Question 1

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) A) and B)
F) B) and D)

Question 2

Refer to the above diagrams.The solid lines are production possibilities curves; the dashed lines are trading possibilities curves.The opportunity cost of producing a:

Accepted Answer

A)  pizza is 2 beers in both countries.
B)  beer is 1/2 a pizza in both countries.
C)  pizza in East Lothian is 1 beer.
D)  beer in West Lothian is 1/2 a pizza.E) A) and D)
F) None of the above

Question 3

The bulk of Canadian export and import trade is with:

Accepted Answer

A)  Japan
B)  China
C)  the United States
D)  EnglandE) B) and C)
F) C) and D)

Question 4

Several new players have significantly expanded their share of world trade.These nations are:

Accepted Answer

A)  China, Taiwan, Malaysia, and Indonesia.
B)  China, Singapore, South Korea, and Taiwan.
C)  North Korea, China, Hong Kong, and Cambodia.
D)  Japan, China, South Korea, and Taiwan.E) B) and C)
F) None of the above

Question 5

The basic difference in the economic effects of a tariff compared with a quota is that a:

Accepted Answer

A)  quota generates revenue for the government.
B)  tariff generates revenue for the government.
C)  tariff raises product prices, but a quota does not raise product prices.
D)  quota raises product prices, but a tariff does not raise product prices.E) A) and D)
F) A) and B)

Question 6

Under GATT, tariffs on thousands of products were eliminated or reduced, with overall tariffs dropping by:

Accepted Answer

A)  33 percent.
B)  40 percent.
C)  25 percent.
D)  51 percent.E) A) and D)
F) C) and D)

Question 7

In effect tariffs on imports are:

Accepted Answer

A)  special taxes on domestic producers.
B)  subsidies to domestic consumers.
C)  subsidies to foreign producers.
D)  subsidies for domestic producers.E) A) and B)
F) A) and C)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Question 10

Comparative advantage can result from different climates, natural resource endowments, and capital stocks in various countries.

Accepted Answer

A) True 
 B)False

Question 11

The nation which has a comparative advantage in a particular product will be the only world exporter of that product.

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

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. 1/3 unit of corn and should not specialize in production of it if the two nations decide to trade with each other. C) corn is 5 units of rice. D) corn is 1/5 unit of rice." class="answers-bank-image d-inline" rel="preload" > Refer to the above data, in country Wat, the comparative cost of 1 unit of:

Accepted Answer

A)  rice is 3 units of corn.
B)  rice is 1/3 unit of corn and should not specialize in production of it if the two nations decide to trade with each other.
C)  corn is 5 units of rice.
D)  corn is 1/5 unit of rice.E) A) and B)
F) B) and C)

Question 14

The production possibilities curves below suggest that:

Accepted Answer

A)  West Mudsville should specialize in, and export, baseball bats.
B)  West Mudsville should specialize in, and export, both baseballs and baseball bats.
C)  East Mudsville should specialize in, and export, baseball bats.
D)  workers will try to immigrate from West Mudsville to East Mudsville.E) B) and D)
F) A) and D)

Question 15

The major difference between a tariff and a quota on an imported product is that a tariff produces revenue for the government.

Accepted Answer

A) True 
 B)False

Question 16

Which country did Canada sign a free-trade agreement with in 2008?

Accepted Answer

A)  South Korea
B)  Columbia
C)  Brazil
D)  ArgentinaE) B) and D)
F) A) and C)

Question 17

Americans will neither export nor import aluminum when its:

Accepted Answer

A)  domestic price equals the world price.
B)  export supply curve lies above its import demand curve.
C)  export supply curve is upward sloping.
D)  import demand curve is downward sloping.E) All of the above
F) None 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 higher than $1 because at $1: A) Beta wants to import more than Alpha. B) Alpha wants to export more than Beta. C) both nations want to export steel. D) both nations want to import steel." class="answers-bank-image d-inline" rel="preload" > Refer to the above data.The equilibrium world price must be higher than $1 because at $1:

Accepted Answer

A)  Beta wants to import more than Alpha.
B)  Alpha wants to export more than Beta.
C)  both nations want to export steel.
D)  both nations want to import steel.E) A) and B)
F) A) and C)

Question 19

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.Beta would prefer terms of trade at, or close to, 1X = 1 1/2 Y.

