Quiz 8: International Trade

Goods and services purchased from abroad are _____,while goods and services sold abroad are _____. A)always been positive. B)always been negative. C)shown an increase in exports as a ratio of world production since 2005. D)shown occasional declines but has generally remained positive.

As measured by a percentage of the entire economic output: A)foreign trade is just as important for the United States as it is for most other countries. B)foreign trade is more important for the United States than it is for most other countries. C)foreign trade is less important for the United States than it is for many other countries. D)the United States ranks highest in the world.

France and England both produce wine and clothing with constant opportunity costs.France will have a comparative advantage in wine production if: A)it can produce more wine than England. B)its labor productivity in wine production is greater than England's. C)the absolute cost of producing wine is lower in France than in England. D)the opportunity cost of wine production is lower in France than in England.

In a single year,the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Belgium can raise 50 tons of beef or produce 750 boxes of tulips.From this information,we know that: A)the Netherlands has a comparative advantage in raising beef. B)the Netherlands has a comparative advantage in raising tulips. C)Belgium has a comparative advantage in raising beef. D)Belgium has an absolute advantage in raising beef.

In a Ricardian model of international trade,the production possibility frontiers are _____,indicating that the opportunity cost of increasing the production of one item relative to another _____. A)convex;is constant B)concave;increases C)straight lines;is constant D)straight lines;decreases

France and England both produce wine and cloth with constant opportunity costs.France can produce 150 barrels of wine if it produces no cloth or 100 bolts of cloth if it produces no wine.England can produce 50 barrels of wine if it produces no cloth or 100 bolts of cloth if it produces no wine.Using this information,we can conclude that: A)France has a comparative advantage in cloth production. B)England has a comparative advantage in cloth production. C)France has a comparative advantage in both goods. D)mutually beneficial international trade is not possible.

In a single year,the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Belgium can raise 50 tons of beef or produce 750 boxes of tulips.In autarky,the opportunity cost of beef: A)is higher in the Netherlands than in Belgium. B)is lower in the Netherlands than in Belgium. C)is the same in the Netherlands as in Belgium. D)cannot be determined in either country.

In a single year,the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Belgium can raise 50 tons of beef or produce 750 boxes of tulips.In autarky,the opportunity cost of 1 ton of beef in the Netherlands is: A)100 tons of beef. B)1,000 boxes of tulips. C)10 boxes of tulips. D)0.1 box of tulips.

Production possibility frontiers: A)illustrate the production choices available to an economy. B)assume full employment but not maximum efficiency. C)assume maximum efficiency but not full employment. D)are used to illustrate the law of decreasing opportunity costs.

The absolute value of the slope of the production possibility frontier at any point: A)gives the autarky price of the good on the vertical axis. B)is found by dividing the horizontal change by a vertical change. C)gives the quantity of the good on the vertical axis that must be given up to produce an additional unit of the good on the horizontal axis. D)gives the autarky price of the good on the horizontal axis relative to the autarky price of the good on the vertical axis.

Britain must give up the production of 75 hats to produce 25 additional sweaters.The opportunity cost of producing 3 hats is _____ sweater(s). A)1 B)3 C)22 D)28

Britain must give up the production of 75 hats to produce 25 additional sweaters.The opportunity cost of producing 4 sweaters is _____ hats. A)4 B)12 C)71 D)79

The United States must give up the production of 500 bicycles to produce 20 additional tractors.The opportunity cost of producing 100 bicycles is _____ tractor(s). A)1 B)4 C)25 D)100

The United States must give up the production of 500 bicycles to produce 20 additional tractors.The opportunity cost of producing 5 tractors is _____ bicycles. A)5 B)20 C)100 D)125

On a production possibility frontier,opportunity cost is: A)the decrease in the output of one good when the output of the other good is increased. B)the rate at which people are willing to exchange goods as determined by demand and supply. C)the dollar cost of the good given up to get another good. D)independent of the slope of the curve.

(Table: The Production Possibilities for Cars and Leather Boots)Use Table: The Production Possibilities for Cars and Leather Boots.Given the opportunity costs of production: A)there is no basis for trade. B)Mexico should specialize in boots. C)the United States should specialize in cars. D)the United States should specialize in both goods,and Mexico should not produce either good.

(Table: The Production Possibilities for Cars and Leather Boots)Use Table: The Production Possibilities for Cars and Leather Boots.The opportunity cost of producing one car in Mexico is: A)500 pairs of leather boots. B)1,000 pairs of leather boots. C)different from the opportunity cost in the United States. D)2,000 pairs of leather boots,which is the same as in the United States.

The _____ model analyzes trade under the assumption that opportunity costs are constant and therefore production possibility frontiers are straight lines. A)pauper labor fallacy B)Ricardian C)Heckscher-Ohlin D)oligopoly

If the opportunity costs of production are constant,then the production possibility frontier is: A)bowed out from the origin. B)bowed in toward the origin. C)a straight line. D)circular.

The term autarky refers to a situation when a country: A)trades goods and services based on the principle of comparative advantage. B)trades goods and services based on the principle of absolute advantage. C)trades goods and services based on the principle of Ricardian advantage. D)does not trade with other countries.

Japan must give up the production of 75 computers to produce 25 additional cellular telephones.The opportunity cost of producing 3 computers is _____ cell phone(s). A)1 B)3 C)22 D)28

If Japan must give up the production of 75 computers to produce 25 additional cellular telephones,the opportunity cost of producing 4 cellular telephones is _____ computers. A)4 B)12 C)71 D)79

The United States must give up the production of 300 motorcycles to produce 15 additional SUVs with the same resources.The opportunity cost of producing 100 motorcycles is _____ SUV(s). A)1 B)5 C)7 D)15

The United States must give up the production of 300 motorcycles to produce 20 additional SUVs with the same resources.In this case,the opportunity cost of producing 5 SUVs is ________ motorcycles. A)5 B)20 C)100 D)75

Use the following to answer questions 25-30: -(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost of _____ is _____ in the United States as (than)in Mexico. A)petroleum;less B)petroleum;more C)petroleum;the same D)machinery;the same

Use the following to answer questions 25-30: -(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost of _____ is _____ in the United States as (than)in Mexico. A)machinery;more B)machinery;the same C)machinery;less D)petroleum;less

Use the following to answer questions 25-30: -(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.In the United States the opportunity cost of producing 40 units of machinery is _____ units of petroleum. A)80 B)60 C)40 D)20

Use the following to answer questions 25-30: -(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost in the United States of producing 30 units of petroleum is _____ units of machinery. A)60 B)80 C)100 D)120

Use the following to answer questions 25-30: -(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost in Mexico of producing 10 units of machinery is _____ units of petroleum. A)30 B)90 C)180 D)270

Use the following to answer questions 25-30: -(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost in Mexico of producing 105 units of petroleum is _____ units of machinery. A)35 B)70 C)90 D)160

Countries that engage in trade will tend to specialize in goods in which they have a(n)_____ and will _____ those goods. A)comparative advantage;import B)absolute advantage;export C)comparative advantage;export D)economic profit;import

Taken collectively,people in nations that engage in international trade are NOT likely to: A)consume more than they were able to consume in the absence of trade. B)raise their standards of living. C)gain from lower opportunity costs of production. D)be made worse off.

