Deck 18: International Economics

Question 1

For country A,an import is a good produced in:

A) country B and purchased by residents of country A.
B) country A and purchased by residents of country A.
C) country A and purchased by residents of country B.
D) country B and purchased by residents of country B.
E) the domestic economy.

Answer 1

country B and purchased by residents of country A.

Question 2

Which country has the world's biggest economy?

A) Japan
B) Germany
C) the United States
D) China
E) India

Answer 2

the United States

Question 3

Florida's nice beaches and subtropical climate give the state ________ in tourism.

A) a comparative advantage
B) specialization
C) a trade benefit
D) higher income than all other states
E) self-sufficiency

Answer 3

a comparative advantage

Question 4

Use the following scenario to answer the questions that follow.
Esther and Albert produce hamburgers and hot dogs. Esther can produce six hamburgers per hour or four hot dogs per hour. Albert can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Esther's opportunity cost of one hot dog is ________ hamburgers.

A) 3
B) 1.5
C) 6
D) 4
E) 8

Question 5

Use the following scenario to answer the questions that follow.
Esther and Albert produce hamburgers and hot dogs. Esther can produce six hamburgers per hour or four hot dogs per hour. Albert can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Albert's opportunity cost of one hamburger is ________ hot dog(s).

A) 1/3
B) 1
C) 6
D) 4
E) 8

Question 6

Which two countries buy the most U.S.exports?

A) China and Japan
B) China and Mexico
C) Canada and Mexico
D) Canada and Japan
E) Mexico and Japan

Question 7

Trade surplus is:

A) the sum of a nation's total exports and total imports.
B) the difference between a nation's total exports and total imports.
C) when a nation exports more than it imports.
D) when a nation imports more than it exports.
E) when a nation no longer feels it has the need for trade partners.

Question 8

In 2013,60% of goods imported by the United States came from just seven nations.Which of the following nations was NOT one of those seven?

A) Australia
B) South Korea
C) Japan
D) Mexico
E) Canada

Question 9

In recent years,the United States has:

A) exported more services abroad than it has imported.
B) imported more services from abroad than it has exported.
C) had a small goods trade surplus with Japan.
D) had a large goods trade surplus with the rest of the world.
E) fallen to third behind Japan and Germany in the list of leading export nations (absolute volume basis).

Question 10

Country A has a comparative advantage over country B in producing a good if:

A) country A can produce more of the good than country B can in a given time period.
B) country A has to trade off more than country B does to produce the good.
C) country A has a lower opportunity cost of producing the good than does country B.
D) country A has a higher opportunity cost of producing the good than does country B.
E) country B can produce more of the good than country A can in a given time period.

Question 11

Use the following scenario to answer the questions that follow.
Esther and Albert produce hamburgers and hot dogs. Esther can produce six hamburgers per hour or four hot dogs per hour. Albert can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Albert's opportunity cost of one hot dog is ________ hamburgers.

A) 3
B) 1.5
C) 6
D) 4
E) 8

Question 12

For country A,an export is a good produced in:

A) country B and purchased by residents of country A.
B) country A and purchased by residents of country A.
C) country A and purchased by residents of country B.
D) country B and purchased by residents of country B.
E) any other country.

Question 13

Trade balance is:

A) the sum of a nation's total exports and total imports.
B) the difference between a nation's total exports and total imports.
C) when a nation exports more than it imports.
D) when a nation imports more than it exports.
E) when a nation no longer feels it has the need for trade partners.

Question 14

In 2013,60% of goods imported by the United States came from just seven nations.Which of the following nations was one of those seven?

A) Australia
B) the United Kingdom
C) Argentina
D) India
E) France

Question 15

An economy that trades with the rest of the world is a(n):

A) open economy.
B) command economy.
C) trade economy.
D) closed economy.
E) autarky.

