1) a tariff can be thought of as a tax on imported goods.
a.true
b.false
2) boeing aircraft company was able to cover its production costs of the first “jumbo
jet” in the 1970s because boeing could market it to several foreign airlines in addition to
domestic airlines. this illustrates:
a.how economies of scale make possible a larger variety of products in international
trade
b.a transfer of wealth from domestic consumers to domestic producers as the result of
trade
c.how a natural monopoly is forced to behave more competitively with international
trade
d.how a natural monopoly is forced to behave less competitively with international
trade
3) expenditure-switching policies alter the level of total spending (aggregate demand)
for goods and services produced domestically and those imported.
a.true
b.false
4) according to the marshall-lerner condition, currency depreciation would have a
negative effect on a country’s trade balance if the elasticity of demand for its exports
plus the elasticity of demand for its imports equals:
a.0.5
b.1.0
c.1.5
d.2.0
5) under floating exchange rates, short-run exchange rates are primarily determined by
national differences in real interest rates and shifting expectations of future exchange
rates.
a.true
b.false
6) under the gold standard, the official exchange rate would be $2.80 per pound as long
as the united states bought and sold gold at a fixed price of $35 per ounce and britain
bought and sold gold at 12.5 pounds per ounce.
a.true
b.false
7) economic sanctions are most effective in pressuring the target country to modify its
behavior when the sanctions are imposed by a small number of countries and when the
target country had weak economic ties to the imposing countries before the sanctions
were initiated.
a.true
b.false
8) major beneficiaries of export-credit subsidies, granted by the export-import bank,
have included u.s. producers of aircraft, telecommunications, and power-generating
equipment.
a.true
b.false
9) the potential for trade diversion is smaller when a custom union’s external tariff is
lower rather than higher.
a.true
b.false
10) figure 6.4japanese market for jetliners
consider the japanese market for jetliners as depicted in figure 6.4.suppose lone
producer of jetliners in the world is boeing and boeing faces a constant marginal cost of
$20 million per jetliner.what price will boeing charge for jetliners in the japanese
market and how many will they sell?
a.$20 million, 23
b.$20 million, 46
c.$30 million, 46
d.$30 million, 23