Question 1

Assume Russia and the United States each produce only two goods,tanks and automobiles.The values in Table 17.1 represent the maximum amount of each good that can be produced using existing resources.
Table 17.1 - Full-employment output of goods  
-Based on the information in Table 17.1,the output of automobiles and tanks will increase if:

Accepted Answer

A)   Russia specializes in producing tanks,and the United States specializes in producing automobiles.
B)   Both countries attempt to become self-sufficient.
C)   Russia specializes in producing automobiles,and the United States specializes in producing tanks.
D)   The United States produces both goods and exports them to Russia.

Question 2

Which of the following does the United States export?

Accepted Answer

A)   Soybeans,tobacco,aircraft,and chemicals.
B)   Tobacco but not aircraft.
C)   Soybeans,but not chemicals or tobacco.
D)   Aircraft and chemicals,but not soybeans.

Question 3

A trade deficit means that imports exceed exports over some relevant time period.

Accepted Answer

A) True 
 B)False

Question 4

If the opportunity cost of producing a good is the same in two different countries,there is no incentive to trade.

Accepted Answer

A) True 
 B)False

Question 5

The exchange rate is the ratio at which a currency can be exchanged for gold.

Accepted Answer

A) True 
 B)False

Question 6

If there are only two countries in the world and one has a trade deficit,the other country must:

Accepted Answer

A)   Also have a trade deficit.
B)   Have a trade surplus.
C)   Have a comparative advantage in all goods.
D)   Have trade restrictions in place.

Question 7

Suppose the United States and Japan each produce only two goods and have the production possibilities shown in Figure 17.1.Without trade,Japan produces at point A and the United States produces at point B.Use the figure to answer the question(s) below. 
-If the countries are at points A and B in Figure 17.1 and do not trade,what is the total number of DVD players produced per day?

Accepted Answer

A)   1,000.
B)   2,000.
C)   3,000.
D)   4,000.

Question 8

International trade:

Accepted Answer

A)   Benefits rich countries but not poor countries.
B)   Allows all countries to consume beyond their production possibilities.
C)   Forces poor countries to consume exactly what they produce.
D)   Requires poor countries to import more than they export.

Question 9

The trade balance is found by calculating:

Accepted Answer

A)   The sum of exports and imports.
B)   The difference between exports and imports.
C)   How much exports and imports are used.
D)   The ratio of exports to imports.

Question 10

Exports are the goods and services bought from foreign sources.

Accepted Answer

A) True 
 B)False

Question 11

When the U.S.dollar appreciates in value,the United States will export fewer goods,ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 12

Why do countries enter into trade agreements for products that could be produced within their own country?

Accepted Answer

Countries may enter into a trade agreeme...

Question 13

The model represents the market for sugar in a small nation.Assume S1 represents the U.S.domestic supply of sugar and S2 represents the supply in the U.S.under conditions of free trade 1 represents the U.S.domestic supply of sugar and S2 represents the supply in the U.S.under conditions of free trade   -The domestic price paid by the nation's consumers after the imposition of a tariff in Figure 17.2 will be: A)  P1. B)  P2. C)  P3. D)  Cannot be determined with the given information." class="answers-bank-image d-inline" rel="preload" >
-The domestic price paid by the nation's consumers after the imposition of a tariff in Figure 17.2 will be:

Accepted Answer

A)   P1.
B)   P2.
C)   P3.
D)   Cannot be determined with the given information.

Question 14

World output will be maximized if each country pursues its comparative advantage.

Accepted Answer

A) True 
 B)False

Question 15

When a French tourist traveling in Mexico asks "How many pesos can I get for these euros?" he wants to know the:

Accepted Answer

A)   Terms of trade.
B)   Exchange rate.
C)   Currency quota rate.
D)   Import exchange ratio.

Question 16

If a country has an absolute advantage,it has:

Accepted Answer

A)   The ability to produce a specific good at a lower opportunity cost than its trading partners.
B)   Total market domination in the production and sales of a specific good.
C)   The ability to produce a specific good with fewer resources than its trading partners.
D)   The ability to guarantee itself very favorable terms of trade at the expense of its trading partners.

Question 17

Terms of trade refer to:

Accepted Answer

A)   Negotiations made by the Minister of Trade.
B)   The rate at which goods are exchanged for one another.
C)   The ratio of imports to exports.
D)   Protectionist policies.

Question 18

Assume a country is initially operating on its production possibilities curve.If it specializes in the production of a good and trades,the country will:

Accepted Answer

A)   Move to a level of production outside its production possibilities curve.
B)   Shift its production possibilities curve outward.
C)   Move to a level of consumption outside its production possibilities curve.
D)   Shift its production possibilities curve inward.

