Question 1

In Figure 35.1,what is the opportunity cost of motorcycles in Japan?

Accepted Answer

A)  1/2 of a DVD player per motorcycle.
B)  1 DVD player per motorcycle.
C)  2 DVD players per motorcycle.
D)  3 DVD players per motorcycle.E) A) and B)
F) B) and D)

Question 2

If a country does not engage in trade with other countries,it is known as

Accepted Answer

A)  An open economy.
B)  A trade deficit economy.
C)  A closed economy.
D)  A trade surplus economy.E) B) and C)
F) A) and D)

Question 3

If a country is completely self-reliant in producing goods for its own consumption needs,then

Accepted Answer

A)  It consumes more than it can with trade.
B)  Its consumption possibilities equal its production possibilities.
C)  It promotes specialization.
D)  It achieves a higher standard of living by exporting.E) A) and C)
F) All of the above

Question 4

Over a given period of time,if exports are greater than imports,the result is

Accepted Answer

A)  A trade war.
B)  A trade deficit.
C)  An embargo.
D)  A trade surplus.E) All of the above
F) A) and B)

Question 5

Table 35.1   Country  Tons of Soybeans  Computer  China 100300 United States 150750\begin{array} { | l | c | c | } \hline { 	ext { Country } } & 	ext { Tons of Soybeans } & 	ext { Computer } \\hline 	ext { China } & 100 & 300 \\hline 	ext { United States } & 150 & 750 \\hline\end{array} Country  China  United States ​ Tons of Soybeans 100150​ Computer 300750​​  Based on the information in Table 35.1,assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods.For trade to be mutually beneficial for both countries,the terms of trade will be such that 1 ton of soybeans will exchange for

Accepted Answer

A)  More than 3 computers but less than 5.
B)  More than 1/5 of a computer but less than 1/3.
C)  Less than 3 computers.
D)  Zero computers. E) B) and C)
F) A) and D)

Question 6

A country will not trade unless

Accepted Answer

A)  It has an absolute advantage.
B)  The terms of trade are superior to domestic opportunities.
C)  Its balance of trade is in a surplus position.
D)  The production possibilities increase.E) B) and D)
F) B) and C)

Question 7

Protectionism achieves which of the following goals?

Accepted Answer

A)  Greater consumption possibilities through greater specialization.
B)  Protection of infant industries.
C)  Protection of comparative advantage.
D)  Protection of absolute advantage.E) None of the above
F) All of the above

Question 8

Suppose China can produce either 600 telephones or 400 DVD players,and Japan can produce either 400 telephones or 200 DVD players.Implicitly,China has

Accepted Answer

A)  A comparative but not necessarily an absolute advantage in DVD players.
B)  An absolute but not necessarily a comparative advantage in DVD players.
C)  Both an absolute and a comparative advantage in DVD players.
D)  Neither a comparative nor an absolute advantage in DVD players.E) B) and D)
F) B) and C)

Question 9

When quotas are eliminated,losers include

Accepted Answer

A)  There are no losers when free international trade is established.
B)  Domestic producers.
C)  Foreign producers.
D)  Domestic consumers.E) A) and B)
F) All of the above

Question 10

An embargo is a prohibition against trading particular goods.

Accepted Answer

A) True 
 B)False

Question 11

The infant industry argument can be justified because

Accepted Answer

A)  A new industry may never develop in a protected,noncompetitive environment.
B)  The government may not be able politically to end protectionism even when protectionism is no longer justified.
C)  Government may choose to protect industries,which places heavy import burdens on the economy.
D)  A new industry may be difficult to start in the face of existing foreign competition.E) B) and C)
F) A) and D)

Question 12

The primary purpose of NAFTA is to

Accepted Answer

A)  Encourage the development of the Mexican and Canadian economies at the expense of U.S.workers and consumers.
B)  Protect U.S.and Canadian workers from unfair competition from Mexico.
C)  Increase income in Mexico,Canada,and the United States by encouraging free trade.
D)  Ensure that there are no losers as the result of trade agreements between Mexico,Canada,and the United States.E) B) and C)
F) None of the above

Question 13

A beggar-thy-neighbor policy is

Accepted Answer

A)  The imposition of import barriers for the purpose of curbing inflation.
B)  The imposition of trade barriers to increase domestic employment.
C)  The imposition of trade barriers for the purpose of expanding exports.
D)  An attempt by a poor country to get more foreign aid and assistance.E) A) and B)
F) A) and C)

Question 14

Which of the following statements is true for the two countries illustrated in Figure 35.1?

Accepted Answer

A)  Japan has an absolute advantage in motorcycles.
B)  The United States has a comparative advantage in DVD players.
C)  Japan has an absolute advantage in motorcycles,the United States in DVD players.
D)  The United States has a comparative advantage in motorcycles,Japan in DVD players.E) None of the above
F) B) and D)

Question 15

According to the text,which of the following does the United States export?

Accepted Answer

A)  Cars and cigarettes but not corn.
B)  Lumber but not farm equipment.
C)  Cars,cigarettes,corn,farm equipment,and services.
D)  Cars,cigarettes,corn,and farm equipment,but not education.E) A) and B)
F) A) and C)

Question 16

Assume Belgium can produce 5 units of good X or 2 units of good Y.Germany can produce 4 units of good X or 3 units of good Y.What would be the terms of trade between Belgium and Germany for 1 unit of good Y?

