Question 1

An excise tax on imported goods is known as a(n) :

Accepted Answer

A)   quota.
B)   tariff.
C)   export restriction.
D)   price ceiling.E) B) and C)
F) All of the above

Question 2

Regional free-trade zones refers to a:

Accepted Answer

A)   group of industries that have common commodity and trade rules.
B)   group of countries which have liberalized the movement of Labour and not capital.
C)   group of countries that impose trade restrictions against each other.
D)   group of countries that seek to reduce tariffs, increase economic interests, and establish trade rules.E) A) and D)
F) A) and B)

Question 3

In effect tariffs on imports are:

Accepted Answer

A)   special taxes on domestic producers.
B)   subsidies to domestic consumers.
C)   subsidies to foreign producers.
D)   subsidies for domestic producers.E) C) and D)
F) A) and B)

Question 4

When a tariff or quota on a product is removed, the action:

Accepted Answer

A)   benefits producers in the protected industries.
B)   benefits consumers of the product.
C)   benefits the government.
D)   hurts nations exporting the product.E) None of the above
F) B) and C)

Question 5

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

Question 6

Which of the following is the best description of a quota?

Accepted Answer

A)   an excise tax that is designed to place foreign producers at a competitive disadvantage in selling in domestic markets
B)   a specification of the maximum amount of a product that may be imported in any period of time
C)   regulations and licensing related to the quality or safety of imported products
D)   agreements adopted by exporting nations to limit exports to another countryE) A) and B)
F) None of the above

Question 7

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 a world price of $5: A)  Alpha will want to import 50 units of steel. B)  Beta will want to import 60 units of steel. C)  Alpha will want to export 50 units of steel. D)  neither country will want to export steel." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above data. At a world price of $5:

Accepted Answer

A)   Alpha will want to import 50 units of steel.
B)   Beta will want to import 60 units of steel.
C)   Alpha will want to export 50 units of steel.
D)   neither country will want to export steel.E) A) and C)
F) None of the above

Question 8

A high tariff on imported good X might reduce domestic employment in industry Y if:

Accepted Answer

A)   X is an input used domestically in producing Y.
B)   X and Y are substitute goods.
C)   X is an inferior good.
D)   Y is an inferior good.E) None of the above
F) A) and D)

Question 9

According to the principle of comparative advantage, worldwide output and consumption levels will be highest when goods are produced in nations where:

Accepted Answer

A)   domestic opportunity costs are lowest.
B)   inflation rates are low.
C)   the balance of trade is in a surplus position.
D)   the exchange rate is falling.E) A) and B)
F) A) and D)

Question 10

A nation will import a particular product if the world price is less than the domestic price.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of a capital-intensive commodity?

Accepted Answer

A)   clothing
B)   wool
C)   sunflower seeds
D)   chemicalsE) All of the above
F) A) and B)

Question 12

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

Accepted Answer

A)   cannot benefit by producing and trading this product.
B)   must give up less of other 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 increasing opportunity costs.E) A) and C)
F) A) and D)

Question 13

The fact that international specialization and trade based on comparative advantage can increase world output is reflected in the fact that:

Accepted Answer

A)   the production possibilities curve of any two nations are identical.
B)   a nation's production possibilities and trading possibilities lines coincide.
C)   a nation's trading possibilities line lies to the right of its production possibility
D)   a nation's production possibilities line lies to the right of its trading possibilities.E) C) and D)
F) B) and D)

Question 14

In a two-nation model, the equilibrium world price will occur where:

Accepted Answer

A)   one nation's export supply curve intersects the other nation's import demand curve.
B)   both nations' exports are exactly twice the level of imports.
C)   both nations' export supply curves are horizontal.
D)   both nations' import demand curves are vertical.E) All of the above
F) B) and C)

Question 15

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) C) and D)
F) All of the above

Question 16

The World Trade Organization:

Accepted Answer

A)   is also known as the International Monetary Fund (IMF) .
B)   was established by the Uruguay Round of the General Agreement on Tariffs and Trade (GATT)  to resolve disputes arising under the GATT rules.
C)   is also known as the European Union-NAFTA Alliance.
D)   enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.E) A) and D)
F) B) and C)

Question 17

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size.
 
