Chapter 20 – International Trade
49. Refer to the above data. Which of the following statements about the two nations is
correct based on the principle of comparative advantage?
50. Refer to the above data. The mutually-beneficial terms of trade will be:
51. Refer to the above data. Assume that Wat originally produced rice and corn at
combination C and that Xat originally produced combination B. If the nations are now fully
specialized based on comparative advantage, the total gains from specialization and trade are:
Chapter 20 – International Trade
Autos and chemicals are in million units in the following tables:
52. The data in the above tables suggest that production in:
Chapter 20 – International Trade
53. Refer to the above tables. If Germany and the United States engage in trade, the mutually-
beneficial terms of trade will be between:
54. Refer to the above tables. Assume that prior to specialization and trade Germany and the
United States both choose production possibility C. Now if each specializes according to its
comparative advantage, the resulting gains from specialization and trade will be:
55. Refer to the above tables. Suppose that each nation specialized in producing the product
for which it has a comparative advantage, and the terms of trade were set at 3 units of
chemicals for 1 unit of autos. In this case, Germany could obtain and consume a maximum
combination of 8 million units of autos and:
Chapter 20 – International Trade
56. In a world with two products, wheat (W) and coffee (C), nation Alpha produces wheat and
nation Beta produces coffee. Nation Alpha prefers an exchange rate of 1W = 2C and nation
Beta prefers an exchange rate of 1W = 1C. The exchange rate preferred by nation:
57. Which of the following statements is true?
Chapter 20 – International Trade
Use the table below for Country X to answer the question below. 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).
58. Refer to the above table. If Country X is open to international trade, at what price will it
begin importing some units of the product?
59. Refer to the above table. If Country X is open to international trade, at what price will it
begin exporting some units of the product?
Chapter 20 – International Trade
60. Refer to the above table. If Country X is open to international trade and the world-market
price of the product is $3, then Country X will:
61. Refer to the above table. At what price will Country X import 100 units of the product?
62. Refer to the above table. If the price is $5.00, there will be:
Chapter 20 – International Trade
Use the following table to answer the question below 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).
63. Refer to the above table. If the world price of the product is $6, then Country Y will:
64. Refer to the above table. Assuming that Country Y is open to trade, at what price will it be
neither exporting nor importing the product?
Chapter 20 – International Trade
65. Refer to the above table. At what price will Country Y export 100 units of the product?
66. Refer to the above graph showing the domestic demand and supply curves for a specific
product in a hypothetical nation called Zancuzi. If the world price for this product is $2.00,
then Zancuzi will:
Chapter 20 – International Trade
67. Refer to the above graph showing the domestic demand and supply curves for a specific
product in a hypothetical nation called Zancuzi. When the world price for this product is
$0.50, Zancuzi will:
68. Refer to the above graph showing the domestic demand and supply curves for a specific
product in a hypothetical nation called Zancuzi. At what price will there be neither imports
nor exports?
69. If the world price of a product rises relative to the domestic price in a trading nation, then
for that product:
Chapter 20 – International Trade
20–30
70. If a nation exports a product, then the price of that product in the nation:
71. If a nation opens up to international trade, it will see falling prices for:
Use the following table below to answer the question below. 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) in Country B
Chapter 20 – International Trade
72. Refer to the above table. The equilibrium world price in this two-nation model will be:
73. Refer to the above graph which shows the import demand and export supply curves for
two nations that produce a product. The import demand curves for the two nations are
represented by lines:
Chapter 20 – International Trade
74. Refer to the above graph which shows the import demand and export supply curves for
two nations that produce a product. Lines 6 and 8 apply to the same nation and represent,
respectively:
75. Refer to the above graph which shows the import demand and export supply curves for
two nations that produce a product. In this two-nation model, the equilibrium world price and
quantity will be:
76. A maximum limit set on the amounts of commodities that may be imported into a country
in any period of time is a:
Chapter 20 – International Trade
77. The “Buy American” campaign is equivalent to a(n):
78. A tariff is a:
79. An excise tax on imported commodities is known as a(n):
Chapter 20 – International Trade
80. An excise tax that is applied to imported products which are not produced domestically is
a(n):
81. A licensing requirement, or unreasonable standard pertaining to the product quality and
safety for a product that is imported into a country, are examples of:
82. Which would best describe a protective tariff?
Chapter 20 – International Trade
83. An example of a nontariff barrier would be:
84. 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:
85. A key difference between import quotas and voluntary export restraints (VERs) is that
the:
Chapter 20 – International Trade
86. If the United States government were to impose a quota on wristwatches imported from
Switzerland, the:
87. The imposition of a tariff on a product is least likely to result in a(n):
88. If a nation imposes a tariff on an imported product, then the nation will experience a(n):
Chapter 20 – International Trade
89. Tariffs and quotas are costly to consumers because:
90. Assume that a tariff is imposed on an imported product. The difference between the
domestic price and the world price is captured by:
91. 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:
Chapter 20 – International Trade
92. Import quotas on products will reduce the quantity of the imported products and:
93. Tariffs and import quotas would benefit the following groups, except:
94. The major beneficiaries of a tariff on a product are the:
Chapter 20 – International Trade
95. When a tariff or quota on a product is removed, the action:
96. When tariffs on imported products are removed by a nation, it will result in:
97. An export subsidy for a product will benefit: