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98. Dumping is said to occur when
A. Foreign producers sell their goods abroad at prices lower than their marginal cost of production.
99. Protectionism achieves which of the following goals?
100. The infant industry argument can be justified because
101. Which of the following policies would not improve the terms of trade from the point of view of import-competing
102. From a consumer's viewpoint, which of the following policies would be least desirable?
103. An embargo is
A. A prohibition on exports or imports.
104. A tax imposed on imported goods is
105. When a country imposes tariffs, it is likely to cause
106. Tariffs tend to reduce the volume of imports by
107. When tariffs are imposed, the losers include
A. Domestic consumers and the domestic government.
108. If the United States raises tariffs on foreign goods, it may achieve
109. What should happen to the equilibrium price and quantity in a market as a result of a tariff on
110. A beggar-thy-neighbor policy is
111. A quota is
112. Quotas are a greater threat to competition than tariffs because
113. What should happen to the equilibrium price and quantity in a market as a result of a quota on imports?
115. An agreement to reduce the volume of trade in a specific good is
A. A voluntary restraint agreement.
116. The General Agreement on Tariffs and Trade
117. A principal objective of the World Trade Organization is to
118. The purpose of the World Trade Organization (WTO) is to
119. If exports are being excluded unfairly from a market, the World Trade Organization (WTO) may authorize
120. The primary purpose of NAFTA is to
A. Encourage the development of the Mexican and Canadian economies at the expense of U.S. workers
121. Overall NAFTA has resulted in
122. After joining the European Union, which of the following has not occurred for member nations?
123.
Refer to Figure 35.5. If S1 represents the U.S. domestic supply of a good and S2 represents supply in
the United States under conditions of free trade, what does S3 most likely represent?
124.
Refer to Figure 35.5. S1 represents the U.S. domestic supply of a good and S2 represents supply in the
United States under conditions of free trade. If the United States imposes a tariff on this good, what will
happen to the quantity imported?
125.
Refer to Figure 35.6:
If S1 represents the U.S. domestic supply of a good, what does S2 most likely represent?
126. The World View article "U.S. to Impose Tariffs on Tires from China" says new tariffs will be imposed on tires
from China, and
127. In the World View article on new tariffs on imported tires from China, the tariff is designed to
A. Protect U.S.-based import-competing industries.
as an import- competing industry. This means that cheap imported tires hurt this particular industry.
128. A World View titled "Export Ratios" examines the openness of trade for several countries based on the trade
to GDP ratio. According to the excerpt, which country exports the most as a percentage of GDP?
A. United Arab Emirates.
129. A World View titled "Export Ratios" examines the openness of trade for several countries based on the trade
to GDP ratio. Of the countries listed below, which exports the least (as measured as a percentage of GDP)?
130. An In the News article titled "California Grape Growers Protest Mixing Foreign Wine" discusses foreign
wine sold in the U.S. market. California grape growers'main complaint was that
131. A World View excerpt titled "China Accuses Corning of ‘Dumping'" examines the role that antidumping charges
play in trade disputes. According to the excerpt, customers in China that buy Corning products will be forced to
132. A World View excerpt titled "Meat Imports ‘Threaten'Farmers" examines complaints made by Czech farmers.
The Czech pig farmers were complaining about
133. Gary Galles in the article "End the Import Quotas on Sugar" argues
134. If U.S. quotas on imported sugar were eliminated,
A. The supply of sugar in the United States would shift to the left and prices would rise.
135. The ratio of exports to GDP in the United States is small relative to that of other countries.
136. A trade deficit means that exports exceed imports over some relevant time period.
137. Specialization increases total world output.
138. If every country specializes in what it produces best and then trades, more will be produced than if each country
tries to produce everything for its own needs.
139. Free trade benefits the nation as a whole but may hurt specific industries and workers.
140. A country can consume outside its production possibilities curve by trading.
141. International trade allows a country's consumption possibilities to exceed its production possibilities.
142. Comparative advantage refers to the ability to produce output with fewer resources than any other country.
143. World output will be maximized when each country pursues its comparative advantage.
144. The terms of trade between any two countries for two goods cannot be between their respective opportunity
costs if there are to be any gains in trade.
145. Reducing protectionism allows greater gains from free trade.
146. Trade restrictions designed to benefit the import-competing industries will benefit the entire country.
147. Preservation of national security is one argument in favor of trade restrictions.
148. An embargo is a prohibition against trading particular goods.
149. Quotas are a much greater threat to competition than are tariffs because quotas preclude additional imports at
any price.
TRUE
150. As a result of GATT, tariff rates in developed countries have decreased from 40 percent in 1948 to less than
4 percent today.
151. Explain how it is possible for a country to consume a greater quantity of goods and services than it is
actually capable of producing.
152. Describe the pressures that discourage trade.
153. Why would the establishment of protective trade barriers be a poor way of protecting workers in
domestic industries?
Topic: BARRIERS TO TRADE
154. Discuss the differences between a tariff and a quota. Explain why quotas are considered to be a greater threat
to competition than tariffs.
155. What is the "beggar-thy-neighbor" policy, and why is it a problem for the country that caused it?
156. What is a multilateral trade pact? Discuss the first one that was formed and what its impact has been.