Question 16

Use the following scenario to answer the questions that follow.
Esther and Albert produce hamburgers and hot dogs. Esther can produce six hamburgers per hour or four hot dogs per hour. Albert can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Esther's opportunity cost of one hamburger is ________ hot dog(s).

A) 2/3
B) 1
C) 6
D) 4
E) 8

Question 17

Use the following scenario to answer the questions that follow.
Suppose that Canada, an industrialized nation, and Mexico, a developing nation, both produce clothes and cars. The real wage in Mexico is lower than in Canada. The countries have a free-trade agreement. Each nation will find a comparative advantage.
Which country benefits from this free-trade agreement?

A) Canada
B) Mexico
C) neither of them
D) both of them
E) not enough information to determine

Question 18

Use the following scenario to answer the questions that follow.
Suppose that Canada, an industrialized nation, and Mexico, a developing nation, both produce clothes and cars. The real wage in Mexico is lower than in Canada. The countries have a free-trade agreement. Each nation will find a comparative advantage.
Which country's consumers will benefit from the free-trade agreement?

A) neither
B) Canada
C) both
D) Mexico
E) not enough information to determine

Question 19

Trade deficit is:

A) the sum of a nation's total exports and total imports.
B) the difference between a nation's total exports and total imports.
C) when a nation exports more than it imports.
D) when a nation imports more than it exports.
E) when a nation no longer feels it has the need for trade partners.

Question 20

For nearly four decades,the United States has had a:

A) trade balance.
B) trade surplus.
C) trade deficit.
D) ban on imports.
E) ban on exports.

Question 21

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
If both Amy and Jim produce only cheese,how much cheese can they produce per year?

A) 2,500 pounds
B) 5,000 pounds
C) 7,500 pounds
D) 10,000 pounds
E) 12,500 pounds

Question 22

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
If both Amy and Jim produce the good for which each has a comparative advantage,total output of this economy will be:

A) 10,000 pounds of cheese.
B) 30 houses.
C) 10,000 pounds of cheese and 30 houses.
D) 5,000 pounds of cheese.
E) 5,000 pounds of cheese and 20 houses.

Question 23

Use the following scenario to answer the questions that follow.
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,which of the following is true?

A) Karl has a comparative advantage in producing cars but not trucks.
B) Karl has a comparative advantage in producing trucks but not cars.
C) Karl has a comparative advantage in producing both goods.
D) Karl has a comparative advantage in producing neither good.
E) Karl does not have any comparative advantage.

Question 24

Use the following scenario to answer the questions that follow.
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Karl's opportunity cost of one car is ________ truck(s).

A) 1/4
B) 1/2
C) 2
D) 4
E) 6

Question 25

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
Jim's opportunity cost of producing one house is ________ pound(s)of cheese.

A) 1/250
B) 1/20
C) 20
D) 250
E) 500

Question 26

Use the following scenario to answer the questions that follow.
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,which of the following is true?

A) Rosa has a comparative advantage in producing basketballs but not footballs.
B) Rosa has a comparative advantage in producing footballs but not basketballs.
C) Rosa has a comparative advantage in producing both goods.
D) Rosa has a comparative advantage in producing neither good.
E) Rosa does not have any comparative advantage.

Question 27

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
Jim's opportunity cost of producing one pound of cheese is ________ house(s).

A) 1/500
B) 1/250
C) 1/10
D) 250
E) 500

Question 28

Use the following scenario to answer the questions that follow.
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Pete's opportunity cost of one truck is ________ car(s).

A) 3/4
B) 1 1/3
C) 3
D) 4
E) 6

Question 29

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
By the principle of comparative advantage,Amy should specialize in producing:

A) both cheese and houses.
B) cheese.
C) houses.
D) neither cheese nor houses.
E) a little of both goods.

Question 30

Use the following scenario to answer the questions that follow.
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Dirk's opportunity cost of one basketball is ________ football(s).

A) 1 1/3
B) 1
C) 3/4
D) 4
E) 3

Question 31

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
Amy's opportunity cost of producing one pound of cheese is ________ house(s).

