Question 1

Relative to a no-trade situation, if the United States imported wine, the U.S. domestic price of wine would

Accepted Answer

If the United States imported wine, it would increase the supply of wine in the domestic market, leading to a downward pressure on the domestic price of wine. This would make domestic producers less competitive and lead to a decline in domestic output. Thus, the domestic price of wine would decline as well as domestic output.

Question 2

The primary source of purchasing power used to buy imported goods is the

Accepted Answer

The primary source of purchasing power used to buy imported goods is the revenue received from exports. When a country exports its goods to another country, it receives payment in the form of foreign currency. This foreign currency can then be used to purchase goods and services from other countries, including imports. Therefore, revenue received from exports is the main source of purchasing power for buying imported goods.

Question 3

Relative to a no-trade situation, if the United States exported wheat, the domestic price of wheat

Accepted Answer

The answer of Relative to a no-trade situation, if the...

Question 4

When a country allows trade and becomes an exporter of a good,

Accepted Answer

The answer of When a country allows trade and becomes...

Question 5

If the U.S. put an import quota on vacuum cleaners, it would

Accepted Answer

The answer of If the U.S. put an import quota...

Question 6

Which of the following is correct?

Accepted Answer

The answer of Which of the following is correct?
...

Question 7

As a result of a tariff on an imported good,

Accepted Answer

The answer of As a result of a tariff on...

Question 8

Which of the following restricts the volume of international trade?

Accepted Answer

Quotas are government-imposed restrictions on the quantity or value of goods that can be imported or exported. They limit the volume of international trade by placing a cap on the amount of goods that can be traded. Well-enforced property rights, a stable international monetary framework, and an increase in the rate of economic growth can all potentially promote international trade, rather than restrict it.

Question 9

A tariff can be defined simply as a

Accepted Answer

A tariff is a tax placed on imported goods. It is used to protect domestic industries from foreign competition by making foreign products more expensive and less competitive against domestic goods.

Question 10

If the United States imposes an import quota on clothing, U.S. imports

Accepted Answer

The answer of If the United States imposes an import...

Question 11

When a country allows trade and becomes an importer of steel,

Accepted Answer

When a country allows trade and becomes an importer of steel, the domestic consumers of steel will benefit from lower prices, while domestic producers will face more competition and lower prices. Therefore, the gains of the domestic consumers of steel exceed the losses of the domestic producers of steel.

Question 12

As a result of a tariff on imports,

Accepted Answer

Tariffs are taxes imposed on imports, making foreign goods more expensive and less competitive against domestically produced goods. This will lead to a decrease in imports, but the increase in prices can also decrease demand for both imports and domestic goods. With a decrease in exports due to retaliation from other countries and a decrease in total output due to decreased demand, option A is the best choice.

Question 13

What impact will a decrease in the supply of ball-point pens imported to the United States have on the domestic price of ball-point pens? Assume the pens are virtually identical regardless of country of origin.

Accepted Answer

A decrease in the supply of ball-point pens imported to the United States will lead to a decrease in the quantity of available pens, leading to an increase in its scarcity. Due to the scarcity, the demand for ball-point pens will remain constant or may even increase leading to an increase in the prices of ball-point pens.

Question 14

When the nation of Duxembourg allows trade and as a result becomes an importer of software,

Accepted Answer

When Duxembourg becomes an importer of software, residents who produce software may face more competition and potentially lower prices for their product. However, residents who buy software now have access to a wider variety of software choices and potentially lower prices as well. Overall, the increase in trade and access to new products can lead to an increase in the economic well-being of Duxembourg.

Question 15

Which of the following is most likely to increase U.S. exports?

Accepted Answer

The answer of Which of the following is most likely...

Question 16

When the nation of Econoland allows trade and as a result becomes an exporter of televisions,

Accepted Answer

The answer of When the nation of Econoland allows trade...

Question 17

If the U.S. imposed an import quota on beef, then in the U.S.

Accepted Answer

The answer of If the U.S. imposed an import quota...

Question 18

The primary source of purchasing power used to buy imported goods is

Accepted Answer

The primary source of purchasing power used to buy imported goods is the exports of a nation. This means that the money earned from exports is used to pay for the imports needed by the nation. If a nation has a high level of export revenues, it generally has greater purchasing power to buy more imported goods.

Question 19

The United States is the world's leading grain-producing nation. Exporting U.S. grain causes the

Accepted Answer

The answer of The United States is the world's leading...

Question 20

A tax levied on imported goods is called

Accepted Answer

A tax levied on imported goods is called a tariff.

Quiz 18: Gaining From International Trade