-Refer to the above data. Beta:

Accepted Answer

A)   should specialize in catching fish and trade with Alpha for chips.
B)   should specialize in producing chips and trade with Alpha for fish.
C)   will not realize gains from specialization and trade.
D)   will export both fish and chips to Alpha.E) A) and B)
F) A) and C)

Question 18

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 world price must be higher than $1 because at $1: A)  Beta wants to import more than Alpha. B)  Alpha wants to export more than Beta. C)  both nations want to export steel. D)  both nations want to import steel." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above data. The equilibrium world price must be higher than $1 because at $1:

Accepted Answer

A)   Beta wants to import more than Alpha.
B)   Alpha wants to export more than Beta.
C)   both nations want to export steel.
D)   both nations want to import steel.E) A) and B)
F) B) and C)

Question 19

Nations Quirk and Turk can produce aluminum and oil in the following maximum quantities when all of their resources are fully employed.  Which one of the following terms of trade is most likely to produce exchange between the two nations?

Accepted Answer

A)   .5 unit of oil for 1 unit of aluminum
B)   .5 unit of oil for 2 units of aluminum
C)   1 unit of oil for .4 unit of aluminum
D)   1 unit of oil for 5 units of aluminumE) B) and C)
F) A) and B)

Question 20

The following shows points from straight-line production possibilities schedules for two countries.
-The above table indicates that:

Accepted Answer

A)   country A has comparative advantage in producing meat and country B has comparative advantage in building houses.
B)   country A has a comparative advantage in building houses and country B in production of meat.
C)   country B can produce both products more efficiently than country A.
D)   country A should specialize in building houses.E) None of the above
F) A) and D)

Exam 16: International Trade

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. -Refer to the above data. Beta:

Correct Answer
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If a nation has a comparative advantage in the production of X, this means the nation:

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 a world price of $5:

Correct Answer
verified

The World Trade Organization:

Correct Answer
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A nation will import a particular product if the world price is less than the domestic price.

Correct Answer
verified

Nations Quirk and Turk can produce aluminum and oil in the following maximum quantities when all of their resources are fully employed. Which one of the following terms of trade is most likely to produce exchange between the two nations?

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. The equilibrium world price must be higher than $1 because at $1:

Correct Answer
verified

An excise tax on imported goods is known as a(n) :

Correct Answer
verified

In effect tariffs on imports are:

Correct Answer
verified

When a tariff or quota on a product is removed, the action:

Correct Answer
verified

In a two-nation model, the equilibrium world price will occur where:

Correct Answer
verified

A high tariff on imported good X might reduce domestic employment in industry Y if:

Correct Answer
verified

The following shows points from straight-line production possibilities schedules for two countries. -The above table indicates that:

Correct Answer
verified

Which of the following is an example of a capital-intensive commodity?

Correct Answer
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Which of the following is the best description of a quota?

Correct Answer
verified

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

Correct Answer
verified

According to the principle of comparative advantage, worldwide output and consumption levels will be highest when goods are produced in nations where:

Correct Answer
verified

The fact that international specialization and trade based on comparative advantage can increase world output is reflected in the fact that:

Correct Answer
verified

Correct Answer
verified

Regional free-trade zones refers to a:

Correct Answer
verified

Exam 16: International Trade

Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. -Refer to the above data. Beta:

Correct AnswerverifiedShow Answer

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

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 a world price of $5:

Correct AnswerverifiedShow Answer

The World Trade Organization:

Correct AnswerverifiedShow Answer

A nation will import a particular product if the world price is less than the domestic price.

Correct AnswerverifiedShow Answer

Nations Quirk and Turk can produce aluminum and oil in the following maximum quantities when all of their resources are fully employed. Which one of the following terms of trade is most likely to produce exchange between the two nations?

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. The equilibrium world price must be higher than $1 because at $1:

Correct AnswerverifiedShow Answer

An excise tax on imported goods is known as a(n) :

Correct AnswerverifiedShow Answer

In effect tariffs on imports are:

Correct AnswerverifiedShow Answer

When a tariff or quota on a product is removed, the action:

Correct AnswerverifiedShow Answer

In a two-nation model, the equilibrium world price will occur where:

Correct AnswerverifiedShow Answer

A high tariff on imported good X might reduce domestic employment in industry Y if:

Correct AnswerverifiedShow Answer

The following shows points from straight-line production possibilities schedules for two countries. -The above table indicates that:

Correct AnswerverifiedShow Answer

Which of the following is an example of a capital-intensive commodity?

Correct AnswerverifiedShow Answer

Which of the following is the best description of a quota?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to the principle of comparative advantage, worldwide output and consumption levels will be highest when goods are produced in nations where:

Correct AnswerverifiedShow Answer

The fact that international specialization and trade based on comparative advantage can increase world output is reflected in the fact that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Regional free-trade zones refers to a:

Correct AnswerverifiedShow Answer

Correct Answer
verified

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 a world price of $5:

Correct Answer
verified

Correct Answer
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Correct Answer
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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. The equilibrium world price must be higher than $1 because at $1:

Correct Answer
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Correct Answer
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