Question 1

-The following information is about the cost ratios for two products-fish (F) and chicken (C) -in Singsong and Harmony.Assume that production occurs under conditions of constant costs and these are the only two nations in the world.If in Singsong: 1F = 2C and,in Harmony: 1F = 4C then,in Singsong the domestic real cost of each chicken:

Accepted Answer

A)   is 1/2 a fish.
B)   is 2 fish.
C)   increases with the level of fish caught.
D)   decreases with the level of fish caught.E) A) and C)
F) B) and C)

Question 2

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Accepted Answer

A) True 
 B)False

Question 3

-Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The import demand curves for the two nations are represented by lines:

Accepted Answer

A)   5 and 6.
B)   5 and 7.
C)   6 and 8.
D)   7 and 8.E) A) and B)
F) None of the above

Question 4

The proponents of the cheap foreign labour argument mistakenly:

Accepted Answer

A)   look at the labour costs per unit rather than labour costs per hour.
B)   look at the labour costs per hour rather than labour costs per unit of output.
C)   believe that labour costs per unit are not important.
D)   believe that the wage rates in Canada should be reduced in order to compete with low-wage nations.E) None of the above
F) C) and D)

Question 5

The data in the tables below,show that production in:

Accepted Answer

A)   Germany is subject to increasing domestic opportunity costs and the U.S.to constant domestic opportunity costs.
B)   the U.S.is subject to increasing domestic opportunity costs and Germany to constant domestic opportunity costs.
C)   both Germany and the U.S.are subject to constant domestic opportunity costs.
D)   both Germany and the U.S.are subject to increasing domestic opportunity costs.E) A) and B)
F) C) and D)

Question 6

The long-run effect of tariffs is:

Accepted Answer

A)   an increase in domestic employment.
B)   an increase in export businesses.
C)   a reallocation of domestic workers from export industries to protected domestic industries.
D)   a reallocation of consumer spending to imported products over domestically-produced products.E) B) and D)
F) C) and D)

Question 7

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

Question 8

Production possibilities data for two countries,Alpha and Beta,which have populations of equal size.
 
-Refer to the above data.Assume the production possibilities in Beta double at alternatives A through E while remaining as shown in the table for Alpha.As a result Beta should:

Accepted Answer

A)   continue to specialize in producing chips.
B)   continue to specialize in fishing.
C)   no longer specialize and trade.
D)   specialize both in fishing and in producing chips and sell the surplus to Alpha.E) B) and C)
F) A) and D)

Question 9

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1.
 
-Refer to the above data.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Accepted Answer

A)   1 unit and 15 units.
B)   4 units and 7 units.
C)   7 units and 0 units.
D)   4 units and 6 units.E) C) and D)
F) All of the above

Question 10

Which products were the leading exports of Canada in 2014

Accepted Answer

A)   steel
B)   clothes
C)   industrial goods and materials
D)   petroleumE) A) and D)
F) B) and C)

Question 11

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1.
 
-Refer to the above data.The total amount of revenue collected from a $1 per unit tariff on this product will be:

Accepted Answer

A)   $22
B)   $8
C)   $7
D)   $14E) B) and D)
F) C) and D)

Question 12

Consider two countries which trade with each other.As these countries expand their production according to their comparative advantage,most probably they will experience:

Accepted Answer

A)   constant costs.
B)   high tariffs.
C)   decreasing costs.
D)   increasing costs.E) None of the above
F) A) and C)

Question 13

The major beneficiaries of a tariff on a product are the:

Accepted Answer

A)   domestic producers of the product.
B)   domestic consumers of the product.
C)   foreign consumers of the product.
D)   foreign producers of the product.E) A) and D)
F) None of the above

Question 14

The cheap foreign labour argument suggests that:

Accepted Answer

A)   to maintain its standard of living,Canada should not trade with low-wage countries.
B)   Canadian industries should develop policies to reduce their wage rates to compete with other countries.
C)   Canada should trade more with low-wage countries.
D)   Canada should use dumping policies to compete with low-wage countries.E) None of the above
F) B) and C)

Question 15

The law of increasing opportunity costs limits international specialization.

Accepted Answer

A) True 
 B)False

Question 16

The following shows the Production possibilities tables for two countries,Latalia and Trombonia:
 
-Refer to the above tables.Assume that before specialization and trade,Latalia produced combination C and Trombonia produced combination B.If these two nations now specialize completely in accordance with comparative advantage,the total gains from specialization and trade will be:

Accepted Answer

A)   4 tons of beans.
B)   1 ton of pork and 2 tons of beans.
C)   4 tons of pork.
D)   2 tons of pork and 4 tons of beans.E) A) and B)
F) All of the above

Question 17

Assuming labour forces of equal size,the production possibilities curves below suggest that West Mudsville has:

Accepted Answer

A)   lower wages than workers in East Mudsville before trade but equal wages after trade.
B)   absolute advantage over East Mudsville for both baseballs and,baseball hats.
C)   no advantage over East Mudsville.
D)   advantage of East Mudsville for baseballs and not baseball hats.E) A) and C)
F) A) and B)

Question 18

The fact that international specialization and trade based on comparative advantage can increase world output is reflected in the fact that:

Accepted Answer

A)   the production possibilities curve of any two nations are identical.
B)   a nation's production possibilities and trading possibilities lines coincide.
C)   a nation's trading possibilities line lies to the right of its production possibility
D)   a nation's production possibilities line lies to the right of its trading possibilities.E) All of the above
F) C) and D)

Question 19

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt will: A)  lower domestic price and increase domestic consumption. B)  increase the revenues of domestic producers by areas E + F + K. C)  increase the revenues of domestic producers by areas G + H. D)  increase the revenues of domestic producers by areas E + F + G + H + J." 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.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt will:

Accepted Answer

A)   lower domestic price and increase domestic consumption.
B)   increase the revenues of domestic producers by areas E + F + K.
C)   increase the revenues of domestic producers by areas G + H.
D)   increase the revenues of domestic producers by areas E + F + G + H + J.E) A) and B)
F) None of the above

Question 20

Refer to the diagram below,where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A quota of wy will: d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A quota of wy will:   A)  lower domestic price and increase domestic consumption. B)  increase the revenues of domestic producers by areas E + F + K. C)  increase the revenues of domestic producers by areas G + H. D)  increase the revenues of domestic producers by areas E + F + G + H + J." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)   lower domestic price and increase domestic consumption.
B)   increase the revenues of domestic producers by areas E + F + K.
C)   increase the revenues of domestic producers by areas G + H.
D)   increase the revenues of domestic producers by areas E + F + G + H + J.E) C) and D)
F) A) and B)

Exam 17: International Trade

Which products were the leading exports of Canada in 2014

Correct Answer
verified

The long-run effect of tariffs is:

Correct Answer
verified

-Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The import demand curves for the two nations are represented by lines:

Correct Answer
verified

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.S_d + Q is the product supply curve after an import quota is imposed.A tariff of P_cP_t will:

Correct Answer
verified

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct Answer
verified

The data in the tables below,show that production in:

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

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. -Refer to the above data.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Correct Answer
verified

Production possibilities data for two countries,Alpha and Beta,which have populations of equal size. -Refer to the above data.Assume the production possibilities in Beta double at alternatives A through E while remaining as shown in the table for Alpha.As a result Beta should:

Correct Answer
verified

Correct Answer
verified

The major beneficiaries of a tariff on a product are the:

Correct Answer
verified

The law of increasing opportunity costs limits international specialization.

Correct Answer
verified

Assuming labour forces of equal size,the production possibilities curves below suggest that West Mudsville has:

Correct Answer
verified

Consider two countries which trade with each other.As these countries expand their production according to their comparative advantage,most probably they will experience:

Correct Answer
verified

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. -Refer to the above data.The total amount of revenue collected from a $1 per unit tariff on this product will be:

Correct Answer
verified

The fact that international specialization and trade based on comparative advantage can increase world output is reflected in the fact that:

Correct Answer
verified

The proponents of the cheap foreign labour argument mistakenly:

Correct Answer
verified

The cheap foreign labour argument suggests that:

Correct Answer
verified

Refer to the diagram below,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.S_d + Q is the product supply curve after an import quota is imposed.A quota of wy will:

Correct Answer
verified

Exam 17: International Trade

Which products were the leading exports of Canada in 2014

Correct AnswerverifiedShow Answer

The long-run effect of tariffs is:

Correct AnswerverifiedShow Answer

-Refer to the above graph which shows the import demand and export supply curves for two nations that produce a product.The import demand curves for the two nations are represented by lines:

Correct AnswerverifiedShow Answer

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.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt will:

Correct AnswerverifiedShow Answer

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct AnswerverifiedShow Answer

The data in the tables below,show that production in:

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

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. -Refer to the above data.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Correct AnswerverifiedShow Answer

Production possibilities data for two countries,Alpha and Beta,which have populations of equal size. -Refer to the above data.Assume the production possibilities in Beta double at alternatives A through E while remaining as shown in the table for Alpha.As a result Beta should:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The major beneficiaries of a tariff on a product are the:

Correct AnswerverifiedShow Answer

The law of increasing opportunity costs limits international specialization.

Correct AnswerverifiedShow Answer

Assuming labour forces of equal size,the production possibilities curves below suggest that West Mudsville has:

Correct AnswerverifiedShow Answer

Consider two countries which trade with each other.As these countries expand their production according to their comparative advantage,most probably they will experience:

Correct AnswerverifiedShow Answer

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1. -Refer to the above data.The total amount of revenue collected from a $1 per unit tariff on this product will be:

Correct AnswerverifiedShow Answer

The fact that international specialization and trade based on comparative advantage can increase world output is reflected in the fact that:

Correct AnswerverifiedShow Answer

The proponents of the cheap foreign labour argument mistakenly:

Correct AnswerverifiedShow Answer

The cheap foreign labour argument suggests that:

Correct AnswerverifiedShow Answer

Refer to the diagram below,where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A quota of wy will:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

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.S_d + Q is the product supply curve after an import quota is imposed.A tariff of P_cP_t will:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Refer to the diagram below,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.S_d + Q is the product supply curve after an import quota is imposed.A quota of wy will:

Correct Answer
verified