In a single year,the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Belgium can raise 50 tons of beef or produce 750 boxes of tulips.Trade will take place between these two countries if 1 ton of beef costs _____ boxes of tulips. A)20 B)5 C)12 D)8

France and England both produce wine and cloth with constant opportunity costs.France can produce 150 barrels of wine if it produces no cloth or 100 bolts of cloth if it produces no wine.England can produce 50 barrels of wine if it produces no cloth or 150 bolts of cloth if it produces no wine.When international trade takes place,each country specializes completely in the production of the good in which it has a comparative advantage: 1 barrel of wine exchanges for 1 bolt of cloth and France exports 50 units of wine.We can conclude that France produces _____ units of wine and _____ units of cloth and that France consumes _____ units of wine and _____ units of cloth. A)150;100;100;100 B)150;0;100;50 C)150;0;50;50 D)0;100;50;50

If the United States can produce 30 computers for every car it produces and Japan can produce 15 computers for every car it produces,_____ has the _____ advantage in car production. A)the United States;comparative B)Japan;comparative C)the United States;absolute D)Japan;absolute

The United States can produce 30 computers for every car it produces,and Japan can produce 15 computers for every car it produces.Based on this information,which statement is INCORRECT? A)The United States should specialize in computer production. B)Japan has the comparative advantage in car production. C)There will be gains from trade if the United States exports computers to Japan. D)Japan has an absolute advantage in car production.

The belief that trade must be bad for exporting countries because the foreign workers are paid very low wages by our standards is the _____ fallacy. A)pauper labor B)sweatshop labor C)third-world country D)Nike

Saudi Arabia has a tremendous comparative advantage in petroleum.Which factor is a source of this comparative advantage? A)mild temperatures B)large reserves of crude oil C)no opportunity cost associated with oil production D)high tariffs on oil from other nations

Lower wages in China reflect _____ labor productivity in China than in the United States.This means that if the United States moved high-tech industries to China,the overall cost of production would be _____ in China than in the United States. A)lower;higher B)lower;lower C)higher;higher D)higher;lower

According to the Heckscher-Ohlin model,Brazil will have a comparative advantage in oranges if the factors that are _____ in the production of oranges are _____. A)intensive;abundant B)intensive;imported C)scarce;imported D)intensive;inexpensive

China,which is labor-abundant,has a comparative advantage in clothing production,which is labor-intensive.Which model explains this pattern of comparative advantage? A)the Ricardian model B)a model of increasing returns C)the Heckscher-Ohlin model D)a model of autarky

Bangladesh exports shirts,the making of which is labor-intensive,to the United States.The likely source of Bangladesh's comparative advantage in shirts is: A)a hotter climate,which makes it possible to produce shirts outdoors,eliminating the need for factory buildings and hence reducing costs. B)superior production technology. C)that,in comparison with the United States,Bangladesh is a labor-abundant country. D)the higher labor productivity in Bangladesh.

An urbanized country has 100 million workers living on 100 square miles of land.A country that is principally rural has 1 million workers living on 10 square miles of land.From this information we know that the urbanized country is _____ relative to the rural country. A)land-abundant B)labor-abundant C)land-intensive D)labor-intensive

Which trade pattern is BEST explained by increasing returns? A)Honduras exports bananas to the United States,and the United States exports airplanes to Honduras. B)Pakistan exports clothing to the United States,and the United States exports airplanes to Pakistan. C)Japan exports cars to the United States,and the United States exports airplanes to Japan. D)Mexico exports beef to the United States,and the United States exports airplanes to Mexico.

If the _____ differ(s)between two countries,this suggests the possibility for mutually advantageous trade. A)currency B)factor endowments C)exchange rate D)level of government spending for defense

Chile has a comparative advantage over the United States in copper.Which factor is a source of this comparative advantage? A)mild temperatures B)large deposits of copper ore C)no opportunity cost associated with copper production D)high tariffs on copper from other nations

Mexico is relatively labor-abundant when compared with the United States.Therefore,Mexico has a comparative advantage in _____ compared with the United States. A)all goods B)goods that are labor-intensive in production C)goods that are capital-intensive in production D)goods that are land-intensive in production

Which model states that nations that are abundant in a factor will have a comparative advantage in a good whose production is intensive in that factor? A)the pauper labor fallacy model B)the Ricardian model C)the Heckscher-Ohlin model D)the oligopoly model

Sri Lanka's comparative advantage over the United States in textiles can be explained by its: A)labor abundance. B)mild climate. C)advanced technology. D)increasing returns.

Japan's comparative advantage in automobiles can be attributed to: A)climate. B)factor endowments. C)technology. D)exchange rates.

Both the United States and Canada produce automobiles and their components;however,each particular model or component is produced in only one of the two countries.Which factor explains this pattern of production and trade? A)differences in climate B)differences in factor endowments C)differences in technology D)the role of increasing returns

Honduras exports clothing to the United States,and the United States exports bulldozers to Honduras.Proponents of the Heckscher-Ohlin model would explain this pattern of trade by stating that: A)Honduras has an advantage in the technology used in clothing production,while the United States has an advantage in the technology used in bulldozer production. B)Honduras's climate is more conducive to producing clothing,while the United States' climate is more conducive to producing bulldozers. C)Honduras has a relatively large endowment of factors of production for making clothing,while the United States has a relatively large endowment of factors of production for making bulldozers. D)Honduras has a factor intensity in capital and the United States has a factor intensity in labor.

Which statement does NOT describe a source of comparative advantage? A)In general,France has absolute advantage over Italy in production of goods and services. B)The United States' technology for computer chip design is more advanced than India's. C)Hawaii has a more favorable climate to grow pineapple than does Italy. D)In the market for lumber,Canada has many more trees than does England.

Use the following to answer questions 54-58: -(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.In _____,the opportunity cost of _____ cars is _____ board feet of lumber. A)the United States;1 million;10 million B)the United States;10 million;1 million C)Canada;1 million;6 million D)Canada;1 million;166,000

Use the following to answer questions 54-58: -(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.If these nations trade,Canada has the comparative advantage in _____ and should trade _____ to the United States in exchange for _____. A)cars;cars;lumber. B)lumber;lumber;cars C)lumber;cars;lumber D)cars;lumber;cars

Use the following to answer questions 54-58: -(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.If these nations were to specialize and trade,the United States would benefit from trade by exporting 1 million cars to Canada in exchange for _____ million board feet of lumber. A)2 B)0.5 C)0.7 D)1

Use the following to answer questions 54-58: -(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada._____ has/have an absolute advantage in producing cars. A)Both the United States and Canada B)Neither the United States nor Canada C)The United States D)Canada

Use the following to answer questions 54-58: -(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada._____ has/have an absolute advantage in producing lumber. A)Both the United States and Canada B)Neither the United States nor Canada C)The United States D)Canada

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat._____ has a(n)_____ advantage in the production of _____. A)Jackson;comparative;cattle B)Tahoe;comparative;wheat C)Jackson;comparative;wheat D)Jackson;absolute;cattle

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.With complete specialization according to comparative advantage,the two nations' combined production of wheat will: A)remain constant. B)increase by 120 bushels. C)increase by 60 bushels. D)decrease by 60 bushels.

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.If both nations specialize completely in the good of their comparative advantage and Jackson exports 120 bushels of wheat to Tahoe in exchange for 60 head of cattle,then the new consumption point for Jackson after trade is _____ bushels of wheat and _____ head of cattle. A)120;30 B)120;60 C)80;60 D)200;100

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.If the two countries engage in international trade and specialize completely and if the price of 1 head of cattle equals the price of 2 bushels of wheat,world production of cattle will: A)remain constant. B)increase by 90 head. C)increase by 120 head. D)decrease by 30 head.

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.Assume each nation specializes completely,based on comparative advantage,and the price of 1 head of cattle equals the price of 2 bushels of wheat.If Jackson exports 120 bushels of wheat to Tahoe,Tahoe will export _____ head of cattle to Jackson. A)120 B)60 C)240 D)200

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.Each nation specializes completely,based on comparative advantage,and the price of 1 head of cattle equals the price of 2 bushels of wheat.If Jackson exports 120 bushels of wheat to Tahoe,then the new consumption point for Tahoe after trade is _____ bushels of wheat and _____ head of cattle. A)120;140 B)120;60 C)60;120 D)400;200

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.Jackson has an absolute advantage in producing: A)wheat only. B)cattle only. C)both wheat and cattle. D)neither wheat nor cattle.

