Question 1

In 1845, French economist Frédéric Bastiat famously compared tariffs to blocking out the sun since both low-priced imports and free sunlight discourage domestic industry. What part of the trade diagram best describes the encouragement of domestic industry if Bastiat's "blockade" was taken seriously?

Accepted Answer

A)   deadweight loss
B)   fall in consumer surplus
C)   fall in producer surplus
D)   wasted resourcesE) None of the above
F) A) and B)

Question 2

Trade:

Accepted Answer

A)   decreases the number of jobs.
B)   increases the number of jobs.
C)   moves jobs from export industries to import-competing industries.
D)   moves jobs from import-competing industries to export industries.E) C) and D)
F) B) and C)

Question 3

Why does economic growth require job destruction?

Accepted Answer

A)   Economic growth requires international trade, which has been proven to cause short-term job loss.
B)   Economic growth comes from creating and producing goods that use resources more productively, causing job loss in industries that use outdated technology.
C)   Excessive job creation can destroy economic growth.
D)   When economic growth occurs, there are not enough resources left over for worker retraining and re-education programs.E) A) and B)
F) B) and C)

Question 4

Use the following to answer questions: Figure: Trade 
-(Figure: Trade)  Refer to the figure. If this figure represents the market for oil and the country imposes no tariffs on international trade, domestic consumption will be:

Accepted Answer

A)   500 units.
B)   1,000 units.
C)   1,150 units.
D)   1,300 units.E) A) and B)
F) None of the above

Question 5

Use the following to answer questions: Figure: Bananas 
-(Figure: Bananas)  Refer to the figure. If there is a $3 tariff on bananas, domestic consumers buy ______ fewer bananas and domestic producers grow ______ additional bananas.

Accepted Answer

A)   50,000; 10,000
B)   75,000; 10,000
C)   50,000; 20,000
D)   75,000; 20,000E) None of the above
F) A) and C)

Question 6

Strategic trade protectionism makes:

Accepted Answer

A)   all countries better off.
B)   no one better off.
C)   foreign countries better off at the expense of the domestic country.
D)   the domestic country better off at the expense of foreign countries.E) B) and D)
F) B) and C)

Question 7

Which statement is TRUE?

Accepted Answer

A)   Although inefficient, trade restrictions are effective at reducing child labor.
B)   Most child labor around the world takes place in factories that export products.
C)   Rising real GDP per capita has been an important force in reducing child labor.
D)   About 50% of the world's children aged 10 to 14 work.E) None of the above
F) B) and C)

Question 8

The United States is not competitive with Brazil in sugar production partly because:

Accepted Answer

A)   the average United States climate is not ideal for sugar production.
B)   the average Brazilian climate is not ideal for sugar production.
C)   the United States does not focus on sugar production.
D)   Brazil does not focus on sugar production.E) A) and B)
F) All of the above

Question 9

Economic theory supports the existence of specialized majors in college.

Accepted Answer

A) True 
 B)False

Question 10

Briefly discuss any benefits of "protectionism".

Accepted Answer

Protectionism can allow a new industry t...

Question 11

Trade moves jobs from import-competing industries to export industries.

Accepted Answer

A) True 
 B)False

Question 12

When a country adopts free trade and becomes a net exporter of a good, that good:

Accepted Answer

A)   becomes cheaper for domestic consumers.
B)   becomes more expensive for domestic consumers.
C)   does not change in price.
D)   may get cheaper or more expensive for domestic consumers.E) A) and B)
F) A) and C)

Question 13

If quotas on sugar were eliminated in the United States, domestic production of sugar would fall. Why is this a benefit in economic terms for the United States?
I. Resources are freed up that could be used more efficiently elsewhere.
II. It is beneficial because it allows foreign producers of sugar to earn income and thus those countries are better off.
III. U.S. consumers are able to enjoy increased consumer surplus because of the lower prices of imported sugar.

Accepted Answer

A)   I and II only
B)   I and III only
C)   II and III only
D)   I, II, and IIIE) A) and C)
F) A) and B)

Question 14

Use the following to answer questions: Figure: International Trade 3 
-(Figure: International Trade 3)  Refer to the figure. If the government in this diagram eliminates all imports with a tariff, the value of the lost gains from trade is:

Accepted Answer

A)   $4.50.
B)   $81.
C)   $27.
D)   $36.E) A) and D)
F) B) and C)

Question 15

The U.S. price of sugar is higher than the world price of sugar due primarily to a:

Accepted Answer

A)   subsidy.
B)   quota.
C)   local content requirement.
D)   tariff.E) A) and B)
F) B) and D)

Question 16

Use the following to answer questions: Figure: International Trade 4 
-(Figure: International Trade 4)  Refer to the figure. If, in this figure, the government eliminated free trade, producer surplus would:

Accepted Answer

A)   increase by $18.
B)   increase by $50.
C)   decrease by $36.
D)   increase by $22.50.E) None of the above
F) All of the above

Question 17

For strategic trade protectionism to be effective, the:

Accepted Answer

A)   good in question must be produced with high-tech equipment.
B)   supply of the good in question must be elastic.
C)   supply of the good in question must be inelastic.
D)   good in question must be one of many goods that the country exports.E) None of the above
F) C) and D)

Question 18

History has shown that one of the most effective tools against child labor is:

Accepted Answer

A)   regulations.
B)   laws.
C)   economic growth.
D)   quotas.E) C) and D)
F) A) and D)

Question 19

The biggest retail contributor to the 1990s productivity boom was:

Accepted Answer

A)   Target.
B)   Kroger.
C)   Walmart.
D)   Walgreen's.E) All of the above
F) None of the above

Question 20

Who does protectionism hurt?

