Question 1

A tax on an imported good that raises its price is called a

Accepted Answer

A tax on an imported good that raises its price is called a tariff. A quota is a limit on the quantity of a good that can be imported, and comparative advantage/disadvantage refer to a country's ability to produce a good at a lower cost compared to another country.

Question 2

Statement I: Foreign competition has made many American industries more efficient.
Statement II: Multinational corporations have combined the competitive advantage of low wages in foreign countries with that of high capital.

Accepted Answer

Statement I is true as foreign competition forces American industries to improve their efficiency in order to remain competitive. Statement II is also true as multinational corporations take advantage of lower wages in foreign countries for their production while utilizing their high capital for marketing and distribution.

Question 3

-According to the information contained in the table,Brazil has an absolute advantage in

Accepted Answer

Brazil produces more of both hot dogs (20 bushels vs. 15 bushels) and coffee (10 bushels vs. 5 bushels) than Colombia, indicating an absolute advantage in both goods.

Question 4

A nation's comparative advantage in the production of an item is determined by

Accepted Answer

Comparative advantage is determined by the opportunity cost of producing a good relative to another country's opportunity cost of producing the same good. In other words, a country has a comparative advantage in producing a good if it has to give up less of another good to produce it than another country would.

Question 5

Colombia has an absolute advantage in

Accepted Answer

The answer of Colombia has an absolute advantage in
...

Question 6

Statement I: Our oil imports and our trade deficit with Japan and China together account for the majority of our overall trade deficit.
Statement II: Although the Chinese market is open to American producers,the Chinese people have very little income to purchase relatively expensive imported goods.

Accepted Answer

Both statements highlight significant aspects of the U.S. trade deficit and the dynamics of trade with China. Statement I points out the substantial impact of oil imports and trade with Japan and China on the U.S. trade deficit. Statement II addresses the issue of market access versus purchasing power in China, indicating that despite market openness, the purchasing power for expensive imports is limited.

Question 7

The United States is guilty of dumping on the international market because of the

Accepted Answer

Agricultural subsidies in the United States lead to overproduction of crops, which are then sold at a lower price on the international market, harming local farmers and economies in other countries. This practice is commonly referred to as "dumping."

Question 8

In general,when a nation has an absolute advantage over other nations in a particular product,it can produce that product:

Accepted Answer

The answer of In general,when a nation has an absolute...

Question 9

Our bill for our oil imports in 2009 was about $________ billion a year.

Accepted Answer

The answer of Our bill for our oil imports in...

Question 10

Statement I: Our trade deficit with Japan could be cut by about nine tenths if the Japanese halted their protectionist trade policies.
Statement II: If we could wipe our trade deficit with Japan and China,we would be running a trade surplus.

Accepted Answer

The answer of Statement I: Our trade deficit with Japan...

Question 11

Our merchandise trade deficit in 2009 was just about _______ billion dollars.

Accepted Answer

The answer of Our merchandise trade deficit in 2009 was...

Question 12

Statement I: Although our trade deficit is still a major concern,it has declined substantially since 1987.
Statement II: We are the only nation in the world that has a large trade deficit with China.

Accepted Answer

The answer of Statement I: Although our trade deficit is...

Question 13

Statement I: We pay higher taxes on gasoline than most Western European countries.
Statement II: Our dependence on foreign oil is increasing.

Accepted Answer

Statement I is false because most Western European countries have significantly higher gasoline taxes than the United States. Statement II is true as the U.S. has seen fluctuations in its dependence on foreign oil, but overall trends have shown increases over certain periods, especially considering historical contexts.

Question 14

The opportunity cost of producing one bushel of coffee in Brazil is

Accepted Answer

The opportunity cost of producing one bushel of coffee in Brazil is the amount of hot dogs that could have been produced with the resources used to produce that bushel of coffee. Since a Brazilian worker can produce 20 bushels of hot dogs or 10 bushels of coffee, the opportunity cost of 1 bushel of coffee is 20/10 = 2 bushels of hot dogs.

Question 15

We import about _______% of our oil.

Accepted Answer

The correct answer is C) 66%. This percentage reflects a significant portion of oil that is imported to meet the demand, indicating reliance on foreign oil sources.