Use the following to answer questions 59-66: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.Tahoe has an absolute advantage in producing: A)wheat only. B)cattle only. C)both wheat and cattle. D)neither wheat nor cattle.

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Which statement is TRUE? A)The opportunity cost of crude oil is lower in the United States than in Mexico. B)The opportunity cost of crude oil is higher in the United States than in Mexico. C)Crude oil costs are the same in the United States and in Mexico. D)Tractor costs are the same in the United States and in Mexico.

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.The opportunity cost of _____ is _____ in the United States as/than in Mexico. A)tractors;higher B)tractors;the same C)tractors;lower D)crude oil;lower

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In the United States,the opportunity cost of producing 40 tractors is _____ barrels of crude oil. A)80,000 B)60,000 C)40,000 D)20,000

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In the United States,the opportunity cost of producing 30,000 barrels of crude oil is _____ tractors. A)60 B)80 C)100 D)120

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In Mexico,the opportunity cost of producing 40 tractors is _____ barrels of crude oil. A)30,000 B)90,000 C)120,000 D)270,000

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In Mexico,the opportunity cost of producing 150,000 barrels of crude oil is _____ tractors. A)50 B)70 C)90 D)160

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.The United States has a comparative advantage in _____,and Mexico has a comparative advantage in _____. A)both goods;neither good B)neither good;both goods C)tractors;crude oil D)crude oil;tractors

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Both the United States and Mexico will gain from trade if one tractor trades for _____ barrels of crude oil. A)5,000 B)4,000 C)1,000 D)200

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Both the United States and Mexico will gain from trade if one tractor trades for _____ barrels of oil. A)1,500 B)4,500 C)6,500 D)8,500

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil._____ has/have an absolute advantage in producing tractors. A)The United States B)Mexico C)Both the United States and Mexico D)Neither the United States nor Mexico

Use the following to answer questions 67-77: -(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil._____ has/have an absolute advantage in producing crude oil. A)The United States B)Mexico C)Both the United States and Mexico D)Neither the United States nor Mexico

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 tire in Indonesia is _____ microchip(s),while the opportunity cost of producing 1 tire in Malaysia is _____ microchip(s). A)0.5;2 B)2;1 C)600;800 D)800;1,200

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 microchip in Indonesia is _____ tire(s). A)0.5 B)1 C)2 D)6

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 microchip in Malaysia is _____ tire(s). A)0.5 B)1 C)2 D)6

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.Indonesia has a comparative advantage in producing _____,while Malaysia has a comparative advantage in producing _____. A)both microchips and tires;neither good B)neither good;both microchips and tires C)microchips;tires D)tires;microchips

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia and Malaysia specialize completely in the production of the good of their comparative advantage,the two nations together will produce _____ tires and _____ microchips. A)600;800 B)800;1,200 C)1,200;1,600 D)800;600

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia specializes completely in the production of the good of its comparative advantage,it will produce: A)600 microchips. B)800 microchips. C)800 tires. D)1,200 tires.

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Malaysia specializes completely in the production of the good of its comparative advantage,it will produce: A)800 microchips. B)1,600 microchips. C)800 tires. D)1,200 tires.

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.Both nations will gain from trade when 1 tire trades for _____ microchip(s). A)0.33 B)0.5 C)1.5 D)2

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.Trade will NOT take place if 1 microchip trades for _____ tire(s). A)0.25 B)1 C)1.5 D)1.75

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia and Malaysia trade 1 microchip for 1 tire,the most that Indonesia can consume is _____ microchips and _____ tires,while the most that Malaysia can consume is _____ microchips and _____ tires. A)300;600;800;200 B)200;900;600;300 C)1,200;400;800;200 D)600;600;1,000;600

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia and Malaysia trade 1 microchip for 1.5 tires,the most that Indonesia can consume is _____ microchips and _____ tires,while the most that Malaysia can consume is _____ microchips and _____ tires. A)300;600;800;200 B)1,200;400;800;200 C)400;600;1,200;600 D)600;600;600;600

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.Indonesia has an absolute advantage in producing: A)microchips. B)tires. C)both microchips and tires. D)neither microchips nor tires.

Use the following to answer questions 78-90: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.Malaysia has an absolute advantage in producing: A)microchips. B)tires. C)both microchips and tires. D)neither microchips nor tires.

Use the following to answer questions 91-92: -(Figure: Comparative Advantage and the Production Possibility Frontier)Use Figure: Comparative Advantage and the Production Possibility Frontier._____ has an absolute advantage in the production of _____ and a comparative advantage in the production of _____. A)The United States;computers;roses B)Colombia;computers;roses C)The United States;computers;computers D)Colombia;roses;computers

Use the following to answer questions 91-92: -(Figure: Comparative Advantage and the Production Possibility Frontier)Use Figure: Comparative Advantage and the Production Possibility Frontier._____ has an absolute advantage in the production of _____ and a comparative advantage in the production of _____. A)The United States;computers;roses B)Colombia;computers;roses C)The United States;roses;computers D)Colombia;roses;roses

Use the following to answer questions 93-94: -(Table: Production Possibilities)Use Table: Production Possibilities.The opportunity cost of 1 computer for _____ is _____box (es)of roses. A)the United States;2 B)Colombia;0.5 C)the United States;0.5 D)Colombia;1

Use the following to answer questions 93-94: -(Table: Production Possibilities)Use Table: Production Possibilities.The opportunity cost of 1 computer for _____ is _____ box(es)of roses. A)the United States;2 B)Colombia;2 C)Colombia;0.5 D)the United States;1

Use the following to answer questions 93-94: -(Figure: The Gains from International Trade)Use Figure: The Gains from International Trade.If each country specializes completely in the good for which it has a comparative advantage,each country must trade _____ computer(s)for _____ box of roses to consume at combination C. A)1;0.5 B)2;1 C)0.5;1 D)1;1

Use the following to answer questions 93-94: -An economy moves from autarky to free international trade.In the import sector,consumer surplus _____,producer surplus _____,and the economy as a whole _____. A)rises;rises;gains B)rises;falls;gains C)falls;rises;gains D)rises;falls;loses

Use the following to answer questions 97-100: -(Figure: The Market for Roses)Use Figure: The Market for Roses.Assume that P_A is the autarky price and P_W is the world price.Consumer surplus without international trade would be area: A)W + X + Y. B)Z. C)W + X + Z. D)W.

Use the following to answer questions 97-100: -(Figure: The Market for Roses)Use Figure: The Market for Roses.Assume that P_A is the autarky price and P_W is the world price.Consumer surplus with international trade would be area: A)W + X + Y. B)Z. C)W + X + Z. D)W.

Use the following to answer questions 97-100: -(Figure: The Market for Roses)Use Figure: The Market for Roses.Assume that P_A is the autarky price and P_W is the world price.Producer surplus without international trade would be area: A)X + Y + Z. B)W + X + Y. C)X + Y. D)Y.

Use the following to answer questions 97-100: -(Figure: The Market for Roses)Use Figure: The Market for Roses.Assume that P_A is the autarky price and P_W is the world price.Producer surplus with international trade would be area: A)X + Y + Z. B)W + X + Y. C)X + Y. D)Y.

