Question 1

The North American Free Trade Agreement (NAFTA) :

Accepted Answer

A)   resulted from GATT negotiations at the Uruguay Round.
B)   permits the European Union to export goods tariff free to North America.
C)   has eliminated most of the tariffs and other trade barriers among Canada, Mexico, and the United States.
D)   will reduce American exports to Mexico.E) B) and D)
F) All of the above

Question 2

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

Question 3

Which is not commonly offered as a reason to support protectionism and abandon free trade?

Accepted Answer

A)   maintaining military self-sufficiency
B)   increasing domestic employment
C)   allowing infant industries to mature and become competitive
D)   promoting specialization and increasing worldwide production levelsE) A) and B)
F) B) and C)

Question 4

The following shows the Production possibilities tables for two countries, Latalia and Trombonia:
 
-Refer to the above tables. Assume that before specialization and trade, Latalia produced combination C and Trombonia produced combination B. If these two nations now specialize completely in accordance with comparative advantage, the total gains from specialization and trade will be:

Accepted Answer

A)   4 tons of beans.
B)   1 ton of pork and 2 tons of beans.
C)   4 tons of pork.
D)   2 tons of pork and 4 tons of beans.E) A) and D)
F) B) and C)

Question 5

Production possibilities data for Gamma and Sigma. All data are in tons.
Gamma production possibilities:
  Sigma production possibilities:
 
-Refer to the above data. What are the limits of the terms of trade between Gamma and Sigma?

Accepted Answer

A)   1 tea = 2 pots to 1 tea = 6 pots
B)   1 tea = 3 pots to 1 tea = 6 pots
C)   1 tea = 2 pots to 1 tea = 3.5 pots
D)   1 tea = 1 pot to 1 tea = 3 potsE) None of the above
F) A) and D)

Question 6

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

Accepted Answer

A)   clothing
B)   beer
C)   Aspirin tablets
D)   gasolineE) B) and D)
F) None of the above

Question 7

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

Question 8

-Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation. If the world price for this product is $1.60, this nation will experience a domestic:

Accepted Answer

A)   shortage of 160 units, which it will meet with 160 units of imports.
B)   shortage of 160 units, which will increase the domestic price to $1.60.
C)   surplus of 160 units, which it will export.
D)   surplus of 160 units, which will reduce the world price to $1.00.E) A) and D)
F) B) and C)

Question 9

Refer to the diagrams below. Which of the following is a feasible rate at which X and Y might be exchanged?

Accepted Answer

A)   1X for 3Y
B)   1X for 1.5Y
C)   1X for 2.5Y
D)   1X for .5YE) All of the above
F) B) and C)

Question 10

"Dumping" of goods abroad:

Accepted Answer

A)   constitutes a general case for permanent tariffs.
B)   may be part of a firm's price discrimination strategy.
C)   may be part of a nation's strategy to rectify its trade deficit.
D)   drives up prices of the dumped goods.E) B) and C)
F) All of the above

Question 11

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

Question 12

The Uruguay Round of GATT negotiations:

Accepted Answer

A)   reduced the nontariff barriers in services and increased them on manufactured goods.
B)   ended the use of patents, copyrights, and trademarks on an international basis.
C)   reduced or eliminated tariffs on thousands of products and, reduced the overall tariffs by 33 percent.
D)   restricted foreign investment in other countries to a specified percentage of a nation's domestic output.E) A) and C)
F) B) and C)

Question 13

-Refer to the above diagrams. The solid lines are production possibilities curves; the dashed lines are trading possibilities curves. The data suggest that:

Accepted Answer

A)   West Lothian should specialize in, and export, beer.
B)   both countries will be better off if they do not engage in specialization and trade involving these two products.
C)   West Lothian should specialize in, and export, pizza.
D)   East Lothian should specialize in, and export, beer.E) A) and B)
F) None of the above

Question 14

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. Alpha's export supply is represented by:   A)  Choice A B)  Choice B C)  Choice C D)  Choice D" class="answers-bank-image d-inline" rel="preload" >
-Refer to the above data. Alpha's export supply is represented by: s is domestic quantity supplied and Qd is domestic quantity demanded.    -Refer to the above data. Alpha's export supply is represented by:   A)  Choice A B)  Choice B C)  Choice C D)  Choice D" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)   Choice A
B)   Choice B
C)   Choice C
D)   Choice DE) A) and B)
F) A) and C)

Question 15

In comparing a tariff and an import quota we find that:

Accepted Answer

A)   the tariff and quota both generate the same amount of revenue for the federal government.
B)   the tariff generates revenue for the federal government but the quota does not.
C)   the quota generates revenue for the federal government but the tariff does not.
D)   neither the tariff nor the quota generates revenue for the federal government.E) All of the above
F) B) and C)

Question 16

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

Question 17

The following is the Production possibilities tables for two countries, Latalia and Trombonia:
Latalia's production possibilities
 
-Refer to the above tables. In Latalia the domestic real cost of 1 ton of pork:

Accepted Answer

A)   is 3 tons of beans.
B)   diminishes with the level of pork production.
C)   is 5 tons of beans.
D)   is 1/5 of a ton of beans.E) A) and C)
F) A) and B)

Question 18

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, the quantities sold by foreign and domestic producers respectively will be:

Accepted Answer

A)   1 unit and 15 units.
B)   7 units and 4 units.
C)   11 units and 4 units.
D)   indeterminate.E) C) and D)
F) B) and D)

Question 19

Which is not a commonly heard argument for protectionism?

Accepted Answer

A)   A strong national defense requires that some military products be produced domestically.
B)   Infant industries need short-run, but not long-run, protection from foreign competition.
C)   Specialization along the lines of comparative advantage can lead to greater economic instability for a nation.
D)   When other nations' economies grow they typically import fewer goods and services.E) A) and B)
F) B) and C)

Question 20

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Accepted Answer

A) True 
 B)False

Exam 16: International Trade

-Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation. If the world price for this product is $1.60, this nation will experience a domestic:

Correct Answer
verified

Which is not commonly offered as a reason to support protectionism and abandon free trade?

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

The cheap foreign labour argument suggests that:

Correct Answer
verified

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct Answer
verified

The following is the Production possibilities tables for two countries, Latalia and Trombonia: Latalia's production possibilities -Refer to the above tables. In Latalia the domestic real cost of 1 ton of pork:

Correct Answer
verified

The Uruguay Round of GATT negotiations:

Correct Answer
verified

-Refer to the above diagrams. The solid lines are production possibilities curves; the dashed lines are trading possibilities curves. The data suggest that:

Correct Answer
verified

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, the quantities sold by foreign and domestic producers respectively will be:

Correct Answer
verified

In comparing a tariff and an import quota we find that:

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. Alpha's export supply is represented by:

Correct Answer
verified

The North American Free Trade Agreement (NAFTA) :

Correct Answer
verified

Correct Answer
verified

"Dumping" of goods abroad:

Correct Answer
verified

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

Correct Answer
verified

Which is not a commonly heard argument for protectionism?

Correct Answer
verified

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
verified

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

Correct Answer
verified

Refer to the diagrams below. Which of the following is a feasible rate at which X and Y might be exchanged?

Correct Answer
verified

Production possibilities data for Gamma and Sigma. All data are in tons. Gamma production possibilities: Sigma production possibilities: -Refer to the above data. What are the limits of the terms of trade between Gamma and Sigma?

Correct Answer
verified

Exam 16: International Trade

-Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation. If the world price for this product is $1.60, this nation will experience a domestic:

Correct AnswerverifiedShow Answer

Which is not commonly offered as a reason to support protectionism and abandon free trade?

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

The cheap foreign labour argument suggests that:

Correct AnswerverifiedShow Answer

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct AnswerverifiedShow Answer

The following is the Production possibilities tables for two countries, Latalia and Trombonia: Latalia's production possibilities -Refer to the above tables. In Latalia the domestic real cost of 1 ton of pork:

Correct AnswerverifiedShow Answer

The Uruguay Round of GATT negotiations:

Correct AnswerverifiedShow Answer

-Refer to the above diagrams. The solid lines are production possibilities curves; the dashed lines are trading possibilities curves. The data suggest that:

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, the quantities sold by foreign and domestic producers respectively will be:

Correct AnswerverifiedShow Answer

In comparing a tariff and an import quota we find that:

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. Alpha's export supply is represented by:

Correct AnswerverifiedShow Answer

The North American Free Trade Agreement (NAFTA) :

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

"Dumping" of goods abroad:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which is not a commonly heard argument for protectionism?

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Refer to the diagrams below. Which of the following is a feasible rate at which X and Y might be exchanged?

Correct AnswerverifiedShow Answer

Production possibilities data for Gamma and Sigma. All data are in tons. Gamma production possibilities: Sigma production possibilities: -Refer to the above data. What are the limits of the terms of trade between Gamma and Sigma?

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 the equilibrium world price:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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. Alpha's export supply is represented by:

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