Deck 9: International Trade

Question 1

A Japanese-made automobile purchased by a U.S. citizen is an example of a U.S. _____, and a U.S.-made automobile purchased by a Japanese citizen purchasing is an example of a U.S. _____.

A)import; import
B)export; export
C)import; export
D)export; import

Answer 1

C

Question 2

A Korean-made washing machine purchased by a Chinese citizen is an example of a Korean _____, and a Chinese-made washing machine purchased by a Korean citizen is an example of a Korean _____.

A)import; import
B)export; export
C)import; export
D)export; import

Answer 2

D

Question 3

An import is a good or service:

A)purchased from a foreign seller.
B)purchased from a domestic seller.
C)sold to a foreign buyer.
D)sold to a domestic buyer.

Answer 3

A

Question 4

An export is a good or service:

A)purchased from a foreign seller.
B)purchased from a domestic seller.
C)sold to a foreign buyer.
D)sold to a domestic buyer.

Question 5

Argentina and Chile both produce copper and timber. If Chile produces copper much more efficiently than Argentina and timber slightly more efficiently than Argentina, _____ can benefit from trading copper and timber with each other.

A)both countries
B)only Chile
C)only Argentina
D)neither country

Question 6

Russia and Kazakhstan both produce horses and oil. If Kazakhstan is much more efficient than Russia in the production of horses and slightly more efficient than Russia in the production of oil, _____ can benefit from trading horses and oil with each other.

A)both countries
B)only Russian
C)only Kazakhstan
D)neither country

Question 7

Suppose that one hour of labor in Singapore can produce 20 computers or 40 cellphones. Further, suppose that one hour of labor in Ireland can produce 10 computers or 15 cellphones. _____ has a comparative advantage in the production of computers. _____ has a comparative advantage in the production of cellphones.

A)Singapore; Singapore
B)Ireland; Ireland
C)Singapore; Ireland
D)Ireland; Singapore

Question 8

One hour of labor in Mexico can produce 10 avocados or 20 bananas. One hour of labor in Canada can produce four avocados or 16 bananas. _____ has a comparative advantage in the production of avocados. _____ has a comparative advantage in the production of bananas.

A)Mexico; Canada
B)Canada; Mexico
C)Mexico; Mexico
D)Canada; Canada

Question 9

Countries benefit from trade by exporting goods in which their opportunity costs are relatively _____ and importing goods in which their opportunity costs are relatively _____.

A)low; low
B)high; high
C)low; high
D)high; low

Question 10

Countries benefit from trade by importing goods in which their opportunity costs are relatively _____ and exporting goods in which their opportunity costs are relatively _____.

A)low; low
B)high; high
C)low; high
D)high; low

Question 11

(Table: U.S. International Trade in Goods and Services, 2016, in millions of dollars. Details may not equal totals, due to seasonal adjustment and rounding.)
What is the value of goods that the United States exported (in millions of dollars) in 2016?

A)-$751,051
B)$758,888
C)$1,456,957
D)$2,208,008

Question 12

(Table: U.S. International Trade in Goods and Services, 2016, in millions of dollars. Details may not equal totals, due to seasonal adjustment and rounding.)
In 2016, the United States imported ____ million worth of goods.

A)-$751,051
B)$758,888
C)$1,456,957
D)$2,208,008

Question 13

(Table: U.S. International Trade in Goods and Services, 2016, in millions of dollars. Details may not equal totals due to seasonal adjustment and rounding.)
In 2016, the United States was a net _____ of _____ million in goods.

A)importer; $751,051
B)importer; $249,050
C)exporter; $751,051
D)exporter; $249,050

Question 14

(Table: U.S. International Trade in Goods and Services, 2016, in millions of dollars. Details may not equal totals, due to seasonal adjustment and rounding.
In 2016, the United States was a net _____ of _____ million in services.

A)importer; $751,051
B)importer; $249,050
C)exporter; $751,051
D)exporter; $249,050

Question 15

(Table: U.S. International Trade in Goods and Services, 2016, in millions of dollars. Details may not equal totals due to seasonal adjustment and rounding.)
In 2016, the United States was a net _____ of _____ million in goods and services.