Question 19

If a country has a comparative advantage in the production of paper:

Accepted Answer

A)   Its opportunity cost of producing paper is lower than its trading partners.
B)   It can produce paper with fewer resources than its trading partners.
C)   Its opportunity cost of producing paper is greater than its trading partners.
D)   The relative price of paper is higher in that country than its trading partners.

Question 20

When a country pursues its comparative advantage:

Accepted Answer

A)   World output is minimized.
B)   Potential gains from trade are minimized.
C)   Potential gains from trade are maximized.
D)   Imports and exports are equal.

Exam 17: International Trade

When a French tourist traveling in Mexico asks "How many pesos can I get for these euros?" he wants to know the:

Correct Answer
verified

Why do countries enter into trade agreements for products that could be produced within their own country?

Correct Answer
verified
Countries may enter into a trade agreeme...
View Answer

International trade:

Correct Answer
verified

When the U.S.dollar appreciates in value,the United States will export fewer goods,ceteris paribus.

Correct Answer
verified

World output will be maximized if each country pursues its comparative advantage.

Correct Answer
verified

A trade deficit means that imports exceed exports over some relevant time period.

Correct Answer
verified

If the opportunity cost of producing a good is the same in two different countries,there is no incentive to trade.

Correct Answer
verified

Terms of trade refer to:

Correct Answer
verified

When a country pursues its comparative advantage:

Correct Answer
verified

Which of the following does the United States export?

Correct Answer
verified

Correct Answer
verified

The trade balance is found by calculating:

Correct Answer
verified

If there are only two countries in the world and one has a trade deficit,the other country must:

Correct Answer
verified

If a country has an absolute advantage,it has:

Correct Answer
verified

Correct Answer
verified

Assume a country is initially operating on its production possibilities curve.If it specializes in the production of a good and trades,the country will:

Correct Answer
verified

The model represents the market for sugar in a small nation.Assume S₁ represents the U.S.domestic supply of sugar and S₂ represents the supply in the U.S.under conditions of free trade -The domestic price paid by the nation's consumers after the imposition of a tariff in Figure 17.2 will be:

Correct Answer
verified

The exchange rate is the ratio at which a currency can be exchanged for gold.

Correct Answer
verified

Exports are the goods and services bought from foreign sources.

Correct Answer
verified

If a country has a comparative advantage in the production of paper:

Correct Answer
verified

Exam 17: International Trade

When a French tourist traveling in Mexico asks "How many pesos can I get for these euros?" he wants to know the:

Correct AnswerverifiedShow Answer

Why do countries enter into trade agreements for products that could be produced within their own country?

Correct AnswerverifiedCountries may enter into a trade agreeme...View AnswerShow Answer

International trade:

Correct AnswerverifiedShow Answer

When the U.S.dollar appreciates in value,the United States will export fewer goods,ceteris paribus.

Correct AnswerverifiedShow Answer

World output will be maximized if each country pursues its comparative advantage.

Correct AnswerverifiedShow Answer

A trade deficit means that imports exceed exports over some relevant time period.

Correct AnswerverifiedShow Answer

If the opportunity cost of producing a good is the same in two different countries,there is no incentive to trade.

Correct AnswerverifiedShow Answer

Terms of trade refer to:

Correct AnswerverifiedShow Answer

When a country pursues its comparative advantage:

Correct AnswerverifiedShow Answer

Which of the following does the United States export?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The trade balance is found by calculating:

Correct AnswerverifiedShow Answer

If there are only two countries in the world and one has a trade deficit,the other country must:

Correct AnswerverifiedShow Answer

If a country has an absolute advantage,it has:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume a country is initially operating on its production possibilities curve.If it specializes in the production of a good and trades,the country will:

Correct AnswerverifiedShow Answer

The model represents the market for sugar in a small nation.Assume S1 represents the U.S.domestic supply of sugar and S2 represents the supply in the U.S.under conditions of free trade -The domestic price paid by the nation's consumers after the imposition of a tariff in Figure 17.2 will be:

Correct AnswerverifiedShow Answer

The exchange rate is the ratio at which a currency can be exchanged for gold.

Correct AnswerverifiedShow Answer

Exports are the goods and services bought from foreign sources.

Correct AnswerverifiedShow Answer

If a country has a comparative advantage in the production of paper:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Countries may enter into a trade agreeme...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The model represents the market for sugar in a small nation.Assume S₁ represents the U.S.domestic supply of sugar and S₂ represents the supply in the U.S.under conditions of free trade -The domestic price paid by the nation's consumers after the imposition of a tariff in Figure 17.2 will be:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified