Question 1

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. Beta would prefer terms of trade at, or close to, 1X = 1 1/2 Y.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

-Refer to the above diagram pertaining to two nations and a specific product. Point G is the:

Accepted Answer

A)   domestic price for the nation represented by lines FA and FC.
B)   world equilibrium price.
C)   domestic price for the nation represented by lines GB and GD.
D)   price above the world equilibrium price.E) A) and B)
F) B) and D)

Question 4

-Refer to the above diagram pertaining to two nations and a specific product. In equilibrium, the nation represented by lines FA and FC will:

Accepted Answer

A)   export H to the country represented by lines GB and GD.
B)   import H from the country represented by lines GB and GD.
C)   pay price F for its imports.
D)   receive price G for its exports.E) B) and D)
F) C) and D)

Question 5

In the real world, specialization is rarely complete because:

Accepted Answer

A)   nations normally experience increasing opportunity costs in producing more of the product in which they are specializing.
B)   production possibilities curves are straight lines rather than curves bowed outward as viewed from the origin.
C)   one nation's imports are necessarily another nation's exports.
D)   international law prohibits monopolies.E) B) and C)
F) C) and D)

Question 6

An excise tax that is applied to imported products which are not produced domestically is a(n) :

Accepted Answer

A)   protective tariff.
B)   revenue tariff.
C)   import quota.
D)   nontariff barrier.E) B) and D)
F) B) and C)

Question 7

Refer to the diagram below in which line AB is Canadian production possibility curve and AC is its trading possibilities curve. The international exchange ratio between beef and cheese (terms of trade) :

Accepted Answer

A)   is the absolute value of slope of line AB.
B)   is the absolute value of slope of line AC.
C)   could lie anywhere between the absolute value of the slopes of lines AB and AC.
D)   cannot be determined on the basis of this information.E) B) and C)
F) A) and B)

Question 8

The following table is domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.
 
-Refer to the above data. With a $1 per unit tariff, prices (revenue per unit)  received by domestic and foreign producers respectively will be:

Accepted Answer

A)   $2 and $1.
B)   $1 and $2.
C)   $2 and $2.
D)   $3 and $2.E) B) and C)
F) A) and B)

Question 9

Assuming labour forces of equal size, the production possibilities curves below suggest that West Mudsville has:

Accepted Answer

A)   lower wages than workers in East Mudsville before trade but equal wages after trade.
B)   absolute advantage over East Mudsville for both baseballs and, baseball hats.
C)   no advantage over East Mudsville.
D)   advantage of East Mudsville for baseballs and not baseball hats.E) None of the above
F) All of the above

Question 10

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With a per unit tariff of PcPt, the total amount of tariff revenue collected on this product will be: A)  PaPt times wy. B)  PcPt times x. C)  PcPt times wy. D)  PcPt times z." 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 per unit tariff of PcPt, the total amount of tariff revenue collected on this product will be:

Accepted Answer

A)   PaPt times wy.
B)   PcPt times x.
C)   PcPt times wy.
D)   PcPt times z.E) C) and D)
F) B) and D)

Question 11

Suppose the domestic price of copper is $1.20 per kilogram in Canada, while the world price is $1.00 per kilogram. Assuming no transportation costs, Canada will:

Accepted Answer

A)   have a domestic surplus of copper.
B)   export copper.
C)   import copper.
D)   neither export nor import copper.E) C) and D)
F) All of the above

Question 12

The 1993 General Agreement on Tariffs and Trade (GATT) :

Accepted Answer

A)   established the European Union.
B)   is also known as NAFTA.
C)   established new protections for intellectual property (copyrights, patents, and trademarks) .
D)   eliminated all tariffs and quotas worldwide.E) B) and C)
F) A) and B)

Question 13

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 lower than $4 because at $4: A)  both nations want to import steel. B)  both nations want to export steel. C)  Beta wants to export more than Alpha. D)  Alpha wants to import more than Beta." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above data. The equilibrium world price must be lower than $4 because at $4:

Accepted Answer

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

Question 14

A protective tariff will:

Accepted Answer

A)   increase the price and sales of domestic producers.
B)   reduce the welfare of domestic consumers.
C)   result in a transfer of income from domestic consumers to government.
D)   do all of the above.E) All of the above
F) C) and D)

Question 15

The following information is about the cost ratios for two products-fish (F)  and chicken (C) -in Singsong and Harmony. Assume that production occurs under conditions of constant costs and these are the only two nations in the world. If in Singsong: 1F = 2C and, in Harmony: 1F = 4C, which one of the following would not be feasible terms for trade between Singsong and Harmony?

Accepted Answer

A)   1 fish for 2 1/2 chicken
B)   1 fish for 3 chicken
C)   1 chicken for 1/5 of a fish
D)   1 chicken for 1/3 of a fishE) All of the above
F) A) and C)

Question 16

Export supply curves are _____________; import demand curves are __________.

Accepted Answer

A)   horizontal; vertical
B)   vertical; horizontal
C)   downsloping; upward sloping
D)   upward sloping; downslopingE) A) and B)
F) A) and C)

Question 17

The "gain" from international trade is:

Accepted Answer

A)   increased employment in the domestic export sector.
B)   more goods than would be attainable through domestic production alone.
C)   tariff revenue.
D)   increased employment in the domestic import sector.E) A) and B)
F) A) and C)

Question 18

Which is a valid counterargument to use tariffs to protect high wages from cheap foreign labour?

Accepted Answer

A)   The benefits of such a policy will go to consumers, not workers.
B)   The benefits of such a policy will go to businesses, not workers.
C)   Wage rates in a nation are largely determined by productivity.
D)   The economy may become overheated, thus increasing inflation.E) None of the above
F) B) and D)

Question 19

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) All of the above

Question 20

Which products were the leading exports of Canada in 2011

Accepted Answer

A)   steel
B)   clothes
C)   industrial goods and materials
D)   petroleumE) B) and C)
F) None of the above

Exam 16: International Trade

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 lower than $4 because at $4:

Correct Answer
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Which is a valid counterargument to use tariffs to protect high wages from cheap foreign labour?

Correct Answer
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Export supply curves are ___; import demand curves are .

Correct Answer
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-Refer to the above diagram pertaining to two nations and a specific product. In equilibrium, the nation represented by lines FA and FC will:

Correct Answer
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The following table is domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. -Refer to the above data. With a $1 per unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be:

Correct Answer
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The "gain" from international trade is:

Correct Answer
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Assuming labour forces of equal size, the production possibilities curves below suggest that West Mudsville has:

Correct Answer
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Correct Answer
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Correct Answer
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The 1993 General Agreement on Tariffs and Trade (GATT) :

Correct Answer
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An excise tax that is applied to imported products which are not produced domestically is a(n) :

Correct Answer
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Which products were the leading exports of Canada in 2011

Correct Answer
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Refer to the diagram below in which line AB is Canadian production possibility curve and AC is its trading possibilities curve. The international exchange ratio between beef and cheese (terms of trade) :

Correct Answer
verified

A tariff can best be described as:

Correct Answer
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-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 per unit tariff of P_cP_t, the total amount of tariff revenue collected on this product will be:

Correct Answer
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In the real world, specialization is rarely complete because:

Correct Answer
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A protective tariff will:

Correct Answer
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Suppose the domestic price of copper is $1.20 per kilogram in Canada, while the world price is $1.00 per kilogram. Assuming no transportation costs, Canada will:

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

Correct Answer
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-Refer to the above diagram pertaining to two nations and a specific product. Point G is the:

Correct Answer
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Exam 16: International Trade

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 lower than $4 because at $4:

Correct AnswerverifiedShow Answer

Which is a valid counterargument to use tariffs to protect high wages from cheap foreign labour?

Correct AnswerverifiedShow Answer

Export supply curves are _____________; import demand curves are __________.

Correct AnswerverifiedShow Answer

-Refer to the above diagram pertaining to two nations and a specific product. In equilibrium, the nation represented by lines FA and FC will:

Correct AnswerverifiedShow Answer

The following table is domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. -Refer to the above data. With a $1 per unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be:

Correct AnswerverifiedShow Answer

The "gain" from international trade is:

Correct AnswerverifiedShow Answer

Assuming labour forces of equal size, the production possibilities curves below suggest that West Mudsville has:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The 1993 General Agreement on Tariffs and Trade (GATT) :

Correct AnswerverifiedShow Answer

An excise tax that is applied to imported products which are not produced domestically is a(n) :

Correct AnswerverifiedShow Answer

Which products were the leading exports of Canada in 2011

Correct AnswerverifiedShow Answer

Refer to the diagram below in which line AB is Canadian production possibility curve and AC is its trading possibilities curve. The international exchange ratio between beef and cheese (terms of trade) :

Correct AnswerverifiedShow Answer

A tariff can best be described as:

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 per unit tariff of PcPt, the total amount of tariff revenue collected on this product will be:

Correct AnswerverifiedShow Answer

In the real world, specialization is rarely complete because:

Correct AnswerverifiedShow Answer

A protective tariff will:

Correct AnswerverifiedShow Answer

Suppose the domestic price of copper is $1.20 per kilogram in Canada, while the world price is $1.00 per kilogram. Assuming no transportation costs, Canada will:

Correct AnswerverifiedShow Answer

About how many nations belong to the World Trade Organization?

Correct AnswerverifiedShow Answer

-Refer to the above diagram pertaining to two nations and a specific product. Point G is the:

Correct AnswerverifiedShow Answer

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 lower than $4 because at $4:

Correct Answer
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Correct Answer
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Export supply curves are ___; import demand curves are .

Correct Answer
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-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 per unit tariff of P_cP_t, the total amount of tariff revenue collected on this product will be:

Correct Answer
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