A) 1/250
B) 1/20
C) 20
D) 250
E) 500

Question 32

Use the following scenario to answer the questions that follow.
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Rosa's opportunity cost of one basketball is ________ football(s).

A) 1/3
B) 1
C) 6
D) 4
E) 8

Question 33

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
Amy has a comparative advantage in the production of ________,and Jim has a comparative advantage in the production of ________.

A) houses; houses
B) houses; cheese
C) cheese; houses
D) both goods; houses
E) both goods; cheese

Question 34

Use the following scenario to answer the questions that follow.
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Dirk's opportunity cost of one football is ________ basketball(s).

A) 3/4
B) 1 1/3
C) 3
D) 4
E) 6

Question 35

Use the following scenario to answer the questions that follow.
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Pete's opportunity cost of one car is ________ truck(s).

A) 2/3
B) 1/3
C) 3/4
D) 4
E) 3

Question 36

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
By the principle of comparative advantage,Jim should specialize in producing:

A) both cheese and houses.
B) cheese.
C) houses.
D) neither cheese nor houses.
E) a little of both goods.

Question 37

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
What is the opportunity cost for Smith to produce one computer?

A) 1/4 smartphone
B) 1/2 smartphone
C) 1 smartphone
D) 2 smartphones
E) 4 smartphones

Question 38

Use the following scenario to answer the questions that follow.
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Rosa's opportunity cost of one football is ________ basketballs.

A) 4
B) 1.5
C) 6
D) 3
E) 8

Question 39

Use the following scenario to answer the questions that follow.
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Karl's opportunity cost of one truck is ________ cars.

A) 4
B) 1.5
C) 2
D) 3
E) 8

Question 40

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
Amy's opportunity cost of producing one house is ________ pound(s)of cheese.

A) 1/250
B) 1/20
C) 20
D) 250
E) 500

Question 41

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
What is the opportunity cost for Smith to produce one smartphone?

A) 1/4 computer
B) 1/2 computer
C) 1 computer
D) 2 computers
E) 4 computers

Question 42

Consider the following scenario. Phillipa and Daveed produce baseballs and golf balls. Phillipa can produce six baseballs per hour or four golf balls per hour. Daveed can produce three baseballs per hour or one golf ball per hour.
Which of the following statements is true?

A) Phillipa has a comparative advantage in producing baseballs but not golf balls.
B) Phillipa has a comparative advantage in producing golf balls but not baseballs.
C) Phillipa has a comparative advantage in producing both goods.
D) Deveed has a comparative advantage in producing golf balls, but not baseballs.
E) Neither Phillipa nor Daveed have any comparative advantage.

Question 43

The ability of one person or nation to produce a good at a lower opportunity cost than another is called a(n)________ advantage.

A) market
B) absolute
C) specialization
D) comparative
E) specific

Question 44

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
To maximize total output,Smith should specialize in producing ________,whereas Ricardo should specialize in producing ________.

A) computers; smartphones
B) smartphones; computers
C) computers; computers
D) smartphones; smartphones
E) smartphones and computers; neither good

Question 45

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
________ has the comparative advantage in computers and ________ has the comparative advantage in smartphones.

A) Smith; Smith
B) Smith; Ricardo
C) Ricardo; Smith
D) Ricardo; Ricardo
E) Neither; Smith

Question 46

A tariff is a tax imposed on ________ good.

A) an imported
B) a luxury
C) an illegal
D) the most popular
E) a domestic

Question 47

In general,a nation can enjoy a higher standard of living by ________ than by being self-sufficient.

A) increasing its versatility
B) avoiding trade with other nations
C) specializing and trading
D) taxing imported goods
E) producing on the PPF curve

Question 48

A society could achieve a higher level of productivity if:

A) each person in the society is a jack-of-all-trades.
B) it takes advantage of each individual's comparative advantage.
C) it does not trade with other nations.
D) it does not tax imported goods.
E) it does not limit exports.

