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1 | |
Which country had the largest percent share of the globe's exports in 1997? |
| | A) | Japan |
| | B) | Germany |
| | C) | USA |
| | D) | UK |
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2 | |
The seven largest exporting countries account for almost what percent of the world's exports? |
| | A) | 67 |
| | B) | 50 |
| | C) | 12 |
| | D) | 42 |
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3 | |
Countries need to trade because |
| | A) | World resources are evenly distributed among countries |
| | B) | World resources are unevenly distributed among countries |
| | C) | All products are produced from the same technology |
| | D) | All products are made from the same combinations of resources |
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4 | |
Which of the following are examples of capital intensive goods? |
| | A) | wheat |
| | B) | VCR's |
| | C) | Cars and trucks |
| | D) | Corned beef |
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5 | |
Country "A" and Country "B" both make the same products. Country "A" can make these products more efficiently than country "B". Country "A" is said to have a |
| | A) | Comparative advantage |
| | B) | Absolute advantage |
| | C) | Null advantage |
| | D) | Production advantage |
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6 | |
If Country "A" gives up fewer resources when it trades to get a product from Country "B" then Country " A" is said to have a |
| | A) | Constant cost advantage |
| | B) | Absolute advantage |
| | C) | Comparative advantage |
| | D) | Productive efficiency |
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7 | |
World production will be greater when there is |
| | A) | Self-sufficiency and specialisation |
| | B) | Trade and non-specialised production |
| | C) | Non-specialisation and self-sufficiency |
| | D) | Trade and specialisation |
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8 | |
All of the following are ways that a country's economy can expand beyond its production possibilities boundary except |
| | A) | International trade |
| | B) | Self-sufficiency |
| | C) | Technological progress |
| | D) | Improving education and training |
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9 | |
Through free trade countries can |
| | A) | Take advantage of human specialisation |
| | B) | Get larger real incomes from their fixed supplies of resources |
| | C) | Obtain a wider range of product choices |
| | D) | All of the above |
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10 | |
Togoland Production Possibilities table: | Production Alternatives | | Product | A | B | C | D | E | F | | Jujubes | 0 | 4 | 8 | 12 | 16 | 20 | | Corned Beef | 40 | 32 | 24 | 16 | 8 | 0 |
The data in the table shows that: |
| | A) | Togoland has increasing opportunity costs |
| | B) | Togoland has constant opportunity costs |
| | C) | Togoland has both increasing and constant opportunity costs |
| | D) | None of the above |
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11 | |
What happens to a country's exports when world prices rise relative to domestic prices |
| | A) | None of the remaining |
| | B) | Exports of the product stay the same |
| | C) | Exports of the product increase |
| | D) | Exports of the product decrease |
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12 | |
What happens to a country's imports when world prices fall relative to domestic prices |
| | A) | Imports of the product go up |
| | B) | Imports of the product decrease |
| | C) | Exports of the product stay the same |
| | D) | None of the above |
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13 | |
Which of the following is characteristic of protective tariffs? |
| | A) | They prevent the importation of goods |
| | B) | They specify the maximum amounts of specific commodities which may be imported during a given period of time |
| | C) | They often protect domestic producers from foreign competition |
| | D) | They enable countries to reduce their exports and increase their imports during periods of depression |
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14 | |
The motive for NTB's on goods and services from abroad is to |
| | A) | Improve the economic efficiency of the country |
| | B) | Protect and benefit domestic producers of those goods and services |
| | C) | Reduce the prices of the goods and services produced in that country |
| | D) | Expand the export of goods and services to foreign countries |
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15 | |
When a tariff is imposed on an imported good |
| | A) | The demand for the good increases |
| | B) | The demand for the good decreases |
| | C) | The supply of the good increases |
| | D) | The supply of the good decreases |
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16 | |
Use this graph for the next 5 questions:  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg:: ::/sites/dl/free/0070886695/37629/ch17_macro.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (26.0K)</a>]]> Sd and Dd are the domestic supply and demand for a product and Pw is the world price of that product. In a closed economy, the equilibrium price would be |
| | A) | Pd but in an open economy, the equilibrium price will be Pt |
| | B) | Pd but in an open economy, the equilibrium price will be Pw |
| | C) | Pw but in an open economy, the equilibrium price will be Pd |
| | D) | Pw but in an open economy, the equilibrium price will be Pt |
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17 | |
Refer to Graph One.
Sd and Dd are the domestic supply and demand for a product and Pw is the world price of that product. Assume there is no supply at less than the world price. If there is free trade in this economy and no tariffs, the total revenue going to the foreign producers is shown by |
| | A) | Area C |
| | B) | Areas A and B combined |
| | C) | Areas A,B,E, and F together |
| | D) | Areas D,E,F and G combined |
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18 | |
Sd and Dd are the domestic supply and demand for a product and Pw is the world price of that product. If a per unit tariff were imposed in the amount of Pw x Pt then domestic producers would supply |
| | A) | Q units and foreign producers would supply qu units |
| | B) | S units and foreign producers would supply rt units |
| | C) | R units and foreign producers would supply rt units |
| | D) | T units and foreign producers would supply tu units |
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19 | |
Sd and Dd are the domestic supply and demand for a product and Pw is the world price of that product. Given a per unit tariff in the amount of Pw x Pt, the amount of the tariff revenue paid by consumers of this product is shown by |
| | A) | Area A |
| | B) | Area B |
| | C) | Areas A and B together |
| | D) | Areas E and F together |
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20 | |
Sd and Dd are the domestic supply and demand for a product and Pw is the world price of this product. Assume an import quota is put in place at the point where area B intersects the Dd curve. The amount of revenue going to the government is |
| | A) | There isn't any revenue going to the government. |
| | B) | Area A+B |
| | C) | Areas A+B+E+F |
| | D) | Areas E+F |
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21 | |
Tariffs lead to |
| | A) | A contraction of relatively efficient industries |
| | B) | An overallocation of resources to relatively efficient industries |
| | C) | An increase in the foreign demand for domestically made goods |
| | D) | An underallocation of resources to relatively inefficient industries |
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22 | |
"The nation is in peril!" "We need to protect ourselves from foreign countries that sell their products in our domestic markets at less than the cost of production." This quote would be an example of which kind of protectionist argument? |
| | A) | Diversification for stability |
| | B) | Increasing domestic employment |
| | C) | Protection against dumping |
| | D) | Cheap foreign labour |
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23 | |
Which argument for protection is the least fallacious and most pertinent in Canada today? |
| | A) | The cheap foreign labour argument |
| | B) | The military self-sufficiency argument |
| | C) | The increase-domestic-employment argument |
| | D) | The infant industry argument |
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24 | |
Which of the following is the likely result of Canada using tariffs to protect its high wages and standard of living from cheap foreign labour? |
| | A) | An increase in Canadian exports |
| | B) | A rise in our real GDP |
| | C) | A decrease in the average productivity of Canadian workers |
| | D) | A decrease in the quantity of labour employed by industries making the goods on which tariffs have been levied |
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25 | |
Which is the likely result of imposing tariffs to increase domestic employment |
| | A) | A short-run increase in domestic employment in import industries |
| | B) | A decrease in the tariff rates of foreign countries |
| | C) | A long-run reallocation of workers from export industries to protected domestic industries |
| | D) | A decrease in consumer prices |
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26 | |
The infant industry argument for tariffs |
| | A) | Is especially pertinent to the E.E.C |
| | B) | Generally results in tariffs that are removed after the infant industry has matured |
| | C) | Makes it rather easy to determine which infant industries will become mature with comparative advantage in making their goods |
| | D) | Might better be replaced by an argument for outright subsidies for infant industries |
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27 | |
Trade protectionism is costly to consumers because |
| | A) | The price of the imported good rises |
| | B) | The supply of the imported good goes up |
| | C) | Import competition goes up for domestically made goods |
| | D) | Consumers shift purchases away from domestically made goods |
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2002 McGraw-Hill Higher Education