Accepted Answer

A)  Between 4 and 5 units of X.
B)  Between 4/3 and 5/2 units of X.
C)  Between 4/3 and 5 units of X.
D)  Between 5/2 and 4 units of X.E) B) and D)
F) A) and C)

Question 17

What is a multilateral trade pact? Discuss the first one that was formed and what its impact has been.

Accepted Answer

A multilateral trade pact is a group of ...

Question 18

In terms of the world as a whole,imports must equal exports because

Accepted Answer

A)  The United Nations requires it.
B)  It is part of international law.
C)  Most countries,other than the United States,have a balanced trade situation.
D)  Every good exported by one country becomes an import for another country.E) C) and D)
F) None of the above

Question 19

Describe the pressures that discourage trade.

Accepted Answer

One pressure occurs because trade hurts ...

Question 20

What should happen to the equilibrium price and quantity in a market as a result of a tariff on imports?

Accepted Answer

A)  Equilibrium price and quantity should both go up.
B)  Equilibrium price should go up,and equilibrium quantity should go down.
C)  Equilibrium price should go down,and equilibrium quantity should go up.
D)  Equilibrium price and quantity should both go down.E) B) and C)
F) A) and B)

Exam 35: International Trade

Correct Answer
verified

Protectionism achieves which of the following goals?

Correct Answer
verified

Suppose China can produce either 600 telephones or 400 DVD players,and Japan can produce either 400 telephones or 200 DVD players.Implicitly,China has

Correct Answer
verified

If a country is completely self-reliant in producing goods for its own consumption needs,then

Correct Answer
verified

A beggar-thy-neighbor policy is

Correct Answer
verified

In terms of the world as a whole,imports must equal exports because

Correct Answer
verified

A country will not trade unless

Correct Answer
verified

An embargo is a prohibition against trading particular goods.

Correct Answer
verified

What should happen to the equilibrium price and quantity in a market as a result of a tariff on imports?

Correct Answer
verified

Describe the pressures that discourage trade.

Correct Answer
verified
One pressure occurs because trade hurts ...
View Answer

What is a multilateral trade pact? Discuss the first one that was formed and what its impact has been.

Correct Answer
verified
A multilateral trade pact is a group of ...
View Answer

If a country does not engage in trade with other countries,it is known as

Correct Answer
verified

The infant industry argument can be justified because

Correct Answer
verified

Assume Belgium can produce 5 units of good X or 2 units of good Y.Germany can produce 4 units of good X or 3 units of good Y.What would be the terms of trade between Belgium and Germany for 1 unit of good Y?

Correct Answer
verified

Over a given period of time,if exports are greater than imports,the result is

Correct Answer
verified

In Figure 35.1,what is the opportunity cost of motorcycles in Japan?

Correct Answer
verified

According to the text,which of the following does the United States export?

Correct Answer
verified

When quotas are eliminated,losers include

Correct Answer
verified

Which of the following statements is true for the two countries illustrated in Figure 35.1?

Correct Answer
verified

The primary purpose of NAFTA is to

Correct Answer
verified

Exam 35: International Trade

Correct AnswerverifiedShow Answer

Protectionism achieves which of the following goals?

Correct AnswerverifiedShow Answer

Suppose China can produce either 600 telephones or 400 DVD players,and Japan can produce either 400 telephones or 200 DVD players.Implicitly,China has

Correct AnswerverifiedShow Answer

If a country is completely self-reliant in producing goods for its own consumption needs,then

Correct AnswerverifiedShow Answer

A beggar-thy-neighbor policy is

Correct AnswerverifiedShow Answer

In terms of the world as a whole,imports must equal exports because

Correct AnswerverifiedShow Answer

A country will not trade unless

Correct AnswerverifiedShow Answer

An embargo is a prohibition against trading particular goods.

Correct AnswerverifiedShow Answer

What should happen to the equilibrium price and quantity in a market as a result of a tariff on imports?

Correct AnswerverifiedShow Answer

Describe the pressures that discourage trade.

Correct AnswerverifiedOne pressure occurs because trade hurts ...View AnswerShow Answer

What is a multilateral trade pact? Discuss the first one that was formed and what its impact has been.

Correct AnswerverifiedA multilateral trade pact is a group of ...View AnswerShow Answer

If a country does not engage in trade with other countries,it is known as

Correct AnswerverifiedShow Answer

The infant industry argument can be justified because

Correct AnswerverifiedShow Answer

Assume Belgium can produce 5 units of good X or 2 units of good Y.Germany can produce 4 units of good X or 3 units of good Y.What would be the terms of trade between Belgium and Germany for 1 unit of good Y?

Correct AnswerverifiedShow Answer

Over a given period of time,if exports are greater than imports,the result is

Correct AnswerverifiedShow Answer

In Figure 35.1,what is the opportunity cost of motorcycles in Japan?

Correct AnswerverifiedShow Answer

According to the text,which of the following does the United States export?

Correct AnswerverifiedShow Answer

When quotas are eliminated,losers include

Correct AnswerverifiedShow Answer

Which of the following statements is true for the two countries illustrated in Figure 35.1?

Correct AnswerverifiedShow Answer

The primary purpose of NAFTA is to

Correct AnswerverifiedShow Answer

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One pressure occurs because trade hurts ...
View Answer

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A multilateral trade pact is a group of ...
View Answer

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Correct Answer
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Correct Answer
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