Question 49

Use the following graph to answer the questions that follow.

What is the price of cars if this is a non-trading (closed)economy?

A) $6,000 per car
B) $8,000 per car
C) $10,000 per car
D) $14,000 per car
E) $24,000 per car

Question 50

A tariff:

A) is a strict enforcement of health laws.
B) is a voluntary agreement between two countries to limit exports.
C) is a tax on imports.
D) is a limit on the quantity of a good that can be imported into a country.
E) subsidizes the production of goods leaving the country.

Question 51

There is a 5% average tax on imported goods in the United States.This tax is known as a(n):

A) income tax.
B) sales tax.
C) tariff.
D) quota.
E) importer tax.

Question 52

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
What is the opportunity cost for Ricardo to produce one computer?

A) 1/4 smartphone
B) 1/2 smartphone
C) 1 smartphone
D) 2 smartphones
E) 4 smartphones

Question 53

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
What is the opportunity cost for Ricardo to produce one smartphone?

A) 1/4 computer
B) 1/2 computer
C) 1 computer
D) 2 computers
E) 4 computers

Question 54

According to the principle of comparative advantage,trade between two countries will benefit:

A) neither country.
B) the country with lower production costs.
C) the country with higher production costs.
D) both countries.
E) all workers.

Question 55

The United States feels that it has become too dependent on oil from Saudi Arabia,so it charges a tax of $10 per barrel on oil that can be imported from Saudi Arabia.This is an example of a(n):

A) non-tariff trade barrier.
B) import quota.
C) tariff.
D) export subsidy.
E) import subsidy.

Question 56

An example of a tariff is:

A) Japanese automobile manufacturers agreeing to limit exports to the United States.
B) a decision by the United States to limit South Korean television imports to 100,000 per year.
C) France charging an additional 10% tax on imports of Vietnamese clothing.
D) a decision by Saudi Arabia to reduce oil exports to India by 100,000 barrels.
E) Chinese toy manufacturers agreeing to reduce exports to the United States.

Question 57

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
If Smith and Ricardo spend one-half of their time producing computers and the other half of their time producing smartphones,what will be the total output per day?

A) 4 computers and 12 smartphones
B) 5 computers and 14 smartphones
C) 6 computers and 16 smartphones
D) 8 computers and 22 smartphones
E) 10 computers and 28 smartphones

Question 58

If this economy produces more than 20 houses per year,the opportunity cost of a house will ________ because ________.

A) decrease; production will be specialized
B) increase; an input with a higher opportunity cost must be used
C) decrease; inputs will be obtained at lower costs
D) increase; all gains from trade have already been exploited
E) remain the same; Amy and Jim produce in constant ratios regardless of the level of output

Question 59

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
What is the maximum number of each item that can be produced if each worker fully specializes and produces according to his comparative advantage?

A) 4 computers and 12 smartphones
B) 5 computers and 14 smartphones
C) 6 computers and 16 smartphones
D) 8 computers and 22 smartphones
E) 10 computers and 28 smartphones

Question 60

A tax on imports is known as a(n):

A) import subsidy.
B) non-tariff trade barrier.
C) tariff.
D) voluntary quota.
E) quota.

Question 61

One argument for trade restriction focuses on new industries.It can be summarized in the following manner:

A) trade barriers must be used to protect all domestic workers.
B) tariffs imposed to aid new industries should never be removed.
C) new industries are usually capable of competing with established rivals.
D) new industries need to be shielded in their early stages.
E) trade barriers can be used to enhance national security.

Question 62

Many people argue that certain industries,such as weapons,energy,and transportation,should be protected by trade barriers in the interest of:

A) national infrastructure.
B) national security.
C) the unemployment rate in those industries.
D) technological advancement.
E) economic independence.

Question 63

Use the following graph to answer the questions that follow.

