International Trade
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- 1.Countries usually impose restrictions on free foreign trade to...
- A.
Protect foreign producers
- B.
Protect foreign consumers
- C.
Protect domestic producers
- D.
Protect domestic consumers
- 2.If a country allows trade and the domestic price of a good is higher than the world price,
- A.
The country will become an exporter of the good
- B.
The country will become an importer of the coogd
- C.
The country will neither import nor export
- D.
Additional information about demand is needed to determine whether the country will export or import the good
- 3.When a country allows for trade and becomes an exporter of the good, which of the following would NOT be true?
- A.
The price paid by the domestic consumer of the good increases
- B.
The price received by the domestic producers of the good increases
- C.
The losses of domestic consumers exceed the gains of domestic producers
- D.
The gains of domestic producers exceed the losses of domestic consumers
- 4.If Brazil has a comparative advantage in producing rubber, and trade in rubber is allowed,
- A.
Brazil will become an importer of rubber
- B.
Brazil will become an exporter of rubber
- C.
Brazil could become either an exporter or importer
- D.
It is impossible to determine whether Brazil will become an importer or an exporter of rubber without additional information about rubber prices
- 5.The US is importing down pillows. The world price of these pillows is $25. the US imposes a $10 tariff on pillows. The US is a price taker in the pillow market. As a result of the tariff...
- A.
The US price of pillows will be $25 and the quantity of pillows purchased will decrease
- B.
The US price of pillows will be $35 and the quantity of pillows purchased will decrease
- C.
The US price of pillows will be $25 and the quantity of pillows purchased will increase
- D.
The US price of pillows will be $35 and the quantity of pillows purchased will increase
- 6.The US is importing down pillows. The world price of these pillows is $25. the US imposes a $10 tariff on pillows. The US is a price taker in the pillow market. As a result of the tariff...
- A.
US consumers of pillows will gain and the US producers will lose
- B.
US consumers of pillows will lose and US producers will gain
- C.
US consumers of pillows will gain and US producers will gain
- D.
US consumers of pillows will lose and US producers will lose
- 7.A tariff and import quota will both
- A.
Increase the quantity of imports and raise domestic price
- B.
Increase the quantity of imports and lower the domestic price
- C.
Reduce the quantity of imports and raise the domestic price
- D.
Reduce the quantity of imports and lower the domestic price
- 8.Which of the following is an argument for restricting trade?
- A.
Trade restrictions make Americans better off
- B.
Trade restrictions increase economic efficiency
- C.
Trade restrictions are necessary for economic growth
- D.
Trade restrictions are necessary for economic growth
- 9.The infant industry argument...
- A.
Is based on the belief that protecting industries when they are young will pay off later
- B.
Is based on the belief that protecting industries producing goods and services for infants is necessary if country is have healthy children
- C.
Has the support of most economists
- D.
Has proven to be correct in nearly all cases
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