Accepted Answer

A) True 
 B)False

Question 20

The "increased-domestic-employment" argument for tariff protection holds that:

Accepted Answer

A)  domestic inflation is a desirable policy goal because it stimulates exports.
B)  domestic deflation is a desirable policy goal because it stimulates imports.
C)  an increase in tariffs will reduce net exports and stimulate domestic employment.
D)  an increase in tariffs will increase net exports and stimulate domestic employment.E) None of the above
F) All of the above

Exam 17: Part B: International Trade

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

In effect tariffs on imports are:

Correct Answer
verified

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

Correct Answer
verified

The "increased-domestic-employment" argument for tariff protection holds that:

Correct Answer
verified

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 above data, in country Wat, the comparative cost of 1 unit of:

Correct Answer
verified

Several new players have significantly expanded their share of world trade.These nations are:

Correct Answer
verified

Refer to the above diagrams.The solid lines are production possibilities curves; the dashed lines are trading possibilities curves.The opportunity cost of producing a:

Correct Answer
verified

The basic difference in the economic effects of a tariff compared with a quota is that a:

Correct Answer
verified

Correct Answer
verified

The nation which has a comparative advantage in a particular product will be the only world exporter of that product.

Correct Answer
verified

The bulk of Canadian export and import trade is with:

Correct Answer
verified

Under GATT, tariffs on thousands of products were eliminated or reduced, with overall tariffs dropping by:

Correct Answer
verified

Which country did Canada sign a free-trade agreement with in 2008?

Correct Answer
verified

The major difference between a tariff and a quota on an imported product is that a tariff produces revenue for the government.

Correct Answer
verified

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

Comparative advantage can result from different climates, natural resource endowments, and capital stocks in various countries.

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 higher than $1 because at $1:

Correct Answer
verified

Americans will neither export nor import aluminum when its:

Correct Answer
verified

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

Correct Answer
verified

The production possibilities curves below suggest that:

Correct Answer
verified

Exam 17: Part B: International Trade

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

In effect tariffs on imports are:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The "increased-domestic-employment" argument for tariff protection holds that:

Correct AnswerverifiedShow Answer

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 above data, in country Wat, the comparative cost of 1 unit of:

Correct AnswerverifiedShow Answer

Several new players have significantly expanded their share of world trade.These nations are:

Correct AnswerverifiedShow Answer

Refer to the above diagrams.The solid lines are production possibilities curves; the dashed lines are trading possibilities curves.The opportunity cost of producing a:

Correct AnswerverifiedShow Answer

The basic difference in the economic effects of a tariff compared with a quota is that a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The nation which has a comparative advantage in a particular product will be the only world exporter of that product.

Correct AnswerverifiedShow Answer

The bulk of Canadian export and import trade is with:

Correct AnswerverifiedShow Answer

Under GATT, tariffs on thousands of products were eliminated or reduced, with overall tariffs dropping by:

Correct AnswerverifiedShow Answer

Which country did Canada sign a free-trade agreement with in 2008?

Correct AnswerverifiedShow Answer

The major difference between a tariff and a quota on an imported product is that a tariff produces revenue for the government.

Correct AnswerverifiedShow Answer

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

Comparative advantage can result from different climates, natural resource endowments, and capital stocks in various countries.

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 higher than $1 because at $1:

Correct AnswerverifiedShow Answer

Americans will neither export nor import aluminum when its:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The production possibilities curves below suggest that:

Correct AnswerverifiedShow 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 higher than $1 because at $1:

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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