A)importer; $502,001
B)importer; $2,215,844
C)exporter; $502,001
D)exporter; $2,215,844

Question 16

(Table: U.S. International Trade in Goods and Services, 2018, in millions of dollars. Details may not equal totals, due to seasonal adjustment and rounding.)
From January to September in 2018, the United States was a net _____ of _____ million in goods.

A)importer; $445,166
B)importer; $650,978
C)exporter; $445,166
D)exporter; $650,978

Question 17

(Table: U.S. International Trade in Goods and Services, 2018, in millions of dollars. Details may not equal totals due to seasonal adjustment and rounding.)
From January to September in 2018, the United States was a net _____ of _____ million in services.

A)importer; $205,812
B)importer; $650,978
C)exporter; $205,812
D)exporter; $650,978

Question 18

(Table: U.S. International Trade in Goods and Services, 2018, in millions of dollars. Details may not equal totals, due to seasonal adjustment and rounding.)
From January to September in 2018, the United States was a net _____ of _____ million in goods and services.

A)importer; $445,166
B)importer; $650,978
C)exporter; $445,166
D)exporter; $650,978

Question 19

Which of the following is an example of a trade cost associated with a U.S. citizen importing a sweater produced in India?

A)the final price of the sweater
B)the cost of the wool used in producing the sweater
C)the cost of the labor used in producing the sweater
D)the cost of the tariff on imported sweaters from India

Question 20

Which of the following is an example of a trade cost incurred when a German citizen imports a bottle of wine produced in France?

A)the cost of the trucking services used in transportation
B)the cost of the grapes used in producing the wine
C)the final price of the bottle of wine
D)the cost of the labor used in producing the wine

Question 21

A trade cost is:

A)the price of a good that is bought or sold abroad.
B)the cost associated with producing a good that is bought or sold abroad.
C)an extra cost incurred as a result of buying or selling a good abroad rather than domestically.
D)the difference in price between a good that is bought or sold abroad rather than domestically.

Question 22

Which of the following is NOT a trade cost?

A)the cost of producing a good
B)the hassle of working across language barriers
C)dealing with foreign laws
D)adapting to different ways of doing business

Question 23

Which of the following is MOST likely to be traded internationally?

A)land
B)hair gel
C)bowling alleys
D)taxi rides

Question 24

Which of the following is LEAST likely to be traded internationally?

A)cloud computing
B)flowers
C)an afternoon bowling
D)bikes

Question 25

Which of the following is MOST likely to be traded internationally?

A)skyscrapers
B)cosmetic surgery
C)a haircut
D)computers

Question 26

Which of the following is LEAST likely to be traded internationally?

A)sports arenas
B)sporting equipment
C)sports trading cards
D)sports broadcasts

Question 27

(Figure: Imports and Exports) From 1930 to 2018, U.S. imports as a share of GDP have _____, and U.S. exports as a share of GDP have _____.

A)increased; decreased
B)decreased; increased
C)increased; increased
D)decreased; decreased

Question 28

(Figure: Imports and Exports) During the 2008 to 2009 financial crisis, imports as a share of GDP fell in the United States. Which of the following could explain this phenomenon?

A)The percentage decrease in imports was greater than the percentage decrease in GDP.
B)The percentage decrease in imports was less than the percentage decrease in GDP.
C)The percentage increase in imports was greater than the percentage decrease in GDP.
D)The percentage increase in imports was less than the percentage decrease in GDP.

Question 29

(Figure: Imports and Exports) During the 2008 to 2009 financial crisis, exports as a share of GDP fell in the United States. Which of the following could explain this phenomenon?

A)The percentage decrease in exports was greater than the percentage decrease in GDP.
B)The percentage decrease in exports was less than the percentage decrease in GDP.
C)The percentage increase in exports was greater than the percentage decrease in GDP.
D)The percentage increase in exports was less than the percentage decrease in GDP.

