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,surplus would:

Accepted Answer

A)  increase overall.
B)  decrease for the producer.
C)  transfer from producer to consumer.
D)  All of these are true.E) A) and D)
F) None of the above

Question 2

Comparative advantage is the ability to produce:

Accepted Answer

A)  more of a good than others with a given amount of resources.
B)  relatively more than any other good with a given amount of resources.
C)  a good or service at a lower opportunity cost than others can.
D)  None of these is true.E) C) and D)
F) All of the above

Question 3

For a single country to influence the price of some good in the global market:

Accepted Answer

A)  it must be considered a price taker.
B)  the quantity it produces and consumes must be small relative to the total amount of that good bought and sold worldwide.
C)  the quantity it produces and consumes must be large relative to the total amount of that good bought and sold worldwide.
D)  None of these is true.E) All of the above
F) None of the above

Question 4

Both countries can benefit from trade when:

Accepted Answer

A)  at least one country produces the good for which it has an absolute advantage.
B)  each specializes in producing the good for which it has a comparative advantage.
C)  each specializes in producing the good for which it has an absolute advantage.
D)  It is not possible for both countries to benefit.E) A) and B)
F) A) and C)

Question 5

Absolute advantage is the ability to produce:

Accepted Answer

A)  more of a good than others with a given amount of resources.
B)  relatively more than any other good with a given amount of resources.
C)  a good or service at a lower opportunity cost than others can.
D)  None of these is true.E) A) and B)
F) A) and C)

Question 6

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,when this economy was open to free trade without restriction,the amount imported was:

Accepted Answer

A)  1250.
B)  900.
C)  650.
D)  1000.E) C) and D)
F) A) and D)

Question 7

Only a firm with ______________ will be able to make their output profitably.

Accepted Answer

A)  a comparative advantage at producing their output
B)  the highest opportunity cost of production
C)  an absolute advantage at producing their output
D)  None of these is true.E) C) and D)
F) A) and B)

Question 8

Import standards on specific countries 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) B) and C)
F) A) and D)

Question 9

The restriction or prohibition of trade in order to put political pressure on a country is:

Accepted Answer

A)  an embargo.
B)  a tariff.
C)  unfair practice.
D)  a source of quota rent.E) A) and B)
F) None of the above

Question 10

Americans whose jobs have been lost to freer trade should,in theory:

Accepted Answer

A)  be able to find new jobs,given time.
B)  leave the workforce,in the long run.
C)  gain surplus,as the income effect outweighs the price effect of their labor.
D)  None of these is true.E) A) and D)
F) All of the above

Question 11

Suppose a country,whose production and consumption of coffee is large relative to the world market,has just entered the global market.If the country is a net exporter of coffee,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) All of the above
F) A) and D)

Question 12

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 autarky,and decides to open trade with a tariff,the impact on domestic supply is:

Accepted Answer

A)  they will increase output from 250 to 500.
B)  they will decrease output from 815 to 500.
C)  they will increase output from 500 to 815.
D)  they will decrease output from 1500 to 1150.E) All of the above
F) None of the above

Question 13

As a general rule,free trade:

Accepted Answer

A)  increases demand for factors of production that are domestically abundant.
B)  increases the supply of factors of production that are domestically abundant.
C)  decreases the supply of factors of production that are domestically scarce.
D)  decreases the demand for factors of production that are domestically abundant.E) A) and B)
F) A) and C)

Question 14

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 equilibrium price would be:

Accepted Answer

A)  $10.
B)  $14.
C)  $17.
D)  $4.E) A) and B)
F) None of the above

Question 15

A country may gain a temporary comparative advantage if:

Accepted Answer

A)  it is the first to discover and implement a new technology or production process.
B)  it remains self-sufficient until it stockpiles enough inventory to supply the world.
C)  it remains a political ally to all.
D)  All of these are true.E) C) and D)
F) A) and B)

Question 16

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 open to free trade,how many units would be imported?

Accepted Answer

A)  60
B)  115
C)  150
D)  90E) A) and B)
F) All of the above

Question 17

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 surplus enjoyed by domestic consumers with free trade before the tariff is area:

Accepted Answer

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

Question 18

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

Accepted Answer

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

Question 19

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,this economy has imposed a quota of:

Accepted Answer

A)  650.
B)  900.
C)  1150.
D)  1500.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 were depicting an autarky,the amount being sold domestically is:

Accepted Answer

A)  60.
B)  115.
C)  160.
D)  90.E) C) and D)
F) A) and C)

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 open to free trade,how many units would be imported?

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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,when this economy was open to free trade without restriction,the amount imported was:

Correct AnswerverifiedShow Answer

As a general rule,free trade:

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 equilibrium price would be:

Correct AnswerverifiedShow Answer

For a single country to influence the price of some good in the global market:

Correct AnswerverifiedShow Answer

Only a firm with ______________ will be able to make their output profitably.

Correct AnswerverifiedShow Answer

Absolute advantage is the ability to produce:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Both countries can benefit from trade when:

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,surplus would:

Correct AnswerverifiedShow Answer

Comparative advantage is the ability to produce:

Correct AnswerverifiedShow Answer

Americans whose jobs have been lost to freer trade should,in theory:

Correct AnswerverifiedShow Answer

A country may gain a temporary comparative advantage if:

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 autarky,and decides to open trade with a tariff,the impact on domestic supply is:

Correct AnswerverifiedShow Answer

The restriction or prohibition of trade in order to put political pressure on a country is:

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,this economy has imposed a quota of:

Correct AnswerverifiedShow Answer

Import standards on specific countries usually address issues affecting:

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 surplus enjoyed by domestic consumers with free trade before the tariff is area:

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 sold domestically is:

Correct AnswerverifiedShow Answer

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