A) there are no secondary effects of import restrictions.
B) import restrictions will lower prices in the protected industries.
C) import restrictions cannot create jobs in any industries.
D) U.S. imports provide people in other countries with the purchasing power required for the purchase of U.S. exports.
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A) domestic producers are better off because they sell more goods at the same price.
B) domestic producers are better off because they sell more goods at a higher price.
C) domestic producers are better off because they sell the same quantity of goods at a higher price.
D) domestic consumers are better off because there are more domestically produced goods available.
E) domestic consumers are neither better off nor worse off because imports do not change.
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A) the equilibrium price is $12 and the equilibrium quantity is 300.
B) the equilibrium price is $16 and the equilibrium quantity is 200.
C) the equilibrium price is $16 and the equilibrium quantity is 300.
D) the equilibrium price is $16 and the equilibrium quantity is 450.
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A) they reduce the ability of the U.S. to export products abroad.
B) they acquire the dollars that are necessary to purchase goods, services, and assets from Americans.
C) they reduce the living standards of Americans.
D) they cause the dollar to depreciate.
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A) Redland has a comparative advantage in producing oats.
B) Redland enjoys a comparative advantage in producing both products and could not gain from exchange.
C) Redland should specialize in producing mutton and should trade for oats.
D) In this example, Blueland has nothing to gain through trade with Redland.
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A) No gains from trade are possible.
B) Joint output would be maximized if the United States specialized in producing cars and Japan in producing clothing.
C) Mutual gains from trade could be realized if the United States specialized in clothing production and Japan in car production.
D) The Japanese are the high-cost producers of both cars and clothing.
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A) reducing the foreign supply to the domestic market and, thereby, raising the domestic price.
B) increasing the foreign supply to the domestic market and, thereby, lowering the domestic price.
C) increasing the domestic demand for the product and, thereby, increasing its price.
D) providing the incentive for domestic producers to improve the efficiency of their operation and, thereby, reduce their per-unit costs of production.
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A) improve international trade.
B) increase the ability of people to gain from specialization.
C) lead to black markets and less trade.
D) increase productivity and living standards.
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A) the United States has a comparative advantage relative to Switzerland in producing cheese, and France has a comparative advantage relative to the United States in producing cars.
B) the United States has a comparative advantage relative to France in producing cars, and Switzerland has a comparative advantage relative to the United States in producing cheese.
C) the United States has an absolute advantage relative to Switzerland in producing cheese, and France has an absolute advantage relative to the United States in producing cars.
D) the United States has an absolute advantage relative to France in producing cars, and Switzerland has an absolute advantage relative to the United States in producing cheese.
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A) provide domestic producers with a strong incentive to improve the quality of their products and keep their costs low.
B) will make it more difficult for domestic producers to realize fully the potential gains from economies of scale in production.
C) will make it more difficult for domestic consumers in small countries to purchase from large scale producers.
D) do all of the above.
E) do none of the above.
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A) free rider problem.
B) infant-industry argument.
C) law of comparative advantage.
D) equation of exchange.
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A) the price of domestic Italian wine would decline.
B) Italian wine producers would increase their prices.
C) Italian wine producers would increase their profits.
D) domestic wine production in Italy would expand.
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A) levied a tariff on the goods produced by the cheap foreign labor.
B) subsidized the domestic textile industry so it could compete in international markets.
C) used its resources to produce other items while importing textiles from foreigners.
D) levied a tax on the domestic textile products to penalize the industry for inefficiency.
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A) imports 150 calculators.
B) imports 250 calculators.
C) exports 100 calculators.
D) exports 250 calculators.
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A) it exports more than it imports.
B) its trading partners are experiencing offsetting losses.
C) it exports goods for which it is a high-opportunity cost producer, while importing those for which it is a low-opportunity cost producer.
D) it exports goods for which it is a low-opportunity cost producer, while importing those for which it is a high-opportunity cost producer.
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A) A.
B) A + B.
C) A + C + G.
D) A + B + C + D +E + F.
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A) The domestic price of shoes would rise, and domestic consumption would fall.
B) Both the domestic price of shoes and domestic consumption would rise.
C) Both the domestic price of shoes and domestic consumption would fall.
D) The domestic price of shoes would fall, and domestic consumption would rise.
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The United States would export peas as p...View Answer
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A) is the sale of a good abroad at a cheaper price than what the good is sold for in the producer's domestic market.
B) generally hurts consumers of the nation receiving the "dumped" goods.
C) is generally encouraged by domestic producers of the product being dumped since they are the primary beneficiaries of the dumping.
D) is the sale of a good that is illegal in the producing country to another country.
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A) When economies of scale are important in an industry, the domestic market of a small country may not be large enough to support cost-efficient firms.
B) In small countries, firms in industries where economies of scale are important will tend to export little, if any, of their output.
C) The size of the trade sector (exports plus imports) as a share of GDP will generally be larger in more populous countries than in smaller less-populated countries.
D) Countries with higher trade barriers have higher growth rates.
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