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.Alpha should specialize in Y and Beta in X.

Accepted Answer

A) True 
 B)False

Question 2

Production possibilities data for Gamma and Sigma.All data are in tons.
Gamma production possibilities:
  Sigma production possibilities:
 
-On the basis of the above information:

Accepted Answer

A)   Gamma should export both tea and pots to Sigma.
B)   Sigma should export tea to Gamma and Gamma should export pots to Sigma.
C)   Gamma should export tea to Sigma and Sigma should export pots to Gamma.
D)   Gamma should export tea to Sigma,but it will not be profitable for the two nations to exchange pots.E) B) and C)
F) A) and B)

Question 3

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) None of the above
F) All of the above

Question 4

-A nation's export supply curve for a specific product:

Accepted Answer

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

Question 5

Which is responsible for the major decrease in trade barriers since World War II?

Accepted Answer

A)   the North American Free Trade Agreement
B)   the General Agreement on Tariffs and Trade
C)   the granting of most-favoured nation status
D)   the World Trade OrganizationE) None of the above
F) All of the above

Question 6

Refer to the data below.Assume that before specialization and trade Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage,the gains from specialization and trade will be:
Production possibilities data for Gamma and Sigma.All data are in tons.
Gamma production possibilities: 
Sigma production possibilities:

Accepted Answer

A)   40 tons of pots.
B)   20 tons of tea and 20 tons of pots.
C)   20 tons of tea.
D)   40 tons of tea.E) A) and B)
F) A) and C)

Question 7

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 D)
F) All of the above

Question 8

The World Trade Organization was established by Canada to advocate strategic trade policy.

Accepted Answer

A) True 
 B)False

Question 9

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

Question 10

The "infant industry" argument for tariffs is criticized:

Accepted Answer

A)   because it is difficult to determine which industries merit protection.
B)   because direct subsidies are probably a better means of stimulating such industries.
C)   because the tariffs may remain after the industry reaches maturity.
D)   for all of the above reasons.E) A) and B)
F) A) and C)

Question 11

Nations Quirk and Turk can produce aluminum and oil in the following maximum quantities when all of their resources are fully employed. 
Which one of the following terms of trade is most likely to produce exchange between the two nations?

Accepted Answer

A)   .5 unit of oil for 1 unit of aluminum
B)   .5 unit of oil for 2 units of aluminum
C)   1 unit of oil for .4 unit of aluminum
D)   1 unit of oil for 5 units of aluminumE) A) and B)
F) B) and C)

Question 12

-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 of this product is $1,this nation will:

Accepted Answer

A)   export all of the product.
B)   import all of the product.
C)   import some of the product and produce some of the product domestically.
D)   neither export nor import the product.E) B) and D)
F) B) and C)

Question 13

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

Question 14

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that:

Accepted Answer

A)   labour costs and product prices are not related.
B)   there is no discernible relationship between wage rates and labour productivity.
C)   wage rates and labour productivity are directly related.
D)   wage rates and labour productivity are inversely related.E) A) and D)
F) B) and D)

Question 15

-In a two-nation model,the equilibrium world price will occur where:

Accepted Answer

A)   one nation's export supply curve intersects the other nation's import demand curve.
B)   both nations' exports are exactly twice the level of imports.
C)   both nations' export supply curves are horizontal.
D)   both nations' import demand curves are vertical.E) None of the above
F) A) and D)

Question 16

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

Question 17

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) None of the above
F) All of the above

Question 18

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

Question 19

Production possibilities data for two countries,Alpha and Beta,which have populations of equal size.
 
-Refer to the above data.Beta:

Accepted Answer

A)   should specialize in catching fish and trade with Alpha for chips.
B)   should specialize in producing chips and trade with Alpha for fish.
C)   will not realize gains from specialization and trade.
D)   will export both fish and chips to Alpha.E) A) and C)
F) B) 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 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) A) and D)
F) None of the above

Exam 17: International Trade

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

Correct Answer
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A protective tariff will:

Correct Answer
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-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 of this product is $1,this nation will:

Correct Answer
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Correct Answer
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Production possibilities data for Gamma and Sigma.All data are in tons. Gamma production possibilities: Sigma production possibilities: -On the basis of the above information:

Correct Answer
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Which is not a commonly heard argument for protectionism?

Correct Answer
verified

The North American Free Trade Agreement (NAFTA) :

Correct Answer
verified

The World Trade Organization was established by Canada to advocate strategic trade policy.

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

-A nation's export supply curve for a specific product:

Correct Answer
verified

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

Correct Answer
verified

The "infant industry" argument for tariffs is criticized:

Correct Answer
verified

-In a two-nation model,the equilibrium world price will occur where:

Correct Answer
verified

Which is responsible for the major decrease in trade barriers since World War II?

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 of P_cP_t,the total amount of tariff revenue collected on this product will be:

Correct Answer
verified

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.Alpha should specialize in Y and Beta in X.

Correct Answer
verified

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is 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.The equilibrium world price must be lower than $4 because at $4:

Correct Answer
verified

Nations Quirk and Turk can produce aluminum and oil in the following maximum quantities when all of their resources are fully employed. Which one of the following terms of trade is most likely to produce exchange between the two nations?

Correct Answer
verified

Production possibilities data for two countries,Alpha and Beta,which have populations of equal size. -Refer to the above data.Beta:

Correct Answer
verified

Exam 17: International Trade

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

Correct AnswerverifiedShow Answer

A protective tariff will:

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 of this product is $1,this nation will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Production possibilities data for Gamma and Sigma.All data are in tons. Gamma production possibilities: Sigma production possibilities: -On the basis of the above information:

Correct AnswerverifiedShow Answer

Which is not a commonly heard argument for protectionism?

Correct AnswerverifiedShow Answer

The North American Free Trade Agreement (NAFTA) :

Correct AnswerverifiedShow Answer

The World Trade Organization was established by Canada to advocate strategic trade policy.

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

-A nation's export supply curve for a specific product:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The "infant industry" argument for tariffs is criticized:

Correct AnswerverifiedShow Answer

-In a two-nation model,the equilibrium world price will occur where:

Correct AnswerverifiedShow Answer

Which is responsible for the major decrease in trade barriers since World War II?

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

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.Alpha should specialize in Y and Beta in X.

Correct AnswerverifiedShow Answer

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is 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.The equilibrium world price must be lower than $4 because at $4:

Correct AnswerverifiedShow Answer

Nations Quirk and Turk can produce aluminum and oil in the following maximum quantities when all of their resources are fully employed. Which one of the following terms of trade is most likely to produce exchange between the two nations?

Correct AnswerverifiedShow Answer

Production possibilities data for two countries,Alpha and Beta,which have populations of equal size. -Refer to the above data.Beta:

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

Correct Answer
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Correct 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 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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Correct Answer
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Correct Answer
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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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Correct Answer
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