Question 16

According to the theory of international trade,a nation should

Accepted Answer

The theory of international trade suggests that a nation should specialize in and export goods in which it has a comparative advantage. This means that the nation can produce these goods at a lower opportunity cost compared to other goods. By focusing on producing and exporting these goods, the nation can increase its economic welfare and benefit from trade. Importing goods in which it has a comparative disadvantage can complement the nation's exports and allow it to consume a greater variety of goods at a lower cost.

Question 17

Brazil should

Accepted Answer

Brazil is renowned for its coffee production, leveraging its climate and geography to produce coffee more efficiently than hot dogs. Specializing in coffee and importing hot dogs from Colombia, where they might have a comparative advantage in other products, follows the principle of comparative advantage in international trade.

Question 18

Assume that for Canada the opportunity cost of producing 1 television set is 2 bushels of wheat.Assume that for the U.S.the opportunity cost of producing 1 bushel of wheat is 2 television sets.All other things being equal:

Accepted Answer

Canada has a comparative advantage in producing wheat, as the opportunity cost of producing one television set is 2 bushels of wheat, which means that Canada can produce wheat at a lower opportunity cost than televisions. On the other hand, the U.S has a comparative advantage in producing televisions, as the opportunity cost of producing one bushel of wheat is 2 television sets, which means that the U.S can produce televisions at a lower opportunity cost than wheat.

Based on the principle of comparative advantage, it is beneficial for both countries to specialize in the production of the good that they have a comparative advantage in and trade with each other. Therefore, Canada should export wheat and import televisions, while the U.S should export televisions and import wheat.

Question 19

Statement I: The Japanese used a strategy of underselling American manufactured goods to capture the U.S.market.
Statement II: The Japanese closed their markets to American produced goods.

Accepted Answer

Both statements are true. The Japanese employed a strategy of underselling to penetrate the U.S. market, effectively outcompeting American manufacturers on price. Additionally, Japan has been criticized for maintaining trade barriers and practices that have made it difficult for American goods to enter the Japanese market, effectively protecting their domestic industries.

Question 20

Statement I: Although we have been losing manufacturing jobs to competition since the early 1960s,there are more manufacturing jobs in America today than there were in 1960.
Statement II: The basis for foreign trade is comparative advantage.

Accepted Answer

The answer of Statement I: Although we have been losing...

Quiz 31: International Trade

A tax on an imported good that raises its price is called a

Statement I: Foreign competition has made many American industries more efficient. Statement II: Multinational corporations have combined the competitive advantage of low wages in foreign countries with that of high capital.

-According to the information contained in the table,Brazil has an absolute advantage in

A nation's comparative advantage in the production of an item is determined by

Colombia has an absolute advantage in

Statement I: Our oil imports and our trade deficit with Japan and China together account for the majority of our overall trade deficit. Statement II: Although the Chinese market is open to American producers,the Chinese people have very little income to purchase relatively expensive imported goods.

The United States is guilty of dumping on the international market because of the

In general,when a nation has an absolute advantage over other nations in a particular product,it can produce that product:

Our bill for our oil imports in 2009 was about $________ billion a year.

Statement I: Our trade deficit with Japan could be cut by about nine tenths if the Japanese halted their protectionist trade policies. Statement II: If we could wipe our trade deficit with Japan and China,we would be running a trade surplus.

Our merchandise trade deficit in 2009 was just about _______ billion dollars.

Statement I: Although our trade deficit is still a major concern,it has declined substantially since 1987. Statement II: We are the only nation in the world that has a large trade deficit with China.

Statement I: We pay higher taxes on gasoline than most Western European countries. Statement II: Our dependence on foreign oil is increasing.

The opportunity cost of producing one bushel of coffee in Brazil is

We import about _______% of our oil.

According to the theory of international trade,a nation should

Brazil should

Assume that for Canada the opportunity cost of producing 1 television set is 2 bushels of wheat.Assume that for the U.S.the opportunity cost of producing 1 bushel of wheat is 2 television sets.All other things being equal:

Statement I: The Japanese used a strategy of underselling American manufactured goods to capture the U.S.market. Statement II: The Japanese closed their markets to American produced goods.

Statement I: Although we have been losing manufacturing jobs to competition since the early 1960s,there are more manufacturing jobs in America today than there were in 1960. Statement II: The basis for foreign trade is comparative advantage.