Question 1

A common tool for restricting trade through quantity is:

Accepted Answer

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

Question 2

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

Accepted Answer

A)   lot of land relative to its population.
B)   large population relative to its landmass.
C)   higher opportunity cost of producing technology.
D)   large amount of capital equipment relative to its population.E) C) and D)
F) B) and D)

Question 3

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 economy,the amount being sold domestically is:

Accepted Answer

A)   45.
B)   85.
C)   120.
D)   75.E) A) and C)
F) A) and D)

Question 4

When each country specializes in producing the good for which it has a comparative advantage:

Accepted Answer

A)   both countries may benefit.
B)   both countries always enjoy equal gains from trade.
C)   the country that is bigger will gain more surplus.
D)   the country with the weaker economy will gain more surplus.E) B) and C)
F) None of the above

Question 5

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,which amount of surplus would be transferred?

Accepted Answer

A)   Area BC would be transferred to the consumer.
B)   Area BCD would be transferred to the producer.
C)   Area BCD would be transferred to the consumer.
D)   Area BC would be transferred to the producer.E) B) and C)
F) A) and B)

Question 6

Engaging in international trade has all of the following effects except:

Accepted Answer

A)   altering prices in different countries.
B)   influencing labor markets in different countries.
C)   increasing number of goods and services we can consumer in different countries.
D)   it makes use of resources less efficient.E) A) and B)
F) A) and C)

Question 7

This graph demonstrates the domestic demand and supply for a good,as well as a quota and the world price for that good.  As shown in the graph,when a government imposes a quota,the outcome differs from that of a tariff being imposed in that area:

Accepted Answer

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

Question 8

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)   the country must be large relative to other nations in the worldE) C) and D)
F) A) and B)

Question 9

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 this economy were to open to free trade,the domestic quantity demanded would be:

Accepted Answer

A)   250.
B)   500.
C)   1150.
D)   1500.E) B) and C)
F) A) and C)

Question 10

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 consumer surplus domestic consumers enjoy once a tariff has been imposed is:

Accepted Answer

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

Question 11

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

Accepted Answer

A)   Domestic producers
B)   Domestic consumers
C)   Foreign producers
D)   Foreign governments.E) All of the above
F) None of the above

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,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) None of the above
F) C) and D)

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 to engage in free trade,the good would:

Accepted Answer

A)   be imported.
B)   be exported.
C)   no longer be produced domestically.
D)   not be imported or exported and only be produced domestically.E) A) and D)
F) B) and C)

Question 14

A preference for policies that place limits on trade is called:

Accepted Answer

A)   liberalization.
B)   free trade.
C)   protectionism.
D)   autarky.E) B) and C)
F) B) and D)

Question 15

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 in autarky and decides to open trade with a tariff,the impact on domestic demand is they will:

Accepted Answer

A)   decrease consumption from 1500 to 1150.
B)   increase consumption from 815 to 1500.
C)   increase consumption from 815 to 1150.
D)   decrease consumption from 1500 to 815.E) None of the above
F) A) and C)

Question 16

An import quota is:

Accepted Answer

A)   a tax on the good or services that are imported.
B)   a limit on the amount of a particular good that can be exported.
C)   a limit on the amount of a particular good that can be imported.
D)   None of these is true.E) B) and C)
F) A) and C)

Question 17

A country with a lot of land relative to its population may have a comparative advantage in:

Accepted Answer

A)   capital-intensive activities.
B)   labor-intensive activities.
C)   land-intensive activities.
D)   technology-intensive activities.E) All of the above
F) B) and D)

Question 18

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)   60 at $10 each.
B)   60 at $17 each.
C)   115 at $14 each.
D)   150 at $10 each.E) B) and C)
F) A) and C)

Question 19

In general,one of the results of free trade is that the owners of domestically:

Accepted Answer

A)   scarce factors of production lose due to increased competition.
B)   abundant factors of production lose from increased demand.
C)   scarce factors of production win due to increased consumers.
D)   abundant factors of production win from decreased demand.E) A) and B)
F) All of the above

Question 20

A quota has all of the following impacts except:

Accepted Answer

A)   drive up prices.
B)   create deadweight loss.
C)   help poorer countries.
D)   generate revenues for government.E) None of the above
F) B) and D)

Exam 17: International Trade

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:

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

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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 amount of consumer surplus domestic consumers enjoy once a tariff has been imposed is:

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An import quota is:

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

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When each country specializes in producing the good for which it has a comparative advantage:

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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 engage in free trade,the good would:

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Engaging in international trade has all of the following effects except:

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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. As shown in the graph,when a government imposes a quota,the outcome differs from that of a tariff being imposed in that area:

Correct AnswerverifiedShow Answer

A country with a lot of land relative to its population may have a comparative advantage in:

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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 is operating in autarky and decides to open trade with a tariff,the impact on domestic demand is they 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 economy,the amount being sold domestically is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A preference for policies that place limits on trade is called:

Correct AnswerverifiedShow Answer

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

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In general,one of the results of free trade is that the owners of domestically:

Correct AnswerverifiedShow Answer

A common tool for restricting trade through quantity is:

Correct AnswerverifiedShow Answer

A quota has all of the following impacts except:

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,which amount of surplus would be transferred?

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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 this economy were to open to free trade,the domestic quantity demanded would be:

Correct AnswerverifiedShow Answer

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