Question 1

Which of the following is an argument for restricting trade

Accepted Answer

A)  Trade restrictions make all Canadians better off.
B)  Trade restrictions increase economic efficiency.
C)  Trade restrictions are necessary for economic growth.
D)  Trade restrictions are sometimes necessary for national security.E) All of the above
F) B) and C)

Question 2

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is an argument for restricting trade

Accepted Answer

A)  Trade restrictions make all Canadians better off.
B)  Trade restrictions increase economic efficiency.
C)  Trade restrictions are necessary for economic growth.
D)  Trade restrictions are necessary to protect infant industries.E) None of the above
F) A) and D)

Question 4

Figure 9-12
 
-Refer to Figure 9-12.As a result of the tariff,what would deadweight loss be

Accepted Answer

A)  B
B)  B + D
C)  D + F
D)  EE) B) and D)
F) B) and C)

Question 5

When Ford and General Motors import automobile parts from Mexico at prices below those they must pay in Canada,who is worse off

Accepted Answer

A)  Workers who assemble Ford and General Motors vehicles become worse off.
B)  Canadian consumers, taken as a group, become worse off.
C)  Mexican consumers, taken as a group, become worse off.
D)  Canadian companies that manufacture automobile parts become worse off.E) C) and D)
F) B) and C)

Question 6

Figure 9-10
 
-Refer to Figure 9-10.What would be domestic production and domestic consumption,respectively,after trade

Accepted Answer

A)  300 and 900
B)  600 and 300
C)  600 and 600
D)  600 and 900E) A) and B)
F) A) and C)

Question 7

Figure 9-6
 
-Refer to Figure 9-6.If this country allows free trade in wagons,how much will consumers gain or lose

Accepted Answer

A)  lose by $75
B)  lose by $240
C)  gain by $120
D)  gain by $240E) B) and D)
F) C) and D)

Question 8

Figure 9-11
 
-Refer to Figure 9-11.Before the tariff is imposed,what is government revenue

Accepted Answer

A)  $0
B)  $200
C)  $400
D)  $600E) All of the above
F) C) and D)

Question 9

When a country allows trade and becomes an exporter of a good,what is the result

Accepted Answer

A)  Everyone in the country benefits.
B)  Everyone in the country loses.
C)  The gains of the winners exceed the losses of the losers.
D)  The losses of the losers exceed the gains of the winners.E) A) and D)
F) A) and C)

Question 10

What does it mean for a country if the world price of a product is higher than its domestic price

Accepted Answer

A)  The country should import that product.
B)  The country should no longer produce that product.
C)  The country has a comparative advantage in that product.
D)  The country could benefit by imposing a tariff on that product.E) All of the above
F) None of the above

Question 11

When a country allows trade and becomes an importer of a good,who is better off

Accepted Answer

A)  Both domestic producers and domestic consumers are better off.
B)  Domestic producers are better off, and domestic consumers are worse off.
C)  Domestic producers are worse off, and domestic consumers are better off.
D)  Both domestic producers and domestic consumers are worse off.E) None of the above
F) A) and B)

Question 12

Figure 9-6
 
-Refer to Figure 9-6.With free trade,what would total surplus increase by

Accepted Answer

A)  $60
B)  $75
C)  $120
D)  $145E) B) and D)
F) C) and D)

Question 13

Free trade causes job losses in industries in which a country does not have a comparative advantage,but it also causes job gains in industries in which the country has a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 14

How do many economists feel about protecting infant industries

Accepted Answer

A)  Protection is necessary in order for young industries to compete against foreign companies.
B)  Protection is not necessary for an industry to grow.
C)  Protection is necessary because if young industries are not protected, they may suffer losses.
D)  Protection may not always be necessary for infant industries, but it has proven to be useful in most cases.E) A) and B)
F) B) and C)

Question 15

Since World War II,what reduction in the average tariff has GATT achieved among member countries

Accepted Answer

A)  from about 20 percent to about 10 percent
B)  from about 40 percent to about 5 percent
C)  from about 40 percent to about 20 percent
D)  from about 80 percent to about 20 percentE) A) and B)
F) A) and C)

Question 16

Figure 9-9
 
-Refer to Figure 9-9.What is producer surplus in this market after trade

Accepted Answer

A)  A + B + D
B)  B + C
C)  B + C + D
D)  CE) A) and B)
F) A) and C)

Question 17

Figure 9-8
 
-Figure 9-8 shows the domestic market for solar panels in Germany.What would be the price of solar panels and the quantity demanded in Germany after trade

Accepted Answer

A)  P₀, Q₀
B)  P₁, Q₀
C)  P₁, Q₂
D)  P₂, Q₂E) C) and D)
F) A) and B)

Question 18

Figure 9-9
 
-Refer to Figure 9-9.What is producer surplus plus consumer surplus in this market after trade

Accepted Answer

A)  A + B
B)  A + B + C
C)  A + B + C + D
D)  A + B + DE) A) and B)
F) None of the above

Question 19

Import tariffs cause the quantity of imports to fall.

Accepted Answer

A) True 
 B)False

Question 20

China produces shoes at a lower cost than Canada. As a result, most of the shoes purchased in Canada are made in China. Should this be a concern to anyone in Canada? If so, who should be concerned and why? If not, why not?

Accepted Answer

As a result of the free trade between Ca...

Exam 9: Application: International Trade

Import tariffs cause the quantity of imports to fall.

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When Ford and General Motors import automobile parts from Mexico at prices below those they must pay in Canada,who is worse off

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What does it mean for a country if the world price of a product is higher than its domestic price

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Since World War II,what reduction in the average tariff has GATT achieved among member countries

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Figure 9-8 -Figure 9-8 shows the domestic market for solar panels in Germany.What would be the price of solar panels and the quantity demanded in Germany after trade

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Figure 9-10 -Refer to Figure 9-10.What would be domestic production and domestic consumption,respectively,after trade

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Free trade causes job losses in industries in which a country does not have a comparative advantage,but it also causes job gains in industries in which the country has a comparative advantage.

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Figure 9-11 -Refer to Figure 9-11.Before the tariff is imposed,what is government revenue

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Which of the following is an argument for restricting trade

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When a country allows trade and becomes an exporter of a good,what is the result

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Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

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How do many economists feel about protecting infant industries

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Figure 9-9 -Refer to Figure 9-9.What is producer surplus in this market after trade

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Figure 9-12 -Refer to Figure 9-12.As a result of the tariff,what would deadweight loss be

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When a country allows trade and becomes an importer of a good,who is better off

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Figure 9-9 -Refer to Figure 9-9.What is producer surplus plus consumer surplus in this market after trade

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Figure 9-6 -Refer to Figure 9-6.If this country allows free trade in wagons,how much will consumers gain or lose

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Which of the following is an argument for restricting trade

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China produces shoes at a lower cost than Canada. As a result, most of the shoes purchased in Canada are made in China. Should this be a concern to anyone in Canada? If so, who should be concerned and why? If not, why not?

Correct AnswerverifiedAs a result of the free trade between Ca...View AnswerShow Answer

Figure 9-6 -Refer to Figure 9-6.With free trade,what would total surplus increase by

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As a result of the free trade between Ca...
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