40-121
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written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Diffi c ul t y :
01 Easy
Learning Objective: 40-02 Define comparative advantage, and demonstrate how specialization
and trade add to a nations output.
Test Bank: II
Topic:
The Economic Basis for Trade
226. Which of the following statements is true?
227.
Country X
Price
Qdd
Qsd
$5.00
200
400
4.00
250
350
3.00
300
300
2.00
350
250
1.00
400
200
The accompanying table gives data for Country X. Column 1 of the table is the price of a
product. Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the
quantity supplied domestically (Qsd). If Country X opens itself up to international trade,
at what world price will it begin importing some units of the product?
228.
Country X
Price
Qdd
Qsd
$5.00
200
400
4.00
250
350
3.00
300
300
2.00
350
250
1.00
400
200
The accompanying table gives data for Country X. Column 1 of the table is the price of a
product. Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the
quantity supplied domestically (Qsd). If Country X opens itself up to international trade,
at what world price will it begin exporting some units of the product?
40-123
229.
Country X
Price
Qdd
Qsd
$5.00
200
400
4.00
250
350
3.00
300
300
2.00
350
250
1.00
400
200
The accompanying table gives data for Country X. Column 1 of the table is the price of a
product. Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the
quantity supplied domestically (Qsd). If Country X opens itself up to international trade
and the world-market price of the product is $3, then Country X will
230.
Country X
Price
Qdd
Qsd
$5.00
200
400
4.00
250
350
3.00
300
300
2.00
350
250
1.00
400
200
The accompanying table gives data for Country X. Column 1 of the table is the price of a
product. Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the
quantity supplied domestically (Qsd). At what price will Country X import 100 units of
the product?
231.
Country X
Price
Qdd
Qsd
$5.00
200
400
4.00
250
350
3.00
300
300
2.00
350
250
1.00
400
200
The accompanying table gives data for Country X. Column 1 of the table is the price of a
product. Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the
quantity supplied domestically (Qsd). If the world price is $5.00, there will be
40-125
232.
Country Y
Price
Qdd
Qsd
$9.00
250
450
8.00
300
400
7.00
350
350
6.00
400
300
The accompanying table gives data for Country Y. Column 1 is the price of a product.
Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the quantity
supplied domestically (Qsd). If the world price of the product is $6, then Country Y will
233.
Country Y
Price
Qdd
Qsd
$9.00
250
450
8.00
300
400
7.00
350
350
6.00
400
300
The accompanying table gives data for Country Y. Column 1 is the price of a product.
Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the quantity
supplied domestically (Qsd). At what price will Country Y export 100 units of the
product?
40-126
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written consent of McGraw-Hill Education.
B.
$8.00
C. $7.00
D. $6.00
234.
Refer to the graph, which shows the domestic demand and supply curves for a specific
product in a hypothetical nation called Econland. If the world price for this product is
$2.00, then Econland will
235.
Refer to the graph, which shows the domestic demand and supply curves for a specific
product in a hypothetical nation called Econland. When the world price for this product is
$0.50, Econland will
236.
Refer to the graph, which shows the domestic demand and supply curves for a specific
product in a hypothetical nation called Econland. At what price will Econland be neither
importing nor exporting the product?
237. If the world price of a product rises relative to the domestic price in a trading nation,
then, for that product,
40-129
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficulty: 02 Medium
Learning Objective: 40-03 Describe how differences between world prices and domestic prices
prompt exports and imports.
Test Bank: II
Topic:
Supply and Demand Analysis of Exports and Imports
238. If a nation exports a product, then the price of that product in the nation
239. When a nation starts opening up to international trade, it will see falling prices for
240. The table shows a schedule of the import demand in Country A and the export supply
in Country B at various dollar prices. Column 1 is the price of the product. Column 2 is the
quantity demanded for imports (QdiA) in Country A. Column 3 is the quantity of exports
supplied (QseB) by Country B.
Price
QdiA
QseB
$4.00
0
200
3.00
100
100
2.00
200
0
1.00
300
0
The equilibrium world price in this two-nation model will be
241.
Refer to the graph, which shows the import demand and export supply curves for two
nations that produce a certain product. The import demand curves for the two nations are
represented by lines
40-131
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written consent of McGraw-Hill Education.
D.
7 and 8.
242.
Refer to the graph, which shows the import demand and export supply curves for two
nations that produce a certain product. Lines 6 and 8 apply to one nation and represent,
respectively,
243.
Refer to the graph, which shows the import demand and export supply curves for two
nations that produce a certain product. In this two-nation model, the equilibrium world
price and quantity will be
244. A maximum limit set on the amount of a specific good that may be imported into a
country over a given period of time is called a
40-133
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Analyze
Di ff ic ult y:
03 Hard
Learning Objective: 40-04 Analyze the economic effects of tariffs and quotas.
Test Bank: II
Topic:
Trade Barriers and Export Subsidies
245. A “Buy American” policy strictly enforced is equivalent to a(n)
246. A tariff is a
247. An excise tax on imported items is known as a(n)
40-134
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Analytical Thinking
A c c e s si bi l i t y :
Keyboard Navigation
Blooms: Analyze
Di ff ic u l t y : 03 Hard
Learning Objective: 40-04 Analyze the economic effects of tariffs and quotas.
Test Bank: II
Topic: Trade Barriers and Export Subsidies
248. Which of the following statements is true about the alleged benefits and adverse
effects of trade barriers?
249. An excise tax that is applied to an imported product that is not at all produced
domestically is called a(n)
250. An import-licensing requirement or import restrictions pertaining to the product
quality and safety are examples of
251. Which of the following statements best describes a protective tariff?
252. An example of a nontariff barrier would be
40-136
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Analytical Thinking
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Analyze
Di ff ic u l t y : 03 Hard
Learning Objective: 40-04 Analyze the economic effects of tariffs and quotas.
Test Bank: II
Topic: Trade Barriers and Export Subsidies
253. If a nation agrees to set an upper limit on the total amount of a product that it exports
to another nation, then this situation would be an example of
254. A key difference between import quotas and voluntary export restraints (VERs) is that
the
255. If the United States government were to impose a quota on wristwatches imported
from Switzerland, then the
256. The imposition of a tariff on a product is least likely to result in a(n)
257. If a nation imposes a tariff on an imported product, then the nation will experience
a(n)
40-138
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written consent of McGraw-Hill Education.
Di ff ic ult y:
03 Hard
Learning Objective: 40-04 Analyze the economic effects of tariffs and quotas.
Test Bank: II
Topic:
Trade Barriers and Export Subsidies
258. Tariffs and quotas are costly to consumers because
259. Assume that a tariff is imposed on an imported product. The difference between the
domestic price and the world price is captured by
260. Assume that a VER (voluntary export restraint) is imposed on an imported product.
The difference between the domestic price and the world price is captured by
40-139
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Analytical Thinking
A c c e s si bi l i t y :
Keyboard Navigation
Blooms: Analyze
Di ff ic u l t y : 03 Hard
Learning Objective: 40-04 Analyze the economic effects of tariffs and quotas.
Test Bank: II
Topic: Trade Barriers and Export Subsidies
261. Import quotas on products will reduce the quantity of the imported products and
262. Tariffs and import quotas would benefit the following groups, except
263. When a tariff or quota on a product is removed, this policy action
264. When tariffs on imported products are removed by a nation, it will result in
265. An export subsidy for a product will benefit
266. The higher price of imported products due to trade barriers causes some consumers to
shift their purchases to a domestically produced product that is now