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Exam 8: International Trade

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Question 31

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(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.Which of the following is true? A.The opportunity cost of tractors is higher in the United States than in Mexico. B.The opportunity cost of tractors is the same in the United States and in Mexico. C.The opportunity cost of tractors is lower in the United States than in Mexico. D.The opportunity cost of crude oil is lower in the United States than in Mexico.

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The opportunity cost...

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Question 32

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Which of the following 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.

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A limit on the total...

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Question 33

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A tax on imports of foreign goods is called: A.a quota. B.a subsidy. C.a tariff. D.an export restriction.

Figure: The Market for MP₃ Players (Figure: The Market for MP₃ Players) Look at the figure The Market for MP₃ Players.In the market for MP₃ players, if the world price equals $100 and there is free trade, consumer surplus ________ and producer surplus compared to autarky. A.increases; decreases B.increases; increases C.decreases; increases D.decreases; decreases

In which of the following areas does the United States significantly limit imports? A.computers B.aircraft C.agriculture D.oil

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

If quota rents do not accrue to the government, then the net loss from a quota is the deadweight loss from an equivalent tariff.

(Table: The Production Possibilities for Cars and Leather Boots) Look at the table The Production Possibilities for Cars and Leather Boots.The opportunity cost of producing one car in Canada is: A.0.5 (thousand) leather boots. B.1 (thousand) leather boots. C.different than it is in the United States. D.2 (thousand) leather boots, which is the same as in the United States.

Figure: The Market for MP₃ Players (Figure: The Market for MP₃ Players) Look at the figure The Market for MP₃ Players.In the market for MP₃ players, 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 million D.$750,000

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

Figure: The Market for Roses (Figure: The Market for Roses) Look at the figure The Market for Roses.In the figure, consumer surplus without international trade would be area or areas: A.W + X + Y. B.Z. C.W + X + Z. D.W.

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 price 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.

Which of the following is a common argument for trade protection? A.national security B.increased efficiency C.increased profitability D.increased productivity

(Figure: The Market for Calculators) Look at the figure The Market for Calculators.The world price, PW, 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 areas: A.K + L. B.G + J. C.G + H + I + J. D.G + H + I + J + K + L.

The Leontief paradox is the surprising discovery by the economist Wassily Leontief in 1951 that: A.U.S.exports were less capital-intensive than U.S.imports. B.the value of U.S.exports and imports was much lower than the corresponding value for other industrialized countries. C.U.S.imports were growing much faster than U.S.exports. D.exports and imports for most European countries were growing much faster than U.S.exports and imports, even though the United States placed fewer restrictions on international trade.

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 temporarily 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.

China, which is labor-abundant, has a comparative advantage in clothing production, which is labor- intensive.Which of the following models 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

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

Which of the following oversees international trade agreements? A.NAFTA B.the World Trade Organization C.the European Union D.the Federal Reserve Bank

(Figure: A Tariff on Oranges in South Africa) Look at the 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 PW to PT 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