Question 30

Which of the following is NOT a reason for the increase in international trade over the past century?

A)the improvements in air travel
B)increases in tariff rates across countries
C)the increased adoption of English
D)the standardization of shipping containers

Question 31

Which of the following is NOT a source of comparative advantage?

A)specialized skills
B)mass production
C)abundant inputs
D)global supply chains

Question 32

Which of the following is a source of comparative advantage?

A)low tariff rates
B)abundant inputs
C)low trade costs
D)global supply chains

Question 33

Which of the following is a source of comparative advantage?

A)small-scale production
B)scarce inputs
C)specialized skills
D)high tariff rates

Question 34

The United States has a comparative advantage in _____-skilled labor. This explains why the U.S. is a net _____ of manufactured goods.

A)high; importer
B)high; exporter
C)low; importer
D)low; exporter

Question 35

The United States has a comparative disadvantage in _____-skilled labor. This explains why the U.S. is a net _____ of high-skilled services.

A)high; importer
B)high; exporter
C)low; importer
D)low; exporter

Question 36

Vietnam has a comparative disadvantage in _____-skilled labor. This explains why Vietnam is a net _____ of high-skilled services.

A)high; importer
B)high; exporter
C)low; importer
D)low; exporter

Question 37

Vietnam has a comparative advantage in _____-skilled labor. This explains why Vietnam is a net _____ of manufactured goods.

A)high; importer
B)high; exporter
C)low; importer
D)low; exporter

Question 38

Which of the following is a term economists use to explain why specific industries can become more efficient over time?

A)cost-benefit principle
B)learning by doing
C)the marginal principle
D)opportunity cost

Question 39

The world demand curve slopes downward because, as the world price of a product falls:

A)consumers want to buy a smaller quantity.
B)consumers want to buy a larger quantity.
C)producers want to sell a smaller quantity.
D)producers want to sell a larger quantity.

Question 40

The world supply curve slopes upward because, as the world price of a product falls:

A)consumers want to buy a smaller quantity.
B)consumers want to buy a larger quantity.
C)producers want to sell a smaller quantity.
D)producers want to sell a larger quantity.

Question 41

The world demand curve slopes downward because, as the world price of a product increases:

A)consumers want to buy a smaller quantity.
B)consumers want to buy a larger quantity.
C)producers want to sell a smaller quantity.
D)producers want to sell a larger quantity.

Question 42

The world supply curve slopes upward because, as the world price of a product increases:

A)consumers want to buy a smaller quantity.
B)consumers want to buy a larger quantity.
C)producers want to sell a smaller quantity.
D)producers want to sell a larger quantity.

Question 43

(Figure: Market for TVs) According to the figure, the equilibrium world price of TVs is:

A)$50.
B)$100.
C)$500.
D)$1,000.

Question 44

(Figure: Market for TVs) According to the figure, the equilibrium world quantity of TVs (in millions) sold is:

A)50.
B)100.
C)500.
D)1,000.

Question 45

(Figure: Market for TVs) According to the figure, at a world price of $600:

A)the quantity demanded exceeds the quantity supplied, and there is downward pressure on the world price.
B)the quantity demanded exceeds the quantity supplied, and there is upward pressure on the world price.
C)the quantity supplied exceeds the quantity demanded, and there is downward pressure on the world price.
D)the quantity supplied exceeds the quantity demanded, and there is upward pressure on the world price.

Question 46

(Figure: Market for TVs) According to the figure, at a world price of $400:

A)the quantity demanded exceeds the quantity supplied, and there is downward pressure on the world price.
B)the quantity demanded exceeds the quantity supplied, and there is upward pressure on the world price.
C)the quantity supplied exceeds the quantity demanded, and there is downward pressure on the world price.
D)the quantity supplied exceeds the quantity demanded, and there is upward pressure on the world price.

Question 47

(Figure: Market for TVs 2) According to the figure, if there is no international trade, the equilibrium price in this market is:

A)$50.
B)$60.
C)$500.
D)$600.

