Question 1

-Refer to Table 18.2. Possible terms of trade between the U.S. and Japan are:

Accepted Answer

A)   1 tractor for 3 stereos.
B)   1 tractor for 1/3 stereo.
C)   1 stereo for 1/3 tractor.
D)   1 stereo for 8 tractors.

Question 2

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions:
-According to the application, examples of non- durable goods include:

Accepted Answer

A)   massages.
B)   televisions.
C)   toys.
D)   cars.

Question 3

-Refer to Table 18.1. The opportunity cost of an accordion in Scotland is:

Accepted Answer

A)   1/3 bagpipe.
B)   6 bagpipes.
C)   2 bagpipes.
D)   1/2 bagpipe.

Question 4

In 2002, President Bush imposed a tariff on imported steel in order to protect domestic steel producers. What was the reason why the tariff ended?

Accepted Answer

A)   the threat of a possible recession in the U.S.
B)   the decrease in demand for steel by US industries
C)   the threat of retaliatory tariffs by Europe
D)   the improved profitability of domestic steel firms

Question 5

The citizens of a country may prefer a tariff to a quota because:

Accepted Answer

A)   a quota, but not a tariff, generates additional revenue for the government, which can be used for public programs.
B)   a tariff, but not a quota, generates additional profits for importers, not the government.
C)   a tariff, but not a quota, generates additional revenue for the government, which can be used for public programs.
D)   a quota, but not a tariff, generates additional profits for importers, not the government.

Question 6

Suppose that the U.S. has comparative advantage on cars while Japan has comparative advantage on TV's. Assume that both countries produce both goods in autarky. If both countries open their economies to trade, identify the workers in each country who will be hurt by free trade.

Accepted Answer

Once both countries open their borders t...

Question 7

What countries are members of the DR- CAFTA?

Accepted Answer

the United States, the Dominic...

Question 8

Recall Application 2, "Protection for Candle Makers," to answer the following questions:
-According to the application, Frederic Bastiat's petition calling for the protection of candlemakers was fictitious.

Accepted Answer

A) True 
 B)False

Question 9

Consider a nation that has a comparative advantage in the production of goods using unskilled labor. What types of workers will benefit from increased trade, and what type will lose?

Accepted Answer

As a result of trade...

Question 10

The equilibrium price under an import quota is above the price that occurs with free trade.

Accepted Answer

A) True 
 B)False

Question 11

Suppose Japanese auto manufacturers voluntarily reduce exports to the U.S. Who will benefit from a voluntary export restraint? Who will get hurt from a voluntary export restraint? Explain.

Accepted Answer

Aside from the U.S. auto manufacturers, ...

Question 12

Protection shields domestic workers from foreign competition.

Accepted Answer

A) True 
 B)False

Question 13

An import quota:

Accepted Answer

A)   increases the amount of a good imported, thus increasing prices.
B)   increases the amount of a good imported, thus decreasing prices.
C)   limits the amount of a good that can be imported, thus decreasing prices.
D)   limits the amount of a good that can be imported, thus increasing prices.

Question 14

Figure 18.4
-Refer to Figure 18.4. With a tariff or quota, what is the equilibrium quantity of artichokes in Duckland?

Accepted Answer

A)   85
B)   30
C)   75
D)   65

Question 15

Figure 18.3
-Refer to Figure 18.3. With free trade, the equilibrium quantity is:

Accepted Answer

A)   80.
B)   100.
C)   40.
D)   60.

Question 16

The consumption possibilities curve shows the combinations of goods that can be:

Accepted Answer

A)   produced by a nation before trading begins.
B)   produced by a nation after trade begins.
C)   consumed by a nation after trading begins.
D)   consumed by a nation before trade begins.

Question 17

Under GATT's "Most Favored Nation" provision countries can reduce tariffs only for their allies.

Accepted Answer

A) True 
 B)False

Question 18

Figure 18.1
-Refer to Figure 18.1. In autarky, the maximum amount of umbrellas that Duckland can produce is:

Accepted Answer

A)   40.
B)   50.
C)   100.
D)   150.

Question 19

Which of the following explains why the world market may support only one or two firms worldwide?

Accepted Answer

A)   constant returns to scale
B)   large economies of scale
C)   comparative advantage
D)   learning by doing

Question 20

-Refer to Table 18.1. The opportunity cost of an accordion in Poland is:

Accepted Answer

A)   1/2 bagpipe.
B)   6 bagpipes.
C)   1/3 bagpipe.
D)   2 bagpipes.

Exam 18: International Trade and Public Policy

-Refer to Table 18.1. The opportunity cost of an accordion in Poland is:

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Protection shields domestic workers from foreign competition.

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Figure 18.4 -Refer to Figure 18.4. With a tariff or quota, what is the equilibrium quantity of artichokes in Duckland?

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An import quota:

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What countries are members of the DR- CAFTA?

Correct Answerverifiedthe United States, the Dominic...View AnswerShow Answer

Under GATT's "Most Favored Nation" provision countries can reduce tariffs only for their allies.

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Recall Application 2, "Protection for Candle Makers," to answer the following questions: -According to the application, Frederic Bastiat's petition calling for the protection of candlemakers was fictitious.

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Figure 18.3 -Refer to Figure 18.3. With free trade, the equilibrium quantity is:

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Suppose that the U.S. has comparative advantage on cars while Japan has comparative advantage on TV's. Assume that both countries produce both goods in autarky. If both countries open their economies to trade, identify the workers in each country who will be hurt by free trade.

Correct AnswerverifiedOnce both countries open their borders t...View AnswerShow Answer

-Refer to Table 18.1. The opportunity cost of an accordion in Scotland is:

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Figure 18.1 -Refer to Figure 18.1. In autarky, the maximum amount of umbrellas that Duckland can produce is:

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Which of the following explains why the world market may support only one or two firms worldwide?

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-Refer to Table 18.2. Possible terms of trade between the U.S. and Japan are:

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The consumption possibilities curve shows the combinations of goods that can be:

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The citizens of a country may prefer a tariff to a quota because:

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In 2002, President Bush imposed a tariff on imported steel in order to protect domestic steel producers. What was the reason why the tariff ended?

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Consider a nation that has a comparative advantage in the production of goods using unskilled labor. What types of workers will benefit from increased trade, and what type will lose?

Correct AnswerverifiedAs a result of trade...View AnswerShow Answer

Suppose Japanese auto manufacturers voluntarily reduce exports to the U.S. Who will benefit from a voluntary export restraint? Who will get hurt from a voluntary export restraint? Explain.

Correct AnswerverifiedAside from the U.S. auto manufacturers, ...View AnswerShow Answer

The equilibrium price under an import quota is above the price that occurs with free trade.

Correct AnswerverifiedShow Answer

Recall Application 4, "Trade, Consumption and Inequality," to answer the following questions: -According to the application, examples of non- durable goods include:

Correct AnswerverifiedShow Answer

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the United States, the Dominic...
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Once both countries open their borders t...
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As a result of trade...
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Aside from the U.S. auto manufacturers, ...
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