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.The terms of trade will be at or within the 1X = 1 1/2 Y to 1X = 2/3 Y range.

Accepted Answer

A) True 
 B)False

Question 2

Since World War II, several factors have contributed to the rapid growth of international trade.These factors are:

Accepted Answer

A)  transportation technology, general increase in tariffs, and differences among nations in terms of production cost.
B)  transportation and communications technologies, and the general decline in the level of tariffs.
C)  transportation technology, reductions in the number of participants, and the general increase in the level of tariffs.
D)  communication technology, general increase in the level of tariffs, and the transportation technology.E) B) and D)
F) C) and D)

Question 3

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Accepted Answer

A)  Germany, Great Britain, and Denmark.
B)  Germany, Denmark, and Sweden.
C)  Great Britain, Denmark, and Sweden.
D)  France, Germany, and Sweden.E) A) and B)
F) A) and C)

Question 4

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

Accepted Answer

A)  reduced tariffs and liberalized government rules restricting international trade in services.
B)  established the World Bank.
C)  expanded the European Union by four nations.
D)  established a free trade zone between Canada, the United States, and Mexico.E) B) and C)
F) All of the above

Question 5

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.With a PcPt per unit tariff, per unit revenue received by domestic and foreign producers respectively will be: A) Pc and Pa. B) Pa and Pc. C) Pa and Pt. D) Pt and Pc." 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 PcPt per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

Accepted Answer

A)  Pc and Pa.
B)  Pa and Pc.
C)  Pa and Pt.
D)  Pt and Pc.E) B) and D)
F) A) and B)

Question 6

Barriers to free trade impair efficiency in the international allocation of resources.

Accepted Answer

A) True 
 B)False

Question 7

The impact of increasing, as opposed to constant costs is to:

Accepted Answer

A)  intensify and prolong the comparative advantages which any nation may have initially.
B)  expand the limits of the terms of trade.
C)  cause the basis for further specialization to disappear as nations specialize in accordance with comparative advantage.
D)  cause nations to realize economies of scale in those products in which they specialize.E) B) and C)
F) A) and D)

Question 8

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

Accepted Answer

A)  quota.
B)  tariff.
C)  export restriction.
D)  price ceiling.E) C) and D)
F) B) and D)

Question 9

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

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 in the amount PcPt, price and total quantity sold will be: A) Pt and x. B) Pc and z. C) Pt and y. D) Pa and x." 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 in the amount PcPt, price and total quantity sold will be:

Accepted Answer

A)  Pt and x.
B)  Pc and z.
C)  Pt and y.
D)  Pa and x.E) None of the above
F) A) and B)

Question 11

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

Question 12

When the distribution of resources and technology changes among nations:

Accepted Answer

A)  it costs more to produce all products.
B)  the relative efficiency of producing products changes.
C)  it costs less to produce all products.
D)  each nation will specialize in producing one product.E) A) and C)
F) None of the above

Question 13

Consider two countries which trade with each other.The degree of specialization according to their respective comparative advantages will be greater if the countries face:

Accepted Answer

A)  constant costs.
B)  high tariffs.
C)  low unemployment rates.
D)  increasing costs.E) B) and C)
F) All of the above

Question 14

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

Question 15

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

Question 16

Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  clothing
B)  wool
C)  sunflower seeds
D)  chemicalsE) B) and D)
F) None of the above

Question 18

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) C) and D)

Question 19

Dumping is the sale of a product in a foreign market:

Accepted Answer

A)  at a price below its domestic price or cost of production.
B)  that does not meet the quality standards in the domestic market.
C)  and is the principal means used to enforce nontariff barriers.
D)  and is encouraged by voluntary export restraints.E) A) and B)
F) All of the above

Question 20

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 $2: A) Alpha will want to import 20 units of steel. B) Beta will want to export 20 units of steel. C) Alpha will want to export 20 units of steel. D) neither country will want to import steel." class="answers-bank-image d-inline" rel="preload" > Refer to the above data.At a world price of $2:

Accepted Answer

A)  Alpha will want to import 20 units of steel.
B)  Beta will want to export 20 units of steel.
C)  Alpha will want to export 20 units of steel.
D)  neither country will want to import steel.E) C) and D)
F) All of the above

Exam 17: B: International Trade

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Correct Answer
verified

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

Correct Answer
verified

A tariff can best be described as:

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 $2:

Correct Answer
verified

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

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 a per unit tariff in the amount P_cP_t, price and total quantity sold will be:

Correct Answer
verified

When the distribution of resources and technology changes among nations:

Correct Answer
verified

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

Correct Answer
verified

Since World War II, several factors have contributed to the rapid growth of international trade.These factors are:

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

Correct Answer
verified

Dumping is the sale of a product in a foreign market:

Correct Answer
verified

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

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 a P_cP_t per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

Correct Answer
verified

In the real world, specialization is rarely complete because:

Correct Answer
verified

Consider two countries which trade with each other.The degree of specialization according to their respective comparative advantages will be greater if the countries face:

Correct Answer
verified

Barriers to free trade impair efficiency in the international allocation of resources.

Correct Answer
verified

Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.

Correct Answer
verified

The impact of increasing, as opposed to constant costs is to:

Correct Answer
verified

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

Correct Answer
verified

Exam 17: B: International Trade

As of 2011, 16 out of 27 members of the EU use the Euro as a common currency.The 3 countries that have opted out of the common currency are:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A tariff can best be described as:

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 $2:

Correct AnswerverifiedShow Answer

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

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 in the amount PcPt, price and total quantity sold will be:

Correct AnswerverifiedShow Answer

When the distribution of resources and technology changes among nations:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Since World War II, several factors have contributed to the rapid growth of international trade.These factors are:

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

Correct AnswerverifiedShow Answer

Dumping is the sale of a product in a foreign market:

Correct AnswerverifiedShow Answer

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

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 PcPt per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

Correct AnswerverifiedShow Answer

In the real world, specialization is rarely complete because:

Correct AnswerverifiedShow Answer

Consider two countries which trade with each other.The degree of specialization according to their respective comparative advantages will be greater if the countries face:

Correct AnswerverifiedShow Answer

Barriers to free trade impair efficiency in the international allocation of resources.

Correct AnswerverifiedShow Answer

Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.

Correct AnswerverifiedShow Answer

The impact of increasing, as opposed to constant costs is to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.At a world price of $2:

Correct Answer
verified

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 a per unit tariff in the amount P_cP_t, price and total quantity sold will be:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

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 a P_cP_t per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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