Use the following to answer questions 97-100: -If a nation imports a good when the economy is opened to trade,the domestic price of the good will _____ and domestic consumption will _____. A)rise;rise B)rise;fall C)fall;rise D)fall;fall

Use the following to answer questions 102-105: -(Figure: The Market for Oranges in South Africa)Use Figure: The Market for Oranges in South Africa.In autarky,the price of oranges in South Africa is P₁.When the economy is opened to trade,the price falls to P_W.South Africa will _____ oranges,and the volume of trade will equal _____. A)import;C_T - Q_T B)export;C_T - Q_T C)import;Q₁ - Q_T D)export;C_T - Q₁

Use the following to answer questions 102-105: -(Figure: The Market for Oranges in South Africa)Use Figure: The Market for Oranges in South Africa.In autarky,the price of oranges in South Africa is P₁.When the economy is opened to trade,the price falls to P_W and consumer surplus will _____ to area _____. A)fall;M B)fall;M + N C)rise;M + N + O D)rise;M + N + O + P

Use the following to answer questions 102-105: -(Figure: The Market for Oranges in South Africa)Use Figure: The Market for Oranges in South Africa.In autarky,the price of oranges in South Africa is P₁.When the economy is opened to trade,the price falls to P_W and producer surplus will _____ to area _____. A)fall;N + Q B)fall;Q C)rise;M + N + O + P D)rise;M + N + O + P + Q

Use the following to answer questions 102-105: -(Figure: The Market for Oranges in South Africa)Use Figure: The Market for Oranges in South Africa.In autarky,the price of oranges in South Africa is P₁.When the economy is opened to trade,the price falls to P_W and the change in total surplus is area: A)O. B)O + P. C)M + N + O + P. D)M + N + O + P + Q.

Use the following to answer questions 102-105: -The United States can produce wine domestically,but it can also import wine if the world price is lower than the domestic price.If the United States imports wine,consumer surplus will _____ by _____ the _____ in producer surplus;total surplus will _____. A)increase;less than;decrease;decrease B)increase;the same amount as;decrease;stay constant C)decrease;less than;increase;increase D)increase;more than;decrease;increase

Use the following to answer questions 102-105: -Mexico produces lettuce but can also import it.If Mexico imports some lettuce: A)Mexico has a comparative advantage in lettuce production. B)the world price is lower than the domestic price. C)the price in Mexico will rise to equal the world price. D)the domestic quantity supplied will increase.

Use the following to answer questions 108-110: -(Figure: Domestic Market for Digital Cameras)Use Figure: The Domestic Market for Digital Cameras.Assume that P_A is the autarky price and P_W is the world price.Total surplus before international trade is equal to the area: A)A + B + C. B)A + B. C)A + B - D - E. D)A.

Use the following to answer questions 108-110: -(Figure: Domestic Market for Digital Cameras)Use Figure: The Domestic Market for Digital Cameras.Assume that P_A is the autarky price and P_W is the world price.Consumer surplus after international trade is equal to the area: A)A. B)A + B. C)A + B + D + E. D)A + B + D + E - C.

Use the following to answer questions 108-110: -(Figure: Domestic Market for Digital Cameras)Use Figure: The Domestic Market for Digital Cameras.Assume that P_A is the autarky price and P_W is the world price.Total surplus after international trade _____ by the area _____. A)rises;B + D + E B)falls;C C)rises;C D)rises;D + E

Use the following to answer questions 108-110: -A blockade at the border between the United States and Canada prevents the entry of all lumber products to the United States from Canada.This blockade will: A)increase the consumer surplus for American lumber consumers. B)decrease the producer surplus for Canadian lumber producers. C)increase the total surplus for the American lumber market. D)increase the total surplus for the Canadian lumber market.

Use the following to answer questions 112-116: -(Figure: The Market for Beats by Dre)Use Figure: The Market for Beats by Dre.Assume that S_d represents the domestic supply curve and D_d represents the domestic demand curve.In the market for Beats by Dre,the autarky price equals: A)$140. B)$120. C)$110. D)$100.

Use the following to answer questions 112-116: -(Figure: The Market for Beats by Dre)Use Figure: The Market for Beats by Dre.Assume that S_d represents the domestic supply curve and D_d represents the domestic demand curve.If the world price equals $100 and there is free trade,this country: A)will import 150,000 Beats by Dre. B)will export 150,000 Beats by Dre. C)has a domestic supply equal to 250,000 Beats by Dre. D)has a domestic demand equal to 100,000 Beats by Dre.

Use the following to answer questions 112-116: -(Figure: The Market for Beats by Dre)Use Figure: The Market for Beats by Dre.Assume that S_d represents the domestic supply curve and D_d represents the domestic demand curve.If the world price equals $100 and there is free trade,domestic consumer surplus _____ and domestic producer surplus _____ compared with autarky. A)increases;decreases B)increases;increases C)decreases;increases D)decreases;decreases

Use the following to answer questions 112-116: -(Figure: The Market for Beats by Dre)Use Figure: The Market for Beats by Dre.Assume that S_d represents the domestic supply curve and D_d represents the domestic demand curve.If the world price equals $100 and there is free trade,what is the gain in consumer surplus? A)$5 million B)$2.5 million C)$2.25 million D)$750,000

Use the following to answer questions 112-116: -(Figure: The Market for Beats by Dre)Use Figure: The Market for Beats by Dre.If the world price equals $100 and there is free trade,producer surplus: A)gains $1.5 million. B)gains $2 million. C)gains $750,000. D)falls.

Use the following to answer questions 117-119: -(Figure: The Market for iPhones)Use Figure: The Market for iPhones.Assume that P_A is the autarky price,P_W is the world price,and D and S represent domestic demand and supply,respectively.Consumer surplus in free trade equals the area: A)A. B)A + B + C. C)A + B + C + D. D)A + B.

Use the following to answer questions 117-119: -(Figure: The Market for iPhones)Use Figure: The Market for iPhones.Assume that P_A is the autarky price,P_W is the world price,and D and S represent domestic demand and supply,respectively.Producer surplus in free trade equals the area: A)B + C. B)B + C + D +E. C)B + E. D)E.

Use the following to answer questions 117-119: -(Figure: The Market for iPhones)Use Figure: The Market for iPhones.Assume that P_A is the autarky price,P_W is the world price,and D and S represent domestic demand and supply,respectively.The loss of producer surplus when the market moves from autarky to free trade equals the area: A)B. B)B + C + D +E. C)B + C + D. D)E.

Use the following to answer questions 120-122: -(Figure: The Domestic Supply and Demand for SUVs in the United States)Use Figure: The Domestic Supply and Demand for SUVs in the United States.Suppose the world price equals $50,000 and there is free trade.The United States would _____ SUVs. A)import 6 million B)export 6 million C)export 2 million D)import 2 million

Use the following to answer questions 120-122: -(Figure: The Domestic Supply and Demand for SUVs in the United States)Use Figure: The Domestic Supply and Demand for SUVs in the United States.Suppose the world price equals $50,000 and there is free trade.In the United States,consumer surplus would _____ and producer surplus would _____. A)increase;decrease B)increase;increase C)decrease;decrease D)decrease;increase

Use the following to answer questions 120-122: -(Figure: The Domestic Supply and Demand for SUVs in the United States)Use Figure: The Domestic Supply and Demand for SUVs in the United States.Suppose the world price equals $50,000 and there is free trade.Calculate the loss of consumer surplus. A)$41,250 million B)$30,000 million C)$52,500 million D)$22,250 million

Use the following to answer questions 123-124: -(Figure: The Domestic Market for Rice)Use Figure: The Domestic Market for Rice.Assume that P_A is the autarky price and P_W is the world price.Before international trade,consumer surplus is equal to the area: A)A. B)A + B. C)A + B + C. D)A + B + D.

Use the following to answer questions 123-124: -(Figure: The Domestic Market for Rice)Use Figure: The Domestic Market for Rice.Assume that P_A is the autarky price and P_W is the world price.After international trade,this nation will _____ a quantity of rice equal to _____. A)import;Q_s - Q_d B)export;Q_s - Q_d C)export;Q_s - Q_a D)import;Q_a - Q_d

If a country's price for wood furniture in the absence of trade is lower than the price with trade,the country will likely: A)import wooden furniture. B)export wooden furniture. C)have absolute advantage in wooden furniture production. D)have a surplus of wooden furniture.

