International Trade

9 Questions | Total Attempts: 3614

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International Trade Quizzes & Trivia

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Questions and Answers
  • 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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