Question 48

(Figure: Market for TVs 2) According to the figure, if there is no international trade, the equilibrium quantity (in thousands) in this market is:

A)50.
B)60.
C)500.
D)600.

Question 49

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of a television is $500, buyers and sellers will make exchanges at a price of _____ because buyers will refuse to pay _____ than the world price.

A)$500; less
B)$500; more
C)$600; less
D)$600; more

Question 50

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $400, buyers and sellers will make exchanges at a price of _____ because buyers will refuse to pay _____ than the world price.

A)$400; less
B)$400; more
C)$600; less
D)$600; more

Question 51

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $500, the quantity demanded is _____, and the quantity supplied is _____ at the world price.

A)20,000; 80,000
B)80,000; 20,000
C)40,000; 70,000
D)70,000; 40,000

Question 52

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of a television is $400, the quantity demanded is _____, and the quantity supplied is _____ at the world price.

A)80,000; 20,000
B)20,000; 80,000
C)40,000; 70,000
D)70,000; 40,000

Question 53

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $500, the quantity demanded is _____, and domestic suppliers will sell _____ units to domestic consumers.

A)70,000; 30,000
B)70,000; 40,000
C)80,000; 30,000
D)80,000; 40,000

Question 54

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of a television is $400, the quantity demanded is _____, and domestic suppliers will sell _____ units to domestic consumers.
​

A)70,000; 20,000
B)70,000; 60,000
C)80,000; 20,000
D)80,000; 60,000

Question 55

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $500, domestic consumers will purchase _____ units from domestic producers and _____ units from foreign producers.

A)20,000; 30,000
B)20,000; 60,000
C)40,000; 30,000
D)40,000; 60,000

Question 56

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $400, domestic consumers will purchase _____ units from domestic producers and _____ units from foreign producers.

A)20,000; 30,000
B)20,000; 60,000
C)40,000; 30,000
D)40,000; 60,000

Question 57

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $500:

A)domestic consumers will import 30,000 units.
B)domestic consumers will export 30,000 units.
C)domestic producers will import 40,000 units.
D)domestic producers will export 40,000 units.

Question 58

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $400:

A)domestic consumers will import 60,000 units.
B)domestic consumers will export 60,000 units.
C)domestic producers will import 20,000 units.
D)domestic producers will export 20,000 units.

Question 59

(Figure: Market for Pants) According to the figure, if there is no international trade in this market, the value of the consumer surplus is:

A)$1,600,000.
B)$800,000.
C)$2,500,000.
D)$1,250,000.

Question 60

(Figure: Market for Pants) According to the figure, if there is international trade in this market, and the world price of a pair of pants is $40, the value of the consumer surplus is:

A)$1,600,000.
B)$800,000.
C)$2,500,000.
D)$1,250,000.

Question 61

(Figure: Market for Pants) According to the figure, if there is international trade in this market, and the world price of a pair of pants is $30, the value of the consumer surplus is:

A)$1,600,000.
B)$800,000.
C)$3,600,000.
D)$1,800,000.

Question 62

(Figure: Market for Pants) According to the figure, if there is no international trade in this market, the value of the domestic producer surplus is:

A)$1,600,000.
B)$800,000.
C)$2,500,000.
D)$1,250,000.

Question 63

(Figure: Market for Pants) According to the figure, if there is international trade in this market, and the world price of a pair of pants is $40, the value of the domestic producer surplus is:

A)$1,600,000.
B)$800,000.
C)$900,000.
D)$450,000.

Question 64

(Figure: Market for Pants) According to the figure, if there is international trade in this market, and the world price of a pair of pants is $30, the value of the domestic producer surplus is:

A)$1,600,000.
B)$800,000.
C)$400,000.
D)$200,000.

