Question 1

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 producers would have to cut:

Accepted Answer

A)  production by 55 units.
B)  production by 90 units.
C)  prices by $3.
D)  prices by $7.E) A) and D)
F) C) and D)

Question 2

Voluntary exchanges:

Accepted Answer

A)  generate surplus,leaving both participants better off than they were before.
B)  generate deadweight loss,leaving both participants worse off than they were before.
C)  generate deadweight loss,leaving at least one participant worse off than they were before.
D)  create a transfer of surplus from one participant to another.E) None of the above
F) All of the above

Question 3

Exports are goods and services that are:

Accepted Answer

A)  produced in other countries and consumed domestically.
B)  produced domestically and consumed in other countries.
C)  produced and consumed in other countries.
D)  produced and consumers domestically.E) B) and D)
F) All of the above B

Question 4

International trade:

Accepted Answer

A)  is efficiency-enhancing.
B)  will increase total surplus only if the country is a net-importer of a particular good.
C)  will increase total surplus only if the country is a net-exporter of a particular good.
D)  will decrease total surplus,which creates a role for government.E) A) and B)
F) A) and C)

Question 5

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,once this economy decides to restrict it free trade,it creates deadweight loss equal to area(s) :

Accepted Answer

A)  F and H.
B)  DFGH.
C)  FGH.
D)  G.E) A) and B)
F) A) and C)

Question 6

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,the amount consumed domestically would:

Accepted Answer

A)  increase by 35.
B)  increase by 90.
C)  decrease by 35.
D)  decrease by 90.E) A) and D)
F) A) and B)

Question 7

If Colombia has a comparative advantage over Mexico in the production of coffee,it means:

Accepted Answer

A)  Colombia probably sells coffee to Mexico.
B)  Mexico is more productive at making coffee than Colombia.
C)  Colombia has the ability to produce more coffee than Mexico with the same resources.
D)  None of these is true.E) A) and D)
F) A) and C)

Question 8

If Japan has an absolute advantage over the United States in making TVs,it means:

Accepted Answer

A)  Japan probably sells TVs to the United States.
B)  Japan is more productive at making TVs than the United States,when both countries use the same quantity of resources in TV production.
C)  Japan has the ability to produce TVs at a lower opportunity cost than the United States.
D)  None of these is true.E) A) and D)
F) All of the above

Question 9

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 producers would:

Accepted Answer

A)  transfer surplus in area BC to consumers.
B)  transfer surplus in area BCD to foreign producers.
C)  lose surplus in area BCD to foreign consumers.
D)  None of these is true.E) C) and D)
F) A) and B) D

Question 10

As workforces become more educated in countries with comparative advantage in labor-intensive products,the comparative advantage for the production of those goods:

Accepted Answer

A)  shifts toward other countries with more cheap labor relative to the other factors of production.
B)  shifts toward other countries with less cheap labor relative to the other factors of production.
C)  shifts away from countries with more cheap labor relative to other factors of production.
D)  None of these is true.E) A) and B)
F) None of the above

Question 11

In reality,trade requires:

Accepted Answer

A)  governments to get together and agree on who is going to specialize in what.
B)  governments employ an economic super-planner to crunch the numbers to find comparative advantage for different products.
C)  that the day-to-day business decision making is carried out almost entirely by firms and individuals,not by governments.
D)  None of these is true.E) B) and C)
F) C) and D)

Question 12

When a nation imposes a blanket standard on imports,it refers to:

Accepted Answer

A)  policies that impose standards imposed on all imports.
B)  policies that impose standards on specific countries.
C)  policies that restrict the importation of specific goods.
D)  All of these are true.E) C) and D)
F) B) 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,the amount of deadweight loss created by the imposition of a tariff is area:

Accepted Answer

A)  IL
B)  JK
C)  IJKL
D)  FGJKE) B) and D)
F) A) and B) A

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. 
Once an economy decides to impose a quota,as is the case in the graph shown,the outcome differs from that of a tariff being imposed in that:

Accepted Answer

A)  area G represents quota rents instead of tax revenues.
B)  area F and H are deadweight loss instead of transferred surplus.
C)  area E represents tax revenues instead of transferred surplus.
D)  None of these is true.E) A) and D)
F) B) and C)

Question 15

A country is likely to have a comparative advantage in a capital-intensive activity if it has:

Accepted Answer

A)  a lot of land relative to its population.
B)  a large amount of capital relative to its landmass.
C)  a higher opportunity cost of producing technology.
D)  None of these is true.E) C) and D)
F) B) and C)

Question 16

When we say that a country enjoys gains from trade,we mean:

Accepted Answer

A)  everyone in that country benefits from the trade.
B)  the net gain of surplus is positive for that country.
C)  the total producer surplus increased in the country.
D)  the total consumer surplus increased in the country.E) B) and C)
F) All of the above

Question 17

For the most part,in the real world,trade between countries:

Accepted Answer

A)  is free.
B)  is regulated or restricted in some way.
C)  is free,with the notable exception of China.
D)  None of these is true.E) A) and B)
F) All of the above

Question 18

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,if this economy opens itself to free trade,producer surplus will:

Accepted Answer

A)  decrease to area I.
B)  decrease to area EI.
C)  increase to EI.
D)  increase to ABCDEFGH.E) A) and B)
F) All of the above

Question 19

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 were depicting an autarky,the amount being bought domestically is:

Accepted Answer

A)  45 at $11 each.
B)  45 at $23 each.
C)  85 at $16 each.
D)  120 at $23 each.E) A) and B)
F) B) and C)

Question 20

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 become a free trade nation,this good would:

Accepted Answer

A)  be imported.
B)  be exported.
C)  no longer be produced domestically.
D)  not imported or exported,but only produced domestically.E) C) and D)
F) None of the above

Exam 17: International Trade

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 producers would have to cut:

Correct AnswerverifiedShow Answer

Voluntary exchanges:

Correct AnswerverifiedShow Answer

Exports are goods and services that are:

Correct AnswerverifiedB

International trade:

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,once this economy decides to restrict it free trade,it creates deadweight loss equal to area(s) :

Correct AnswerverifiedShow Answer

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,the amount consumed domestically would:

Correct AnswerverifiedShow Answer

If Colombia has a comparative advantage over Mexico in the production of coffee,it means:

Correct AnswerverifiedShow Answer

If Japan has an absolute advantage over the United States in making TVs,it means:

Correct AnswerverifiedShow Answer

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 producers would:

Correct AnswerverifiedD

As workforces become more educated in countries with comparative advantage in labor-intensive products,the comparative advantage for the production of those goods:

Correct AnswerverifiedShow Answer

In reality,trade requires:

Correct AnswerverifiedShow Answer

When a nation imposes a blanket standard on imports,it refers to:

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 deadweight loss created by the imposition of a tariff is area:

Correct AnswerverifiedA

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good. Once an economy decides to impose a quota,as is the case in the graph shown,the outcome differs from that of a tariff being imposed in that:

Correct AnswerverifiedShow Answer

A country is likely to have a comparative advantage in a capital-intensive activity if it has:

Correct AnswerverifiedShow Answer

When we say that a country enjoys gains from trade,we mean:

Correct AnswerverifiedShow Answer

For the most part,in the real world,trade between countries:

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,if this economy opens itself to free trade,producer surplus will:

Correct AnswerverifiedShow Answer

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 were depicting an autarky,the amount being bought domestically 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 to the graph shown,if this economy were to become a free trade nation,this good would:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified