Answer the question(s) below based upon the following diagram.
1)
Refer to the figure above. With free trade, the total quantity of imports would equal
1)
______
A)
30,000 units.
B)
10,000 units.
C)
22,000 units.
D)
20,000 units.
2)
Refer to the figure above. With free trade, the total value of imports would equal
2)
______
A)
$300,000.
B)
$200,000
C)
$10.
D)
$100,000.
3)
Refer to the figure above. With the tariff, the quantity of imports falls to
3)
______
A)
10,000 units.
B)
22,000 units.
C)
12,000 units.
D)
14,000 units.
4)
Refer to the figure above. With the tariff, the government collects
4)
______
A)
$100,000.
B)
$60,000.
C)
$50,000.
D)
$220,000.
5)
Refer to the figure above. The deadweight cost of the tariff equals
5)
______
A)
$25,000.
B)
$50,000.
C)
$10,000.
D)
cannot be calculated without further information.
6)
Refer to the figure above. Domestic producers gain ______because of the tariff.
6)
______
A)
$55,000
B)
$150,000
C)
$15
D)
$120,000
7)
Refer to the figure above. A tariff of ______would be prohibitive.
7)
______
A)
$0
B)
$10
C)
$5
D)
$8
8)
The United States charges
8)
______
A)
the same tariff rates on goods from all countries.
B)
lower tariff rates on goods from countries with most favored nation status.
C)
low or zero tariffs on goods from certain developing countries.
D)
Both B and C.
9)
Tariff levels in developing countries tend to be ______tariff levels in developed countries.
9)
______
A)
higher than
B)
lower than
C)
about equal to
D)
there is no general pattern
10)
Quotas are government imposed limits on the ______of goods traded between countries.
10)
______
A)
prices
B)
quantity
C)
value
D)
Either B or C
11)
Like tariffs, quotas tend to lead to
11)
______
A)
increased consumer surplus.
B)
increased government revenue.
C)
higher prices and reduced imports.
D)
All of the above.
12)
Which of the following is a valid argument for protection?
12)
______
A)
fair trade
B)
creation of employment
C)
national defense
D)
All of the above
13)
Which of the following is an invalid argument for protection?
13)
______
A)
preservation of the home market
B)
infant industry protection
C)
redistribution of income
D)
All of the above
14)
The United States bans most imports from all of the following countries except
14)
______
A)
Cuba.
B)
China.
C)
North Korea.
D)
Iran.
15)
Quotas that entirely eliminate trade in a certain product or a number of products are known as
15)
______
A)
ultimate tariffs.
B)
embargoes.
C)
export tariffs.
D)
deadweight.
16)
A situation in which a country does not take part in international trade is known as
16)
______
A)
protectionist point.
B)
indifference tradeoff.
C)
autarky.
D)
openness neglect.
17)
Mercantilism
17)
______
A)
was a system of export promotion and barriers to imports practiced by governments, especially in the 17th and 18th centuries.
B)
is the philosophy of free international trade.
C)
was praised by Adam Smith in The Wealth of Nations.
D)
Both A and C.
Answer the question(s) below based on the information in the following table
Country
Goods / A / BX / 3 / 9
Y / 4 / 2
(numbers indicate hours of labor per unit of output)
18)
Refer to the table above. Country A has absolute advantage in
18)
______
A)
Good X.
B)
Good Y.
C)
Neither X nor Y.
D)
Both X and Y.
19)
Refer to the table above. Country B has absolute advantage in
19)
______
A)
Good Y.
B)
Good X.
C)
Neither X nor Y.
D)
Both X and Y.
20)
Refer to the table above. If countries were to trade along the lines of absolute advantage
20)
______
A)
B would import Y from A.
B)
A would export X to B.
C)
neither country would want to trade.
D)
More information is needed to determine the pattern.
21)
Refer to the table above. If countries were to trade along the lines of comparative advantage
21)
______
A)
B would import Y from A.
B)
A would export X to B.
C)
neither country would want to trade.
D)
More information is needed to determine the pattern.
22)
Refer to the table above. In autarky the relative price of X (in terms of Y) in A would be
22)
______
A)
$3
B)
3/4
C)
3/9
D)
4/3
Answer the question(s) below based on the information in the following table
Country
Goods / A / BBeer / 3 / 9
Wine / 1 / 2
(numbers indicate hours of labor per unit of output)
23)
Refer to the table above. Country A has a comparative advantage in
23)
______
A)
beer.
B)
wine.
C)
both beer and wine.
D)
neither beer nor wine.
24)
Refer to the table above. Country A has an absolute advantage in
24)
______
A)
beer.
B)
wine.
C)
both beer and wine.
D)
neither beer nor wine.
25)
Refer to the table above. For trade to occur along the lines of comparative advantage, wages in A relative to wages in B (measured in the same currency)
25)
______
A)
must be at least twice but less than 3 times as great.
B)
must be greater than $2 but less than $3.
C)
must be less than three times as small.
D)
Need more information to answer.
26)
Refer to the table above. If each country were to reduce production of its comparative disadvantage good by 1 unit, world output of wine would rise by
26)
______
A)
3 units.
B)
2 units.
C)
1.5 units.
D)
3.5 units.
27)
Refer to the table above. The relative price of beer in terms of wine in B is
27)
______
A)
$4.50.
B)
2.
C)
$2.00.
D)
4.5.