Question 1

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 B)
F) A) and C)

Question 2

The data given is for two hypothetical nations,Wat and Xat.The nations have the Production Possibilities Curves (PPC) for units of rice and corn as given below.
 
-Refer to the diagram below in which,line AB is the Canadian production possibility curve and AC is its trading possibilities curve.We can conclude that Canada:

Accepted Answer

A)   has chosen to specialize in the production of cheese.
B)   has chosen to specialize in the production of beef.
C)   has decided to trade beef for cheese.
D)   is relatively more efficient than its trading partners in producing both cheese and beef.E) All of the above
F) A) and B)

Question 3

The following is the Production possibilities data for two countries,Alpha and Beta,which have populations of equal size.
 
-The above data show that:

Accepted Answer

A)   Beta has a comparative advantage in producing chips.
B)   Alpha has a comparative advantage in catching fish.
C)   Alpha is subject to constant costs and Beta is subject to increasing costs.
D)   Beta is more efficient than Alpha.E) C) and D)
F) None of the above

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Given the following production possibilities schedules,it can be seen that:

Accepted Answer

A)   France has a comparative advantage in producing wine.
B)   Germany can produce more machines than France.
C)   France has a comparative advantage in producing machines.
D)   Germany can produce more of both goods than France.E) None of the above
F) All of the above

Question 6

A nation's import demand curve for a specific product:

Accepted Answer

A)   is upsloping.
B)   shows the amount of the product it will import at prices below its domestic price.
C)   lies above its export supply curve for the product.
D)   depends on domestic demand for the product,but not on domestic supply.E) B) and C)
F) All of the above

Question 7

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 D)
F) A) and C)

Question 8

The statement that "tariffs are needed to protect Canadian firms from foreign producers which sell excess goods in the Canadian market at less than cost" would be most closely associated with which tariff argument?

Accepted Answer

A)   cheap foreign labour
B)   protection against dumping
C)   diversification for stability
D)   increased domestic employmentE) B) and C)
F) C) and D)

Question 9

The following shows the Production possibilities tables for two countries,Latalia and Trombonia:
 
-Refer to the above tables.If these two nations specialize on the basis of comparative advantage:

Accepted Answer

A)   Trombonia will produce beans and Latalia will produce pork.
B)   Trombonia will produce both beans and pork.
C)   Latalia will produce both beans and pork and Trombonia will produce neither.
D)   Latalia will produce beans and Trombonia will produce pork.E) B) and C)
F) A) and C)

Question 10

-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) None of the above
F) C) and D)

Question 11

-Refer to the above diagram pertaining to two nations and a specific product.The equilibrium level of exports and imports occurs at:

Accepted Answer

A)   H,where GB and FC intersect.
B)   J,where the vertical distance between A and B just equals the vertical distance between C and D
C)   world price level
D)   world price level.E) A) and B)
F) None of the above

Question 12

Refer to the diagrams below.The solid lines are production possibilities curves;the dashed lines are trading possibilities curves.The trading possibilities curves suggest that the terms of trade are:

Accepted Answer

A)   1.5 beers for 1 pizza.
B)   1 beer for 2 pizzas.
C)   2 beers for 1 pizza.
D)   1 beer for 1.5 pizzas.E) B) and C)
F) All of the above

Question 13

Which combination of policies would entail the greatest stimulus to domestic employment and output in the short run?

Accepted Answer

A)   raising trade barriers on imports and subsidizing exports
B)   raising trade barriers on imports and imposing special taxes on exports
C)   lowering trade barriers on imports and imposing special taxes on exports
D)   lowering trade barriers on imports and subsidizing exportsE) A) and D)
F) B) and C)

Question 14

Which is a valid counterargument to the infant industry argument for protective tariffs?

Accepted Answer

A)   It results in too many benefits for domestic firms that export goods and services.
B)   It is difficult to determine which infant industries will become mature industries with a comparative advantage.
C)   The objective would be better achieved through strategic trade policy.
D)   The objective would be better achieved by import quotas and nontariff barriers.E) B) and D)
F) None of the above

Question 15

A licensing requirement,or unreasonable standard pertaining to the product quality and safety for a product that is imported into a country,is an example of:

Accepted Answer

A)   protective tariffs.
B)   nontariff barriers.
C)   voluntary export restrictions.
D)   quotas on imported products.E) All of the above
F) A) and B)

Question 16

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) A) and B)

Question 17

Which of the following is one of the trade liberalizations proposed by the World Trade Organization (WTO) ?