Accepted Answer

A)   domestic producers only
B)   domestic consumers only
C)   international producers only
D)   international producers and domestic consumersE) B) and C)
F) A) and D)

Exam 19: International Trade

The biggest retail contributor to the 1990s productivity boom was:

Correct Answer
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Briefly discuss any benefits of "protectionism".

Correct Answer
verified
Protectionism can allow a new industry t...
View Answer

The U.S. price of sugar is higher than the world price of sugar due primarily to a:

Correct Answer
verified

Use the following to answer questions: Figure: Bananas -(Figure: Bananas) Refer to the figure. If there is a $3 tariff on bananas, domestic consumers buy fewer bananas and domestic producers grow additional bananas.

Correct Answer
verified

Trade moves jobs from import-competing industries to export industries.

Correct Answer
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Use the following to answer questions: Figure: International Trade 4 -(Figure: International Trade 4) Refer to the figure. If, in this figure, the government eliminated free trade, producer surplus would:

Correct Answer
verified

Why does economic growth require job destruction?

Correct Answer
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The United States is not competitive with Brazil in sugar production partly because:

Correct Answer
verified

Use the following to answer questions: Figure: Trade -(Figure: Trade) Refer to the figure. If this figure represents the market for oil and the country imposes no tariffs on international trade, domestic consumption will be:

Correct Answer
verified

Strategic trade protectionism makes:

Correct Answer
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Use the following to answer questions: Figure: International Trade 3 -(Figure: International Trade 3) Refer to the figure. If the government in this diagram eliminates all imports with a tariff, the value of the lost gains from trade is:

Correct Answer
verified

Economic theory supports the existence of specialized majors in college.

Correct Answer
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Which statement is TRUE?

Correct Answer
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Correct Answer
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For strategic trade protectionism to be effective, the:

Correct Answer
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Correct Answer
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Who does protectionism hurt?

Correct Answer
verified

When a country adopts free trade and becomes a net exporter of a good, that good:

Correct Answer
verified

History has shown that one of the most effective tools against child labor is:

Correct Answer
verified

Trade:

Correct Answer
verified

Exam 19: International Trade

The biggest retail contributor to the 1990s productivity boom was:

Correct AnswerverifiedShow Answer

Briefly discuss any benefits of "protectionism".

Correct AnswerverifiedProtectionism can allow a new industry t...View AnswerShow Answer

The U.S. price of sugar is higher than the world price of sugar due primarily to a:

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Bananas -(Figure: Bananas) Refer to the figure. If there is a $3 tariff on bananas, domestic consumers buy ______ fewer bananas and domestic producers grow ______ additional bananas.

Correct AnswerverifiedShow Answer

Trade moves jobs from import-competing industries to export industries.

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: International Trade 4 -(Figure: International Trade 4) Refer to the figure. If, in this figure, the government eliminated free trade, producer surplus would:

Correct AnswerverifiedShow Answer

Why does economic growth require job destruction?

Correct AnswerverifiedShow Answer

The United States is not competitive with Brazil in sugar production partly because:

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Trade -(Figure: Trade) Refer to the figure. If this figure represents the market for oil and the country imposes no tariffs on international trade, domestic consumption will be:

Correct AnswerverifiedShow Answer

Strategic trade protectionism makes:

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: International Trade 3 -(Figure: International Trade 3) Refer to the figure. If the government in this diagram eliminates all imports with a tariff, the value of the lost gains from trade is:

Correct AnswerverifiedShow Answer

Economic theory supports the existence of specialized majors in college.

Correct AnswerverifiedShow Answer

Which statement is TRUE?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For strategic trade protectionism to be effective, the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Who does protectionism hurt?

Correct AnswerverifiedShow Answer

When a country adopts free trade and becomes a net exporter of a good, that good:

Correct AnswerverifiedShow Answer

History has shown that one of the most effective tools against child labor is:

Correct AnswerverifiedShow Answer

Trade:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified
Protectionism can allow a new industry t...
View Answer

Correct Answer
verified

Use the following to answer questions: Figure: Bananas -(Figure: Bananas) Refer to the figure. If there is a $3 tariff on bananas, domestic consumers buy fewer bananas and domestic producers grow additional bananas.

Correct Answer
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Correct Answer
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