If a country's price in the absence of trade is lower than the price with trade,then the domestic quantity supplied with trade is _____ the domestic quantity demanded. A)greater than B)less than C)equal to D)not comparable to

If a country has the comparative advantage in producing cloth,in the market for cloth the autarky price would be _____ the world price and the country would _____ cloth. A)less than;export B)greater than;export C)less than;import D)the same as;export

If a country has the comparative advantage in producing wooden furniture,then with free trade: A)the country will import wooden furniture. B)producer surplus in the market for wooden furniture will increase. C)consumer surplus in the market for wooden furniture will increase. D)the domestic quantity supplied will be less than the domestic quantity demanded.

Assume an economy moves from autarky to free international trade.In the export sector,consumer surplus _____,producer surplus _____,and the economy as a whole _____. A)rises;rises;gains B)rises;falls;gains C)falls;rises;gains D)falls;rises;loses

Use the following to answer questions 130-134: -(Figure: The Market for Tea in Sri Lanka)Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁,consumer surplus equals _____ and producer surplus equals _____. A)F + G + H + I;J + K B)F;G + H + I + J + K C)F + I;J + K D)F + G + H;J + K

Use the following to answer questions 130-134: -(Figure: The Market for Tea in Sri Lanka)Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁.When the economy is opened to trade,the price rises to P_W.Sri Lanka will _____ tea and the volume of trade will equal _____. A)import;Q_T - C_T B)export;Q_T - C_T C)import;Q_T - Q₁ D)export;Q₁ - C_T

Use the following to answer questions 130-134: -(Figure: The Market for Tea in Sri Lanka)Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁.When the economy is opened to trade,the price rises to P_W and consumer surplus _____ to _____. A)falls;F B)falls;F + G C)rises;F + G + H + I D)rises;G + H + I

Use the following to answer questions 130-134: -(Figure: The Market for Tea in Sri Lanka)Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁.When the economy is opened to trade,the price rises to P_W,and producer surplus _____ to _____. A)falls;J + K B)falls;G + H + J + K C)rises;G + H + I + J + K D)rises;G + H + I

Use the following to answer questions 130-134: -(Figure: The Market for Tea in Sri Lanka)Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁.When the economy is opened to trade,the price rises to P_W and the change in total surplus is: A)I. B)G + H + I. C)G + H + I + J + K. D)F + G + H + I + J + K.

Use the following to answer questions 130-134: -When an economy moves from autarky to free international trade,for industries in the export sector,consumer surplus _____,producer surplus _____,and the economy as a whole _____. A)rises;rises;gains B)rises;falls;gains C)falls;rises;gains D)falls;rises;loses

Use the following to answer questions 136-139: -(Figure: The Market for Computers)Use Figure: The Market for Computers.Assume that P_A is the autarky price and P_W is the world price.Consumer surplus without international trade would be area: A)W + X + Y. B)W. C)Y. D)W + X.

Use the following to answer questions 136-139: -(Figure: The Market for Computers)Use Figure: The Market for Computers.Assume that P_A is the autarky price and P_W is the world price.Consumer surplus with international trade is area: A)W + X + Y. B)W. C)Y. D)W + X.

Use the following to answer questions 136-139: -(Figure: The Market for Computers)Use Figure: The Market for Computers.Assume that P_A is the autarky price and P_W is the world price.Producer surplus without international trade would be area: A)X + Y + Z. B)W + X + Y. C)X + Y. D)Y.

Use the following to answer questions 136-139: -(Figure: The Market for Computers)Use Figure: The Market for Computers.Assume that P_A is the autarky price and P_W is the world price.Producer surplus with international trade would be area: A)X + Y + Z. B)W + X + Y. C)X + Y. D)Y.

If a nation exports a good when the economy is opened to trade,relative to the autarky price,the domestic price of the good will _____ and domestic consumption will _____. A)rise;rise B)rise;fall C)fall;rise D)fall;fall

The effect of international trade on U.S.factor markets is to: A)increase the wage of highly educated workers. B)increase the wage of unskilled workers. C)decrease the wage of both highly educated workers and unskilled workers. D)increase the wage of both highly educated workers and unskilled workers.

Since the United States imports a large quantity of textiles from Asia,the overall wages of U.S.textile workers have _____,while the price of textiles in the United States has _____. A)decreased;decreased B)increased;decreased C)decreased;increased D)increased;not changed

If labor is abundant in South Africa but capital is scarce,when South Africa opens to trade,the price of labor will _____ and the price of capital will _____. A)rise;rise B)fall;fall C)rise;fall D)fall;rise

If labor is scarce in Sri Lanka but capital is abundant,when Sri Lanka opens to trade,the price of labor will _____ and the price of capital will _____. A)rise;rise B)fall;fall C)rise;fall D)fall;rise

When a country exchanges goods with another country,in the short run: A)producers in the exporting industry may be better off. B)consumers of the imported good may be worse off. C)consumers of the exported good may be better off. D)producers in the importing industry are better off.

In a single year,Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Venezuela can raise 50 tons of beef or produce 750 boxes of tulips.When the two countries begin trading beef for tulips,we expect the price of beef in Argentina: A)to fall. B)to rise. C)to remain at the autarky price. D)to be 10 boxes of tulips.

In a single year,Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Venezuela can raise 50 tons of beef or produce 750 boxes of tulips.When the two countries begin trading beef for tulips,we expect the total surplus from beef consumption and production to: A)fall in Argentina. B)rise in Argentina. C)stay the same in Venezuela. D)either rise or fall in Venezuela.

In a single year,Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Venezuela can raise 50 tons of beef or produce 750 boxes of tulips.When the two countries begin trading beef for tulips,we expect the price of beef in Venezuela: A)to fall. B)to rise. C)to remain at the autarky price. D)to be 15 boxes of tulips.

In a single year,Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Venezuela can raise 50 tons of beef or produce 750 boxes of tulips.When the two countries begin trading beef for tulips,we expect the consumer surplus from beef consumption to: A)fall in Argentina. B)rise in Argentina. C)stay the same in Argentina. D)either rise or fall in Argentina.

When a market begins to engage in international trade: A)producers in the exporting industry may be better off. B)consumers of the imported good may be worse off. C)consumers of the exported good may be better off. D)producers in the importing industry are better off.

If a market begins to engage in international trade,we can assume that: A)producers in the exporting industry may be worse off. B)consumers of the imported good may be worse off. C)consumers of the exported good may be better off. D)producers in the importing industry may be worse off.

Compared with autarky,international trade leads to _____ domestic production in exporting industries and _____ domestic production in import-competing industries. A)higher;lower B)higher;higher C)lower;higher D)lower;lower

Policies that limit imports,usually to insulate domestic producers from foreign competition,are known as: A)import-competing clauses. B)import reduction acts. C)trade protection. D)competition protection.

Restrictions on free international trade designed to insulate domestic industries from competitive market forces that originate beyond the borders of the country are _____ policies. A)competitive B)protectionist C)free-trade D)antitrust

Use the following to answer questions 155-157: -(Figure: The Market for Laptops)Use Figure: The Market for Laptops.Assume that S and D are the domestic supply and demand curves and the world price is P_W.Identify the area of consumer surplus when a tariff raises the domestic price from the world price to P_T. A)A + B B)A + B + C + D + E + F C)A + C + G D)D + F

Use the following to answer questions 155-157: -(Figure: The Market for Laptops)Use Figure: The Market for Laptops.Assume that S and D are the domestic supply and demand curves and the world price is P_W.Identify the area of deadweight loss when a tariff raises the domestic price from the world price to P_T. A)A + B B)C + D + E + F C)D + E + F D)D + F

Use the following to answer questions 155-157: -(Figure: The Market for Laptops)Use Figure: The Market for Laptops.Assume that S and D are the domestic supply and demand curves and the world price is P_W.Identify the area of government tax revenue when a tariff raises the domestic price from the world price to P_T. A)D + E + F B)D + F C)E D)B

If the United States placed larger tariffs on all textiles,domestic _____ surplus would _____. A)producer;increase B)consumer;increase C)total;increase D)producer;decrease

An example of a tariff is a: A)limit on the total number of Honda automobiles imported from Japan. B)regulation specifying that each imported Honda automobile must meet certain emission exhaust guidelines. C)tax of $500 on each Honda automobile produced in the United States. D)tax of 10% of the value of each Honda automobile imported from Japan.

If Japan levies tariffs on U.S.goods entering Japan,this will tend to: A)benefit both Japanese and U.S.producers. B)damage U.S.producers and benefit Japanese producers. C)benefit U.S.producers and damage Japanese producers. D)damage both Japanese and U.S.producers.

If a country imposes a tariff on imported shoes,we expect the domestic price of shoes to _____,domestic consumption to _____,and domestic production to _____. A)fall;fall;fall B)fall;rise;fall C)rise;fall;rise D)rise;rise;fall

Use the following to answer questions 162-165: -(Figure: A Tariff on Oranges in South Africa)Use Figure: A Tariff on Oranges in South Africa.When the government imposes a tariff on imported oranges,the price of oranges in South Africa rises from P_W to P_T and the volume of imports falls to: A)Q₂ - Q₁. B)C₁ - C₂. C)C₁ - Q₁. D)C₂ - Q₂.

Use the following to answer questions 162-165: -(Figure: A Tariff on Oranges in South Africa)Use Figure: A Tariff on Oranges in South Africa.When the government imposes a tariff on imported oranges,the price of oranges in South Africa rises from P_W to P_T and domestic consumer surplus _____ to _____. A)falls;F + L B)falls;F + G + I + J + K + L C)rises;F + L D)rises;F + G + I + J + K + L

Use the following to answer questions 162-165: -(Figure: A Tariff on Oranges in South Africa)Use Figure: A Tariff on Oranges in South Africa.When the government imposes a tariff on imported oranges,the price of oranges in South Africa rises from P_W to P_T and domestic producer surplus _____ to _____. A)falls;G + I B)falls;G + I + J + K C)rises;G + + J + K D)rises;G + H

Use the following to answer questions 162-165: -(Figure: A Tariff on Oranges in South Africa)Use Figure: A Tariff on Oranges in South Africa.When the government imposes a tariff on imported oranges,the price of oranges in South Africa rises from P_W to P_T and there's a net _____ to total surplus of _____. A)addition;I + J + K+ L B)addition;I + J + K C)reduction;I + K D)reduction;I + J + K + L

A tariff imposed on Japanese imports into the United States tends to _____ U.S.producers and _____ Japanese producers. A)penalize;benefit. B)benefit;penalize C)penalize;penalize D)benefit;benefit

The United States places a tariff on imported Brazilian ethanol.The impact of this tariff on the domestic ethanol market is a _____ domestic price,_____ consumer surplus,and _____ producer surplus. A)higher;less;more B)lower;less;more C)higher;more;less D)higher;less;less

A tariff _____ the price received by domestic producers and _____ the price paid by domestic consumers. A)decreases;increases B)increases;decreases C)decreases;decreases D)increases;increases

A tariff is MOST likely to _____ prices and _____ domestic consumption of the good or service being protected. A)decrease;increase B)increase;decrease C)have no effect on;not change D)decrease;decrease

A tax on imported goods or services is a: A)quota. B)tariff. C)nontariff barrier. D)trade embargo.

If Japan levies tariffs on U.S.goods entering Japan,this will tend in the short run to _____ U.S.producers and _____ Japanese producers. A)benefit;benefit B)damage;benefit C)benefit;damage D)damage;damage

Which item is an example of a tariff? A)a regulation specifying that each imported Yamaha motorcycle must meet certain emission exhaust guidelines B)a limit on the total number of Yamaha motorcycles imported from Japan C)a tax of 5% of the value of each Yamaha motorcycle imported from Japan D)a tax of $250 on each Yamaha motorcycle produced in the United States

In the importing country,the MOST likely effect of a tariff is to: A)raise the price and decrease the quantity demanded. B)raise the price and increase the quantity demanded. C)raise the price without affecting the quantity demanded. D)decrease the quantity supplied.

If a country imposes a tariff on imported shoes,we expect the domestic price of shoes to _____ and the quantity of shoes consumed in the domestic market to _____. A)fall;fall B)fall;rise C)rise;fall D)rise;rise

If a country removes a tariff on imported shoes,we expect the domestic price of shoes to _____ and the quantity of shoes consumed in the domestic market to _____. A)fall;fall B)fall;rise C)rise;fall D)rise;rise

If Canada imposes a tariff of $5 per bottle on French wine,the MOST likely effect will be to raise the price of wine in Canada by: A)more than $5 per bottle. B)$5 per bottle. C)less than $5 per bottle and lower the price of wine in France by less than $5 per bottle. D)less than $5 per bottle without affecting the price of wine in France.

Assume that a tariff is imposed on Chinese imports into the United States.This tariff is likely to _____ U.S.producers and _____ Chinese producers. A)penalize;penalize B)benefit;benefit C)benefit;penalize D)penalize;benefit

A tariff imposed on U.S.imports into Japan tends to _____ U.S.producers and _____ Japanese producers. A)penalize;benefit B)benefit;penalize C)penalize;penalize D)benefit;benefit

A tax on imports of foreign goods is called a(n): A)import quota. B)aubsidy. C)tariff. D)export restriction.

A regulation that specifies the maximum amount of a good or service that may be imported during a specified period is a(n): A)import quota. B)tariff. C)nontariff barrier. D)export quota.

An example of an import quota is a: A)limit on the total number of Honda automobiles imported from Japan. B)regulation specifying that each imported Honda automobile must meet certain emission exhaust guidelines. C)tax of 10% of the value of each Honda automobile imported from Japan. D)subsidy from the Japanese government of $500 for each Honda automobile imported into the United States.

Assume that the United States imposes an import quota on Columbian coffee.Relative to the equilibrium world price that would prevail in the absence of import quotas,it is likely that the equilibrium price of coffee in the United States will _____ and the equilibrium price of coffee in Columbia will _____. A)decrease;remain the same B)remain the same;increase C)increase;increase D)increase;decrease

Assume that the United States imposes an import quota on Scottish wool suits.Relative to the equilibrium price that would prevail in the absence of quotas,the equilibrium price of suits in the United States will most likely _____ and the equilibrium price of suits in Scotland will most likely _____. A)remain the same;decrease B)remain the same;increase C)increase;increase D)increase;decrease

If the United States imposes an import quota on French wines,the result in the short run is likely to be _____ profits for American wine producers and _____ profits for French wine producers. A)lower;lower B)lower;higher C)higher;lower D)higher;higher

A direct restriction on the quantity of an import is called a(n): A)import quota. B)tariff. C)import subsidy. D)import restriction.

If quota rents do not accrue to the government,then the net loss to the government from an import quota is _____ the deadweight loss from an equivalent tariff. A)less than B)greater than C)equal to D)in the case of demand and supply both being elastic,less than

In the case of U.S.trade protection,quota rents for the most important import licenses are earned by: A)foreign governments. B)the U.S.government. C)U.S.producers of the good. D)importers who pay the highest price to get the licenses.

Which item is an example of an import quota? A)a limit on the total number of shoes imported from Italy. B)regulations specifying that each imported toy from China must meet certain safety guidelines. C)a tax of $100 on each Suzuki motorcycle produced in the United States. D)a tax of 10% of the value of each Suzuki motorcycle imported from Japan.

Assume that the United States imposes an import quota on Italian shoes.Relative to the equilibrium world price that would exist in the absence of import quotas,the equilibrium price of shoes in the United States will most likely _____ and the equilibrium price of shoes in Italy will most likely _____. A)increase;decrease B)decrease;remain the same C)decrease;increase D)increase;remain the same

The MOST likely effects of tariffs and/or import quotas are to _____ prices and to _____ consumption of the protected goods in the importing country. A)raise;raise B)raise;lower C)lower;raise D)lower;lower

The main difference between a tariff and an import quota is that: A)an import quota reduces imports more sharply than a tariff. B)a tariff will cause higher prices than an import quota. C)a tariff generates tax revenue,while an import quota generates rents to the license holders. D)a tariff will cause lower prices than an import quota.

Suppose the United States auctioned off all import quotas,the auctions were perfectly competitive,and the government received the revenues from the auction.In this case,the deadweight loss from a quota would be _____ the deadweight loss from an equivalent tariff. A)less than B)greater than C)equal to D)in the case of demand being elastic,greater than

If the United States removed the tariffs and quotas on sugar,in the U.S.market for sugar: A)consumer surplus would not change. B)consumer surplus would decrease. C)total surplus would decrease. D)producer surplus would decrease.

A tariff or quota will _____ prices and _____ the consumption of the protected goods in the importing country. A)raise;increase B)raise;decrease C)lower;increase D)lower;decrease

Tariffs and import quotas tend to: A)increase the quantity of imports as compared to free trade. B)generate government revenue. C)increase consumer surplus as compared to free trade. D)reduce total surplus as compared to free trade.

Which argument is one that is common for trade protection? A)national security B)increased efficiency C)increased profitability D)increased productivity

The infant industry argument for trade protection states that: A)small,traditional industries such as handicrafts should be protected from foreign competition or they would not be able to survive. B)new industries should be protected from foreign competition until they become established. C)industries that provide day care for their employees' children ought to be protected from foreign competition. D)industries that produce products essential for the well-being of infants (e.g. ,the baby food industry)ought to be protected since such products are essential for the good health of future generations.

In 2002,the steel industry argued that higher tariffs on steel were necessary to help fight the war on terrorism.This is an example of the _____ argument. A)infant industry B)national security C)job creation D)predatory pricing

According to the infant industry argument,import protection is needed because: A)foreign workers are often paid less than U.S.workers. B)it enables our protected industries to achieve technological efficiency and thus become competitive with mature foreign industries. C)the nation's security depends on a strong industrial base. D)it provides consumers with more and better goods in the long run.

If the executives of the U.S.silicon chip industry lobby Congress for protection from imports on the grounds that theirs is a new industry that needs time to develop technological efficiency,they are using the _____ argument. A)environmental standards B)infant industry C)cheap foreign labor D)national security

If the executives of the U.S.silicon chip industry lobby Congress for protection from imports on the grounds that the military should have an unrestricted domestic supply of silicon chips,they are using the _____ argument. A)infant industry B)job creation C)national security D)model industry

The job creation argument for protection against free trade is: A)that keeping out foreign imports allows the goods and services to be produced by domestic workers. B)frequently put forward by economists. C)mostly that we need full employment to defend the security of the nation. D)that we need full employment to prevent currency depreciation.

Many countries engage in trade protection by imposing import tariffs or quotas for at least some goods.This is because: A)economists have established that such restrictions are welfare-improving for certain categories of goods (such as raw materials). B)such restrictions tend to benefit consumers without harming producers. C)while such restrictions harm consumers,they benefit producers,who are usually a more cohesive and politically influential group. D)while such restrictions harm consumers and benefit producers,the losses to consumers are outweighed by the gains to producers.

Import protections are often imposed because: A)import protections increase total surplus,even though some groups are harmed. B)groups representing import-competing industries are more cohesive than consumers. C)benefits to producers outweigh the costs to the consumer. D)the loss in consumer surplus is usually quite small.

The organization that oversees global trade negotiations and settles trade disputes among its members is the: A)World Bank. B)European Union. C)World Trade Organization. D)North American Free Trade Agreement.

Which statement is NOT true about the World Trade Organization (WTO)? A)The WTO provides the framework for complex negotiations involved in major international trade agreements. B)The WTO resolves disputes between member countries. C)The WTO is an international organization. D)The WTO is a direct enforcer of trade agreements.

In which area does the United States significantly limit imports? A)computers B)aircraft C)sugar D)oil

_____ oversees international trade agreements. A)NAFTA B)The World Trade Organization C)The European Union D)The Federal Reserve Bank

The World Trade Organization: A)is the primary member of the North American Free Trade Agreement. B)resolves disputes between member nations arising from alleged violations of previous agreements dealing with international trade. C)is a world government with its own army. D)lends money to developing countries.

The World Trade Organization: A)assists importers and exporters in conducting their trade. B)works together with United Nations forces to enforce international decisions. C)organizes the negotiations involved in trade agreements and resolves disputes among members. D)promotes trade by organizing educational conferences.

Canada,Mexico,and the United States have: A)joined together and are operating in what is called a closed-trade area with respect to the European Union. B)developed a currency similar to the euro. C)eliminated many trade barriers among themselves. D)reduced trade among themselves to protect jobs at home.

When a business hires people in other countries to perform various tasks,_____ has occurred. A)comparative advantage B)globalization C)offshore outsourcing D)pauper labor

Use the following to answer questions 213-216: -(Figure: The Market for Calculators)Use Figure: The Market for Calculators.Assume that S and D represent the domestic demand and supply of calculators.The world price,P_W,equals $100.When the economy moves from autarky,under which the price is $150,to free trade,consumer surplus rises by area _____ and producer surplus falls by _____. A)B + K + L;B B)B + C + K + L;B + C + K + L C)B + C+ H + I + K + L;B + C + H + I D)B + C + G + H + I + J + K + L;B + C

Use the following to answer questions 213-216: -(Figure: The Market for Calculators)Use Figure: The Market for Calculators.Assume that S and D represent the domestic demand and supply of calculators.The world price,P_W,equals $100.The government imposes a quota restricting imports to 25 calculators.The domestic price rises to _____ and the quota rent is equal to area _____. A)$120;K + L B)$150;K + H + I + L C)$120;H + I D)$150;G + H + I + J

Use the following to answer questions 213-216: -(Figure: The Market for Calculators)Use Figure: The Market for Calculators.Assume that S and D represent the domestic demand and supply of calculators.The world price,P_W,equals $100.The government imposes a quota restricting imports to 25 calculators.If import licenses are granted to foreigners,the net loss due to the import quota is equal to area: A)K + L. B)G + J. C)G + H + I + J. D)G + H + I + J + K + L.

Use the following to answer questions 213-216: -(Figure: The Market for Calculators)Use Figure: The Market for Calculators.Assume that S and D represent the domestic demand and supply of calculators.The world price,P_W,equals $100.The government imposes an import tariff of $20 per calculator.Compared with the free trade situation,the tariff leads to a deadweight loss equal to area: A)K + L. B)G + J. C)G + H + I + J. D)There is no deadweight loss,since the tariff revenue the government receives offsets any losses.

Although U.S.exports and imports have grown substantially in absolute terms since the 1960s,the share of exports and imports in total output has fallen significantly over the past few decades.

Relative to the size of their economy,many other countries engage in more foreign trade than the United States.

France and the United Kingdom both produce wine and cloth with constant opportunity costs.If opportunity costs in the two countries are different and France has a comparative advantage in wine production,then England MUST have a comparative advantage in cloth production.

In autarky,the amount of a country's production and consumption of a good must be identical.

International trade based on comparative advantage allows a country to produce outside its production possibility frontier.

The Ricardian model of international trade assumes that countries have the usual bowed-out (concave to the origin)production possibility frontiers.

If Indonesia has lower wage rates than India,trade between these two nations will make India worse off.

The Heckscher-Ohlin model cannot explain United States-Mexico trade since the United States has more labor and more land than Mexico.

Since the production of clothing is labor-intensive relative to the production of wheat and China is labor-abundant relative to most countries,we expect China to export clothing.

Mexico has an abundance of unskilled labor and the United States has an abundance of skilled labor.The Heckscher-Ohlin model implies that trade between the United States and Mexico will lead to a decrease in the wages of unskilled labor in the United States and an increase in the wages of skilled labor in the United States.

Exports increase producer surplus but decrease consumer surplus and total surplus.

Evidence shows that increased international trade has increased the wages of unskilled workers in the United States.

Since labor is relatively scarce in Canada,free trade should cause the wages paid to Canadian labor to rise.

When a country moves from autarky to free international trade,consumers and producers in the import and export sectors all gain (i.e. ,both consumer surplus and producer surplus increase in both sectors).

United States follows a policy of free trade,which is especially apparent for sugar and textiles,in which all restrictions on international trade have been removed.

Import tariffs always benefit domestic producers more than they hurt domestic consumers.

In practice much trade protection reflects the political influence of import-competing producers.

The United States and the European Union levy heavy import tariffs on agricultural products,which hurt many poor farmers from the very poorest countries in the world.

When a country joins the World Trade Organization,it gives up all of its ability to determine its trade policy.

Suppose in a single year,Brazil can produce 100 tons of beef or 1,000 boxes of tulips.Suppose in the world market,one ton of beef costs eight boxes of tulips.Brazil will import beef.

Imports are good and services that are: A)sold outside of the country. B)domestically produced. C)purchased from another country. D)purchased inside the country.

If the opportunity cost of producing either of two goods in question is constant,the production possibility frontier is: A)linear. B)concave to the origin. C)convex to the origin. D)upward-sloping.

In autarky,a country: A)trades with other countries based on comparative advantage. B)trades with other countries based on absolute advantage. C)does not trade with other countries. D)follows the Heckscher-Ohlin model of trade behavior.

Comparative advantage in international trade: A)is used only by large countries. B)is used to determine whether trade will be beneficial to both countries involved. C)provides benefits to developed countries only. D)does not determine what goods countries should produce.

Gains from trade will result if a country specializes in: A)all of its goods. B)the goods in which it has a comparative advantage. C)goods in which it has an absolute advantage. D)goods in which it has an absolute and comparative advantage.

The belief that importing goods from low-wage countries will hurt the standard of living of workers in the importing country is known as the: A)Heckscher-Ohlin theory. B)pauper labor fallacy. C)sweatshop labor fallacy. D)theory of absolute advantage.

Workers in China earn low wages relative to world standards.A person who believes trade must be bad for workers in China because of this adheres to the: A)sweatshop labor fallacy. B)Heckscher-Ohlin theory. C)pauper labor fallacy. D)theory of absolute advantage.

Comparative advantage arises from: A)differences in climate,factor endowments,and technology. B)absolute advantage. C)countries engaging in autarkic behavior. D)an emphasis on export production.

The model suggesting that countries will specialize in producing the good that uses its relatively abundant factor of production MOST intensively is referred to as the _____ model. A)Heckscher-Ohlin B)absolute advantage C)sweatshop labor D)pauper labor fallacy

Countries that trade based on the Heckscher-Ohlin model will find that: A)their import goods tend to utilize their relatively scarce factors of production most intensively. B)the goods they export tend to use their relatively scarce factors of production most intensively. C)countries with a relative abundance of capital will export goods that use labor intensively. D)the concept of absolute advantage determines which goods they should export and import.

A country that is relatively labor-abundant and relatively land-scarce opens to international trade.As a result,it finds that wages _____ and rents _____. A)increase;decrease B)decrease;decrease C)decrease;increase D)increase;increase

Use the following to answer questions 258-263: -(Scenario: The Production of Wheat and Toys)Use Scenario: Production of Wheat and Toys.Country A has an absolute advantage in _____ and a comparative advantage in the production of _____. A)toys;wheat B)toys;toys C)wheat and toys;wheat D)neither good;toys

Use the following to answer questions 258-263: -(Scenario: The Production of Wheat and Toys)Use Scenario: Production of Wheat and Toys.The opportunity cost of producing a unit of wheat in country B is: A)75 toys. B)3 toys. C)25 units of wheat. D)0.33 units of wheat.

Use the following to answer questions 258-263: -(Scenario: The Production of Wheat and Toys)Use Scenario: Production of Wheat and Toys.If each country specializes in the good for which it has the comparative advantage: A)country A will produce wheat and country B will produce toys. B)country A will produce both wheat and toys. C)country A will produce toys and country B will produce wheat. D)country B will produce both wheat and toys.

Use the following to answer questions 258-263: -(Scenario: The Production of Wheat and Toys)Use Scenario: Production of Wheat and Toys.If each country specializes in the good for which it has the comparative advantage,then the price of wheat in terms of toys will be: A)between two units of toys and one-third unit of toys. B)between two units of toys and three units of toys. C)three units of toys. D)between one-third unit of toys and one-half unit of toys.

Use the following to answer questions 258-263: -(Scenario: The Production of Wheat and Toys)Use Scenario: Production of Wheat and Toys.If each country specializes completely in the good for which it has the comparative advantage,which combination represents a maximum possible amount of total production of the two goods,given the specialization? A)50 wheat and 100 toys B)50 wheat and 75 toys C)25 wheat and 75 toys D)100 toys and 25 wheat

Use the following to answer questions 258-263: -(Scenario: The Production of Wheat and Toys)Use Scenario: Production of Wheat and Toys.The opportunity cost of producing a unit of toys in country A is _____ unit(s)of wheat. A)0.5 B)1 C)50 D)100

Use the following to answer questions 258-263: -Advocates of trade barriers suggest that the barriers are needed for national security,job creation,and to: A)protect producers who are just starting out so that they can become more established. B)eliminate the need for governments to become involved in the trade discussions. C)enhance the comparative advantage nature of trade. D)increase tariff revenue for government.

Use the following to answer questions 265-268: -(Figure: The Markets for Melons in Russia)Use Figure: The Market for Melons in Russia.Without trade,the country's producer surplus will equal area _____,and consumer surplus will equal area _____. A)ACJ;ABJ B)BCJ;ABJ C)ABJ;BCJ D)BJDK;ABJ

Use the following to answer questions 265-268: -(Figure: The Markets for Melons in Russia)Use Figure: The Market for Melons in Russia.If the world price of melons is equal to E,Russia will _____ of melons. A)import I - H B)export I - H C)import G - F D)export G - F

Use the following to answer questions 265-268: -(Figure: The Markets for Melons in Russia)Use Figure: The Market for Melons in Russia.Suppose the world price of melons is D.Russia will _____ of melons. A)import I - H B)export I - H C)import G - F D)export G - F

Use the following to answer questions 265-268: -(Figure: The Markets for Melons in Russia)Use Figure: The Market for Melons in Russia.If Russia is trading based on comparative advantage and the world price is D,then Russia has _____ in the production of melons. A)a comparative advantage B)a comparative disadvantage C)an absolute advantage D)neither an absolute nor a comparative advantage

Use the following to answer questions 265-268: -The World Trade Organization: A)oversees trade agreements. B)is an example of a trade agreement. C)includes all nations. D)was established before World War II.

Use the following to answer questions 270-273: -(Figure: The Markets for Melons in Russia II)Use Figure: The Market for Melons in Russia II.Suppose Russia opens to trade and finds the world price to be $10.Russia will: A)import 30 units of melons. B)export 30 units of melons. C)not find it beneficial to trade. D)import 40 units of melons.