Question 1

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) A) and B)
F) All of the above

Question 2

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)   receive additional surplus of BCD.E) A) and B)
F) C) and D)

Question 3

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 government can restrict trade by imposing a quota of:

Accepted Answer

A)   350.
B)   900.
C)   1150.
D)   1500.E) A) and B)
F) A) and C)

Question 4

Voluntary exchanges between ____________ generates surplus.

Accepted Answer

A)   firms
B)   countries
C)   individuals
D)   All of these are true.E) A) and B)
F) A) and C)

Question 5

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

Accepted Answer

A)   leave the workforce, in the long run.
B)   gain surplus, as the income effect outweighs the price effect of their labor.
C)   be able to find new jobs, given time.
D)   have extended bouts of unemployment due to static job skills.E) A) and B)
F) All of the above

Question 6

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 is operating under free trade,who would be in favor of a tariff?

Accepted Answer

A)   Domestic producers
B)   Domestic consumers
C)   Foreign producers
D)   Foreign governments.E) C) and D)
F) A) and D)

Question 7

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)   increase for the consumer.E) C) and D)
F) All of the above

Question 8

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)   decrease to $11 for all units.E) B) and C)
F) A) and D)

Question 9

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

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)   Mexico should trade coffee to Colombia.E) B) and D)
F) B) and C)

Question 10

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 the government restricts free trade,area G represents:

Accepted Answer

A)   quota rents, which go to domestic producers.
B)   quota rents, which go to foreign firms or governments.
C)   government tax revenues, which go to the domestic government.
D)   government tax revenues, which go to the foreign government.E) B) and D)
F) B) and C)

Question 11

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 open to free trade,the domestic quantity supplied would:

Accepted Answer

A)   drop from 815 to 500.
B)   drop from 815 to 250.
C)   increase from 250 to 500.
D)   increase from 815 to 1500.E) C) and D)
F) B) and D)

Question 12

The problem of inconsistent standards across nations can be managed by:

Accepted Answer

A)   policymakers making explicit laws about imports for specific countries.
B)   consumers making voluntary purchasing decisions.
C)   policymakers making blanket standards imposed on all imports.
D)   All of these are true.E) A) and D)
F) B) and C)

Question 13

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,domestic producers would produce how many units?

Accepted Answer

A)   60
B)   115
C)   150
D)   90E) B) and C)
F) B) and D)

Question 14

A common tool for restricting trade through taxation is:

Accepted Answer

A)   a tariff.
B)   immigration restrictions.
C)   international waters use policies.
D)   quota.E) B) and C)
F) A) and C)

Question 15

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

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

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,if the economy were operating under free trade and then imposed a tariff,the overall impact on surplus would be a net:

Accepted Answer

A)   gain of IJKL.
B)   loss of IJKL.
C)   loss of IL.
D)   gain of FGHIJKL.E) A) and B)
F) A) and C)

Question 18

Gains from trade are the:

Accepted Answer

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

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 economy were to open to trade,consumers would:

Accepted Answer

A)   enjoy a net gain to surplus of DEFG.
B)   suffer a net loss to surplus of DEFG.
C)   suffer a transfer of surplus to the producer of DEFG.
D)   experience deadweight loss of FG.E) C) and D)
F) B) and D)

Question 20

Who is likely to be in favor of a country that would be a net-importer if it moved from autarky to free trade?

Accepted Answer

A)   Domestic producers
B)   Domestic consumers
C)   Foreign consumers
D)   Foreign governments.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,surplus 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 producers would have to cut:

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

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A common tool for restricting trade through taxation is:

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Who is likely to be in favor of a country that would be a net-importer if it moved from autarky to free trade?

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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,if the government restricts free trade,area G represents:

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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,if the economy were operating under free trade and then imposed a tariff,the overall impact on surplus would be a net:

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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 open to free trade,domestic producers would produce how many units?

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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 a tariff and the world price for that good. According to the graph shown,if the economy were open to free trade,the domestic quantity supplied would:

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Gains from trade are the:

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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 producers would:

Correct AnswerverifiedShow Answer

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

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 is operating under free trade,who would be in favor of a tariff?

Correct AnswerverifiedShow Answer

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

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

Voluntary exchanges between ____________ generates surplus.

Correct AnswerverifiedShow Answer

The problem of inconsistent standards across nations can be managed by:

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,consumers would:

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 government can restrict trade by imposing a quota of:

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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