)

Question 6

Farm subsidies

Accepted Answer

A)  enable industrial nations to export much of their agricultural output at artificially low prices.
B)  in the world's richest nations amount to over $300 billion.
C)  make it more difficult for less developed nations to purchase capital equipment from U.S.manufacturers such as Caterpillar.
D)  All of the choices are true.E) A) and B)
F) A) and D)

Question 7

Statement I: Japan is a society that is wiling to sacrifice for the long run.
Statement II: The huge trade deficit that we have been running with Japan is almost entirely the fault of the Japanese.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) A) and D)
F) A) and B)

Question 8

One way of reducing our trade deficit would be to get Americans to

Accepted Answer

A)  save more and consume more.
B)  save more and consume less.
C)  save less and consume less.
D)  save less and consume more.E) B) and C)
F) A) and D)

Question 9

Which statement is true?

Accepted Answer

A)  Until 1971,the U.S.ran a trade deficit virtually every year of the 20th century.
B)  The U.S.ran trade surpluses for most of the 19th century.
C)  In the 1920s,the U.S.flooded the rest of the world with consumer goods such as Model T Fords,radios and waffle irons as our trade surpluses increased.
D)  Until after WWII most of U.S.exports were agricultural products,such as cotton and grain sent to Europe.E) A) and B)
F) None of the above

Question 10

A tariff,unlike a _________,provides revenues to the government.

Accepted Answer

The answer of A tariff,unlike a _________,provides revenues to the...

Question 11

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 that sets a limit upon the amount of a good that can be imported.E) A) and D)
F) None of the above

Question 12

Statement I: Most economists support the concept of free trade.
Statement II: Trade helps some nations and hurts others.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) All of the above
F) C) and D)

Question 13

High protective tariffs

Accepted Answer

A)  would be supported by most economists.
B)  will become more likely if we do not reduce our trade deficit.
C)  have very little support.
D)  would definitely solve all our trade problems.E) B) and D)
F) A) and C)

Question 14

If a nation has a comparative advantage in the production of good X,this means that the nation

Accepted Answer

A)  cannot benefit by producing and trading this product.
B)  gives up less of alternative goods than other nations in producing a unit of X.
C)  has a production possibilities curve identical to those of other nations.
D)  is not subject to opportunity costs in producing good X.E) B) and C)
F) A) and D)

Question 15

Assume a two-commodity,two-country world.Then assume that the U.S.has a comparative advantage in the production of computers and Mexico has a comparative advantage in the production of oil.Which of the following statements is true?

Accepted Answer

A)  U.S.consumption of oil will decrease after the introduction of trade.
B)  U.S.consumption of oil will increase after the introduction of trade.
C)  Mexico's consumption of oil will decrease after the introduction of trade.
D)  All of the statements are true.E) C) and D)
F) B) and D)

Question 16

From these figures we can conclude that

Accepted Answer

A)  China has a comparative advantage in rice.
B)  China has a comparative advantage in radios.
C)  the United States has a comparative advantage in radios.
D)  neither has a comparative advantage in these two goods.E) A) and B)
F) B) and C)

Question 17

A balance-of-trade deficit exists if

Accepted Answer

A)  the dollar value of exports exceeds the dollar value of imports.
B)  the dollar value of imports exceeds the dollar value of exports.
C)  money outflows exceed money inflows.
D)  money inflows exceed money outflows.E) A) and B)
F) None of the above

Question 18

If more foreign tourists visited the United States,this would

Accepted Answer

A)  lower our merchandise trade imbalance.
B)  lower our overall trade imbalance.
C)  raise our merchandise trade imbalance.
D)  raise our overall trade imbalance.E) B) and C)
F) A) and B)

Question 19

In general,when a nation has an absolute advantage over other nations in a particular product,it can produce that product:

Accepted Answer

A)  in greater absolute quantities.
B)  at a lower opportunity cost of production.
C)  with a comparative advantage.
D)  without sacrifices in terms of other products.
E)  with fewer inputs per unit.F) None of the above
G) B) and C)

Question 20

A tariff on French perfume will ____ the price of perfume in the U.S.and ____ the quantity purchased.

Accepted Answer

The answer of A tariff on French perfume will ____...

Exam 31: International Trade

From these figures we can conclude that

Correct AnswerverifiedShow Answer

Statement I: Japan is a society that is wiling to sacrifice for the long run. Statement II: The huge trade deficit that we have been running with Japan is almost entirely the fault of the Japanese.

Correct AnswerverifiedShow Answer

A tariff on French perfume will ____ the price of perfume in the U.S.and ____ the quantity purchased.

Correct AnswerverifiedShow Answer

High protective tariffs

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Farm subsidies

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If a nation has a comparative advantage in the production of good X,this means that the nation

Correct AnswerverifiedShow Answer

Our merchandise balance of trade has been negative since the year

Correct AnswerverifiedShow Answer

Total world output can increase without the addition of resources if

Correct AnswerverifiedShow Answer

-What is the opportunity cost of 1 automobile in terms of tractors for the U.S.and Japan,respectively?

Correct AnswerverifiedShow Answer

Assume a two-commodity,two-country world.Then assume that the U.S.has a comparative advantage in the production of computers and Mexico has a comparative advantage in the production of oil.Which of the following statements is true?

Correct AnswerverifiedShow Answer

One way of reducing our trade deficit would be to get Americans to

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

In general,when a nation has an absolute advantage over other nations in a particular product,it can produce that product:

Correct AnswerverifiedShow Answer

A tariff can best be described as

Correct AnswerverifiedShow Answer

If the U.S.imposes a tariff on autos to prevent the Korean imports from freely entering the U.S.market,which of the following is most likely to occur?

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

Statement I: Most economists support the concept of free trade. Statement II: Trade helps some nations and hurts others.

Correct AnswerverifiedShow Answer

If more foreign tourists visited the United States,this would

Correct AnswerverifiedShow Answer

A balance-of-trade deficit exists if

Correct AnswerverifiedShow Answer

A tariff,unlike a _________,provides revenues to the government.

Correct AnswerverifiedShow Answer

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A tariff on French perfume will the price of perfume in the U.S.and the quantity purchased.

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