Question 1

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were open to free trade,domestic producers would produce how many units?

Accepted Answer

A)  45
B)  85
C)  120
D)  75E) All of the above
F) A) and B)

Question 2

Who is likely to be in favor of a country that would be a net-importer if it moved from autarky to free trade?

Accepted Answer

A)  Domestic producers
B)  Domestic consumers
C)  Foreign consumers
D)  None of these is true.E) A) and B)
F) B) and C)

Question 3

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,if the economy were open to free trade,the domestic quantity supplied would:

Accepted Answer

A)  drop from 815 to 250.
B)  drop from 815 to 500.
C)  increase from 250 to 500.
D)  increase from 815 to 1500.E) C) and D)
F) B) and D)

Question 4

Imports are goods and services that are:

Accepted Answer

A)  produced in other countries and consumed domestically.
B)  produced domestically and consumed in other countries.
C)  produced and consumed in other countries.
D)  produced and consumed domestically.E) B) and D)
F) C) and D)

Question 5

The problem of inconsistent standards across nations can be managed by:

Accepted Answer

A)  policymakers making explicit laws about imports for specific countries.
B)  consumers making voluntary purchasing decisions.
C)  policymakers making blanket standards imposed on all imports.
D)  All of these are true.E) A) and D)
F) A) and B)

Question 6

If England buys hockey sticks from Canada,it tells us:

Accepted Answer

A)  England has an absolute advantage over Canada in making hockey sticks.
B)  Canada has an absolute advantage over England in making hockey sticks.
C)  England has the comparative advantage over Canada in making hockey sticks.
D)  Canada has the comparative advantage over England in making hockey sticks.E) All of the above
F) A) and D)

Question 7

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this were depicting an autarky,the amount being bought domestically is:

Accepted Answer

A)  60 at $10 each.
B)  60 at $17 each.
C)  115 at $14 each.
D)  150 at $10 each.E) A) and B)
F) A) and C)

Question 8

Who is likely to be in favor of a country that would be a net-exporter if it moved from autarky to free trade?

Accepted Answer

A)  Domestic producers
B)  Domestic consumers
C)  Foreign producers
D)  None of these is true.E) A) and C)
F) A) and D)

Question 9

When a country has the ability to produce a good or service at a lower opportunity cost than others can,they:

Accepted Answer

A)  have an absolute advantage.
B)  have a comparative advantage.
C)  are free-traders.
D)  should remain self-sufficient.E) B) and D)
F) A) and B)

Question 10

If Spain sells soccer balls to the United States,it tells us:

Accepted Answer

A)  Spain has an absolute advantage over the United States in making soccer balls.
B)  Spain can produce more soccer balls than the United States given the same resources.
C)  Spain has the ability to produce soccer balls at a lower opportunity cost than the United States can.
D)  All of these are true.E) C) and D)
F) A) and D)

Question 11

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were an autarky,consumers would get area:

Accepted Answer

A)  A in consumer surplus.
B)  ABC in consumer surplus.
C)  ABCD in consumer surplus.
D)  ABCDEFG in consumer surplus.E) A) and D)
F) All of the above

Question 12

In general,one of the results of free trade is that the owners of domestically:

Accepted Answer

A)  scarce factors of production lose due to increased competition.
B)  abundant factors of production lose from increased demand.
C)  scarce factors of production win due to increased consumers.
D)  abundant factors of production win from decreased demand.E) A) and C)
F) A) and B)

Question 13

Voluntary exchanges between ____________ generates surplus.

Accepted Answer

A)  firms
B)  countries
C)  individuals
D)  All of these are true.E) A) and B)
F) A) and C)

Question 14

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. 
According to the graph shown,the change in consumer surplus brought about by the imposition of a tariff to an economy previously open to free trade is:

Accepted Answer

A)  an increase of HIJKL.
B)  a loss of HIJKL.
C)  a gain of DE.
D)  a loss of DE.E) A) and B)
F) A) and C)

Question 15

The right decision about what to produce and who to trade with happens:

Accepted Answer

A)  automatically.
B)  when governments publish comparative advantage numbers.
C)  only after firms research the cost of inputs such as labor and raw materials,and the sale prices of different goods you could produce,and calculate the most profitable option.
D)  None of these is true.E) B) and C)
F) None of the above

Question 16

When a price-taking country joins the global market for some good,it:

Accepted Answer

A)  shifts the world demand and supply to the right.
B)  has a negligible effect on the world equilibrium.
C)  shifts the world demand and supply to the left.
D)  shifts the world demand to the right,and the world supply to the left.E) A) and D)
F) A) and B)

Question 17

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According the graph shown,if this economy were open to free trade,it would:

Accepted Answer

A)  import this good,because the domestic price is greater than the world price.
B)  export this good,because the domestic price is greater than the world price.
C)  import this good,because the world price is greater than the domestic price.
D)  export this good,because the world price is greater than the domestic price.E) B) and C)
F) C) and D)

Question 18

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were to open to trade,which amount of surplus would be transferred?

Accepted Answer

A)  Area BC would be transferred to the consumer.
B)  Area BCD would be transferred to the producer.
C)  Area BCD would be transferred to the consumer.
D)  Area BC would be transferred to the producer.E) A) and D)
F) A) and C)

Question 19

As a general rule,free trade:

Accepted Answer

A)  acts to equalize the supply of and demand for factors of production across countries.
B)  causes factor prices to converge across countries.
C)  increases the supply of factors that are domestically scarce.
D)  All of these are true.E) B) and D)
F) None of the above

Question 20

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. 
According to the graph shown,if this economy were to open to trade,consumers would:

Accepted Answer

A)  enjoy a net gain to surplus of BC.
B)  suffer a net loss to surplus of BCD.
C)  suffer a transfer of surplus to the producer of BC.
D)  experience deadweight loss of FG.E) A) and B)
F) C) and D)

Exam 17: International Trade

If England buys hockey sticks from Canada,it tells us:

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Voluntary exchanges between ____________ generates surplus.

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This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this were depicting an autarky,the amount being bought domestically is:

Correct AnswerverifiedShow Answer

Who is likely to be in favor of a country that would be a net-importer if it moved from autarky to free trade?

Correct AnswerverifiedShow Answer

The right decision about what to produce and who to trade with happens:

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Who is likely to be in favor of a country that would be a net-exporter if it moved from autarky to free trade?

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This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy were open to free trade,the domestic quantity supplied would:

Correct AnswerverifiedShow Answer

The problem of inconsistent standards across nations can be managed by:

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In general,one of the results of free trade is that the owners of domestically:

Correct AnswerverifiedShow Answer

When a country has the ability to produce a good or service at a lower opportunity cost than others can,they:

Correct AnswerverifiedShow Answer

As a general rule,free trade:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,the change in consumer surplus brought about by the imposition of a tariff to an economy previously open to free trade is:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,consumers would:

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,which amount of surplus would be transferred?

Correct AnswerverifiedShow Answer

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were an autarky,consumers would get area:

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This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According the graph shown,if this economy were open to free trade,it would:

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Imports are goods and services that are:

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This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were open to free trade,domestic producers would produce how many units?

Correct AnswerverifiedShow Answer

If Spain sells soccer balls to the United States,it tells us:

Correct AnswerverifiedShow Answer

When a price-taking country joins the global market for some good,it:

Correct AnswerverifiedShow Answer

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