Question 65

(Figure: Market for Pants) Suppose that the world price of a pair of pants is $40. According to the figure, the total domestic surplus in the free-trade equilibrium _____ the total domestic surplus in the no-international trade equilibrium by _____.
​

A)exceeds; $100,000
B)falls short of; $200,000
C)falls short of; $100,000
D)exceeds; $200,000

Question 66

(Figure: Market for Pants) Suppose that the world price of a pair of pants is $30. According to the figure, the total domestic surplus in the free-trade equilibrium _____ the total domestic surplus in the no-international trade equilibrium by _____.

A)exceeds; $200,000
B)exceeds; $400,000
C)falls short of; $200,000
D)falls short of; $400,000

Question 67

(Figure: Market for Pants) Suppose that the world price of a pair of pants is $40. According to the figure, international trade will lead to _____ in the domestic producer surplus and _____ in the domestic consumer surplus.

A)an increase; an increase
B)an increase; a decrease
C)a decrease; an increase
D)a decrease; a decrease

Question 68

(Figure: Market for Pants) The world price of a pair of pants is $30. According to the figure, opening up to international trade will lead to _____ in the domestic producer surplus and _____ in the domestic consumer surplus.

A)an increase; an increase
B)an increase; a decrease
C)a decrease; an increase
D)a decrease; a decrease

Question 69

(Figure: Market for TVs 2) The world price of televisions is $500. According to the figure, international trade will lead to _____ in the domestic producer surplus and _____ in the domestic consumer surplus.

A)an increase; an increase
B)an increase; a decrease
C)a decrease; an increase
D)a decrease; a decrease

Question 70

(Figure: Market for TVs 2) The world price of televisions is $400. According to the figure, opening up to international trade will _____ the domestic producer surplus and _____ the domestic consumer surplus.

A)increase; increase
B)increase; decrease
C)decrease; increase
D)decrease; decrease

Question 71

(Figure: Market for Washing Machines) According to the figure, the equilibrium world price of washing machines is:

A)$50.
B)$100.
C)$600.
D)$750.

Question 72

(Figure: Market for Washing Machines) According to the figure, the equilibrium world quantity of washing machines (in thousands) sold is:

A)50.
B)100.
C)600.
D)750.

Question 73

(Figure: Market for Washing Machines) According to the figure, at a world price of $700:

A)the quantity demanded exceeds the quantity supplied, and there is downward pressure on the world price.
B)the quantity demanded exceeds the quantity supplied, and there is upward pressure on the world price.
C)the quantity supplied exceeds the quantity demanded, and there is downward pressure on the world price.
D)the quantity supplied exceeds the quantity demanded, and there is upward pressure on the world price.

Question 74

(Figure: Market for Washing Machines) According to the figure, at a world price of $400:

A)the quantity demanded exceeds the quantity supplied, and there is downward pressure on the world price.
B)the quantity demanded exceeds the quantity supplied, and there is upward pressure on the world price.
C)the quantity supplied exceeds the quantity demanded, and there is downward pressure on the world price.
D)the quantity supplied exceeds the quantity demanded, and there is upward pressure on the world price.

Question 75

(Figure: Market for Engines) According to the figure, if there is no international trade, the equilibrium price in this market is:

A)$500.
B)$600.
C)$700.
D)$800.

Question 76

(Figure: Market for Engines) According to the figure, if there is no international trade, the equilibrium quantity in this market is:

A)500.
B)600.
C)900.
D)1,000.

Question 77

(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $800, buyers and sellers will make exchanges at a price of _____ because sellers will refuse to sell for _____ than the world price.

A)$600; less
B)$600; more
C)$800; less
D)$800; more

Question 78

(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $1,000, buyers and sellers will make exchanges at a price of _____ because sellers will refuse to sell for _____ than the world price.

A)$1,000; less
B)$1,000; more
C)$600; less
D)$600; more

Question 79

(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of an engine is $800, the quantity demanded is _____, and the quantity supplied is _____ at the world price.

A)500; 800
B)800; 500
C)400; 1,000
D)1,000; 400

Question 80

(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $1,000, the quantity demanded is _____, and the quantity supplied is _____ at the world price.

A)500; 800
B)800; 500
C)400; 1,000
D)1,000; 400