If this is a trading (open)economy,the quantity of cars (in thousands)supplied by the domestic producers will be:

A) 20.
B) 40.
C) 60.
D) 80.
E) 100.

Question 64

When a foreign supplier tries to "dump" goods into another country in order to gain a foothold in a foreign market,this is often a result of ________ within the foreign country.

A) tariffs
B) restrictions
C) subsidies
D) unemployment
E) changed preferences

Question 65

Use the following graph to answer the questions that follow.

In a trading (open)economy,the quantity of TVs (in thousands)demanded in the domestic market will be:

A) 30.
B) 60.
C) 90.
D) 120.
E) 150.

Question 66

Use the following graph to answer the questions that follow.

If this is a non-trading (closed)economy,the price of a TV will be:

A) $75.
B) $125.
C) $175.
D) $225.
E) $275.

Question 67

Use the following graph to answer the questions that follow.

How many cars (in thousands)will this country import in a trading (open)economy situation?

A) 20
B) 40
C) 60
D) 80
E) 100

Question 68

One of the reasons given for the imposition of a protectionist policy such as a tariff is to:

A) aid other nations in developing their own industries.
B) increase the welfare of foreign consumers.
C) increase the welfare of domestic consumers.
D) protect domestic workers from foreign competition.
E) slow domestic production.

Question 69

Use the following graph to answer the questions that follow.

If this is a trading (open)economy,quantity demanded of cars (in thousands)will be:

A) 20.
B) 40.
C) 60.
D) 80.
E) 100.

Question 70

Use the following graph to answer the questions that follow.

If this is a trading (open)economy,the price of a car will be ________ per car.

A) $6,000
B) $8,000
C) $10,000
D) $14,000
E) $24,000

Question 71

Which of the following is NOT one of the four main reasons given for the persistence of trade barriers?

A) national security
B) protection of infant industries
C) retaliation for dumping
D) favors to special interests
E) scarcity of natural resources

Question 72

Use the following graph to answer the questions that follow.

If this is a non-trading (closed)economy,the number of TVs exchanged (in thousands)will be:

A) 30.
B) 60.
C) 90.
D) 120.
E) 150.

Question 73

A possible explanation that a nation might offer for the imposition of a protectionist policy such as a tariff is to:

A) protect an infant industry from foreign competitors.
B) encourage specialization in the good in which the nation has a comparative advantage.
C) slow domestic production.
D) increase the level of imports.
E) give consumers more foreign-made options.

Question 74

Use the following graph to answer the questions that follow.

In a trading (open)economy,the quantity of TVs (in thousands)supplied in the domestic market will be:

A) 30.
B) 60.
C) 90.
D) 120.
E) 150.

Question 75

When a foreign supplier sells a good below the price it charges in its home country,this is called:

A) undercutting.
B) releasing.
C) expelling.
D) dumping.
E) wholesaling.

Question 76

Use the following graph to answer the questions that follow.

If this is a non-trading (closed)economy,how many cars (in thousands)will be exchanged?

A) 20
B) 40
C) 60
D) 80
E) 100

Question 77

Use the following graph to answer the questions that follow.

In a trading (open)economy,the price of a TV will be:

A) $75.
B) $125.
C) $175.
D) $225.
E) $275.

Question 78

Assume there is a 35% tariff on bananas imported into the United States.Also,assume that the market competition is at its beginning and the law of one price is not in effect.If the domestic market price of Hawaiian bananas is one dollar per bunch,imported bananas will sell for ________ per bunch.

A) $0.35
B) $0.65
C) $1.00
D) $1.35
E) $1.65

Question 79

The argument that calls for the trade protection of only newly developing industries is known as the ________ argument.

A) autarky
B) infant industry
C) developing nation
D) predatory dumping
E) learning by doing

Question 80

Use the following graph to answer the questions that follow.

In a trading (open)economy,how many TVs (in thousands)will this country import?

A) 30
B) 60
C) 90
D) 120
E) 150