Question 1

The increase in welfare in both countries that results from specialization and trade is called:

Accepted Answer

A)  gains from trade.
B)  surplus enhancement.
C)  exportation surplus.
D)  deadweight gain.E) B) and D)
F) B) and C)

Question 2

The effect of quotas is:

Accepted Answer

A)  to drive up prices.
B)  to create deadweight loss.
C)  to help poorer countries.
D)  All of these are true.E) A) and C)
F) B) and D)

Question 3

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were an autarky,consumers would get area:

Accepted Answer

A)  A in consumer surplus.
B)  ABC in consumer surplus.
C)  ABCDE in consumer surplus.
D)  ABCDEFG in consumer surplus.E) B) and D)
F) A) and D)

Question 4

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,the original world price is _______ and the amount of the tariff is _________.

Accepted Answer

A)  $100;$30
B)  $100;$130
C)  $175;$45
D)  $215;$115E) B) and C)
F) B) and D)

Question 5

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According the graph shown,if this economy were open to free trade,it would:

Accepted Answer

A)  import this good because the domestic price is greater than the world price.
B)  export this good because the domestic price is greater than the world price.
C)  import this good because the world price is greater than the domestic price.
D)  export this good because the world price is greater than the domestic price.E) A) and C)
F) None of the above

Question 6

When a country has the ability to produce more of a good than others with a given amount of resources,they:

Accepted Answer

A)  have an absolute advantage.
B)  have a comparative advantage.
C)  are free-traders.
D)  should remain self-sufficient.E) None of the above
F) A) and D)

Question 7

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,if the economy were operating under autarky,then moved to free trade,the overall impact on surplus would be:

Accepted Answer

A)  a net gain of FGIJKL.
B)  a net loss of FGIJKL.
C)  a net gain of FGJK.
D)  a net loss of FGJK.E) A) and B)
F) All of the above

Question 8

Every government has its own set of policies to govern the economy such as:

Accepted Answer

A)  safety policies.
B)  labor standards.
C)  environmental regulations.
D)  All of these are true.E) C) and D)
F) B) and D)

Question 9

We might predict that Hawaii has a comparative advantage compared to Russia in the production of pineapples because:

Accepted Answer

A)  Hawaii's climate is more suitable.
B)  Hawaii has more land available to grow them on.
C)  Hawaii has more advanced farming technology.
D)  All of these are true.E) A) and B)
F) A) and D)

Question 10

Gains from trade are:

Accepted Answer

A)  the increase in welfare in both countries that results from specialization and trade.
B)  the transfer of surplus by the receiving country that results from trade.
C)  the deadweight loss by the losing country that results from trade.
D)  the increased skills and human capital that results from specialization and trade.E) B) and D)
F) A) and D)

Question 11

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were to open to trade,domestic prices would:

Accepted Answer

A)  remain $16 for domestically produced goods,and be $23 for those units imported.
B)  increase to $23 for all units.
C)  remain $16,with more units sold overall.
D)  None of these is true.E) All of the above
F) A) and B)

Question 12

A common tool for restricting trade is:

Accepted Answer

A)  a quota.
B)  a tariff.
C)  lengthening the import paperwork process.
D)  All of these would restrict trade.E) A) and B)
F) A) and C)

Question 13

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,if the economy was operating under free trade,who would be in favor of a tariff?

Accepted Answer

A)  Domestic producers
B)  Domestic consumers
C)  Foreign producers
D)  All of these groups would be in favor of such a restriction on trade.E) A) and B)
F) All of the above

Question 14

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good. 
According to the graph shown,the amount bought by domestic consumers when there is open trade for this good is:

Accepted Answer

A)  1500.
B)  1150
C)  500.
D)  250.E) B) and C)
F) B) and D)

Question 15

Blanket standards on imports usually address issues affecting:

Accepted Answer

A)  domestic consumers.
B)  domestic producers.
C)  foreign production practices.
D)  They can be used to address any of these.E) C) and D)
F) A) and B)

Question 16

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,if the economy was operating under free trade,who would be opposed to a tariff?

Accepted Answer

A)  Foreign producers
B)  Domestic consumers
C)  Foreign consumers
D)  All of these groups would be opposed to such a restriction on trade.E) A) and B)
F) A) and C)

Question 17

Suppose a country,whose production and consumption of cell phones is large relative to the world market,has just entered the global market.If the country is a net-importer of cell phones,we would expect:

Accepted Answer

A)  the world supply curve to shift more to the right than the world demand curve as a result.
B)  the world supply curve to shift more to the left than the world demand curve as a result.
C)  the world demand curve to shift more to the right than the world supply curve as a result.
D)  the world demand curve to shift more to the left than the world supply curve as a result.E) A) and B)
F) A) and C)

Question 18

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,if this economy were open to free trade,and decided to impose a tariff,the domestic quantity supplied would increase from:

Accepted Answer

A)  250 to 500.
B)  815 to 1500.
C)  815 to 1150.
D)  250 to 815.E) All of the above
F) C) and D)

Question 19

We call an economy that is self-contained and does not engage in any trade with outsiders:

Accepted Answer

A)  an autarky.
B)  an oligopoly.
C)  an oligarchy.
D)  a monarchy.E) C) and D)
F) A) and B)

Question 20

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,the amount of consumer surplus domestic consumers enjoy once a tariff has been imposed is:

Accepted Answer

A)  A
B)  ABC
C)  ABCDEFG
D)  ABCDEFGHIJKLE) A) and D)
F) A) and C)

Exam 17: International Trade

Gains from trade are:

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Every government has its own set of policies to govern the economy such as:

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Suppose a country,whose production and consumption of cell phones is large relative to the world market,has just entered the global market.If the country is a net-importer of cell phones,we would expect:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if this economy were open to free trade,and decided to impose a tariff,the domestic quantity supplied would increase from:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,the amount of consumer surplus domestic consumers enjoy once a tariff has been imposed is:

Correct AnswerverifiedShow Answer

The effect of quotas is:

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A common tool for restricting trade is:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According the graph shown,if this economy were open to free trade,it would:

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This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,domestic prices would:

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This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were an autarky,consumers would get area:

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Blanket standards on imports usually address issues affecting:

Correct AnswerverifiedShow Answer

We call an economy that is self-contained and does not engage in any trade with outsiders:

Correct AnswerverifiedShow Answer

We might predict that Hawaii has a comparative advantage compared to Russia in the production of pineapples because:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,the original world price is _______ and the amount of the tariff is _________.

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy was operating under free trade,who would be opposed to a tariff?

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy were operating under autarky,then moved to free trade,the overall impact on surplus would be:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good. According to the graph shown,the amount bought by domestic consumers when there is open trade for this good is:

Correct AnswerverifiedShow Answer

The increase in welfare in both countries that results from specialization and trade is called:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy was operating under free trade,who would be in favor of a tariff?

Correct AnswerverifiedShow Answer

When a country has the ability to produce more of a good than others with a given amount of resources,they:

Correct AnswerverifiedShow Answer

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This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,the original world price is _ and the amount of the tariff is ___.

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