Accepted Answer

A)   better use of strategic trade policy
B)   more widespread use of diversification-for-stability as the case for protection
C)   increase in the use of quotas to replace tariffs to improve economic efficiency.
D)   reduction in agricultural subsidies that distort trade.E) C) and D)
F) B) and C)

Question 18

In terms of absolute volume,world trade is dominated by:

Accepted Answer

A)   Japan,Germany,and China.
B)   the United States,England,and China.
C)   Germany,England,and France.
D)   Germany,the United States,and China.E) None of the above
F) B) and C)

Question 19

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:

Accepted Answer

A)   Singsong will both produce chicken and catch fish.
B)   Harmony will both produce chicken and catch fish.
C)   Harmony will produce chicken and Singsong will catch fish.
D)   Singsong will produce chicken and Harmony will catch fish.E) C) and D)
F) A) and C)

Question 20

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be: A)  v and vz. B)  w and wy. C)  w and wz. D)  vx and xz." 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 free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Accepted Answer

A)   v and vz.
B)   w and wy.
C)   w and wz.
D)   vx and xz.E) B) and C)
F) None of the above

Exam 17: International Trade

The statement that "tariffs are needed to protect Canadian firms from foreign producers which sell excess goods in the Canadian market at less than cost" would be most closely associated with which tariff argument?

Correct Answer
verified

Which combination of policies would entail the greatest stimulus to domestic employment and output in the short run?

Correct Answer
verified

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

Correct Answer
verified

Given the following production possibilities schedules,it can be seen that:

Correct Answer
verified

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:

Correct Answer
verified

The following is the Production possibilities data for two countries,Alpha and Beta,which have populations of equal size. -The above data show that:

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

In the real world,specialization is rarely complete because:

Correct Answer
verified

Which of the following is one of the trade liberalizations proposed by the World Trade Organization (WTO) ?

Correct Answer
verified

In terms of absolute volume,world trade is dominated by:

Correct Answer
verified

-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 free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Correct Answer
verified

Correct Answer
verified

The following shows the Production possibilities tables for two countries,Latalia and Trombonia: -Refer to the above tables.If these two nations specialize on the basis of comparative advantage:

Correct Answer
verified

A nation's import demand curve for a specific product:

Correct Answer
verified

Which is a valid counterargument to the infant industry argument for protective tariffs?

Correct Answer
verified

Refer to the diagrams below.The solid lines are production possibilities curves;the dashed lines are trading possibilities curves.The trading possibilities curves suggest that the terms of trade are:

Correct Answer
verified

A licensing requirement,or unreasonable standard pertaining to the product quality and safety for a product that is imported into a country,is an example of:

Correct Answer
verified

-Refer to the above diagram pertaining to two nations and a specific product.The equilibrium level of exports and imports occurs at:

Correct Answer
verified

Regional free-trade zones refers to a:

Correct Answer
verified

-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

Exam 17: International Trade

The statement that "tariffs are needed to protect Canadian firms from foreign producers which sell excess goods in the Canadian market at less than cost" would be most closely associated with which tariff argument?

Correct AnswerverifiedShow Answer

Which combination of policies would entail the greatest stimulus to domestic employment and output in the short run?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Given the following production possibilities schedules,it can be seen that:

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

The following is the Production possibilities data for two countries,Alpha and Beta,which have populations of equal size. -The above data show that:

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

In the real world,specialization is rarely complete because:

Correct AnswerverifiedShow Answer

Which of the following is one of the trade liberalizations proposed by the World Trade Organization (WTO) ?

Correct AnswerverifiedShow Answer

In terms of absolute volume,world trade is dominated by:

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 free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The following shows the Production possibilities tables for two countries,Latalia and Trombonia: -Refer to the above tables.If these two nations specialize on the basis of comparative advantage:

Correct AnswerverifiedShow Answer

A nation's import demand curve for a specific product:

Correct AnswerverifiedShow Answer

Which is a valid counterargument to the infant industry argument for protective tariffs?

Correct AnswerverifiedShow Answer

Refer to the diagrams below.The solid lines are production possibilities curves;the dashed lines are trading possibilities curves.The trading possibilities curves suggest that the terms of trade are:

Correct AnswerverifiedShow Answer

A licensing requirement,or unreasonable standard pertaining to the product quality and safety for a product that is imported into a country,is an example of:

Correct AnswerverifiedShow Answer

-Refer to the above diagram pertaining to two nations and a specific product.The equilibrium level of exports and imports occurs at:

Correct AnswerverifiedShow Answer

Regional free-trade zones refers to a:

Correct AnswerverifiedShow Answer

-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

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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 free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Correct Answer
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Correct Answer
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Correct Answer
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