1) although an import tariff provides the domestic government additional tax revenue, it
benefits domestic consumers at the expense of domestic producers.
a.true
b.false
2) the diagram below illustrates the international tin market. assume that the producing
and consuming countries establish an international commodity agreement under which
the target price of tin is $5 per pound.
figure 7.2. defending the target price in face of changing supply conditions
consider figure 7.2. suppose the supply of tin increases from s0 to s1. under a buffer
stock system, the buffer-stock manager could maintain the target price by:
a.purchasing 15 pounds of tin
b.purchasing 30 pounds of tin
c.selling 15 pounds of tin
d.selling 30 pounds of tin
3) prior to the formation of the organization of petroleum exporting countries,
individual oil producing nations,
a.operated like sellers in a competitive market
b.behaved like individual sellers in a monopoly market
c.had considerable control over the price of oil
d.both b and c.
4) studies have shown that there is an inverse relationship between
a.local competition and regional competition
b.regional competition and global competition
c.level of trade barriers and economic growth
d.level of education and communications infrastructure
5) assuming identical cost and demand curves, opec as a cartel will, in comparison to a
competitive industry:
a.produce greater output and charge a lower price
b.produce greater output and charge a higher price
c.produce less output and charge a higher price
d.produce less output and charge a lower price
6) under a floating exchange-rate system, if american exports increase and american
imports fall, the value of the dollar will:
a.appreciate
b.depreciate
c.be officially revalued
d.be officially devalued
7) economic policymakers have typically adopted expenditure-increasing policies to
combat inflation and expenditure-reducing policies to combat recession.
a.true
b.false
8) suppose that mexico and canada form a free-trade area. the mexicans then decrease
refrigerator manufacturing and increase imports of refrigerators from canada, while the
canadians decrease auto manufacturing and import more autos from mexico. this is an
example of trade creation.
a.true
b.false
9) if the united kingdom and italy eliminate all tariffs on each other’s goods and all
restrictions to factor movements between them, and implement a uniform system of
import restrictions against the rest of the world, these countries have formed a common
market.
a.true
b.false
10) an elimination of nontariff barriers on apples tends to increase apple imports, reduce
profits of import-competing apple producers, and generate job losses for domestic apple
workers.
a.true
b.false
11) the marshall-lerner condition deals with the impact of currency depreciation on:
a.domestic income
b.domestic absorption
c.purchasing power of money balances
d.relative prices
12) the price-adjustment mechanism’s relevance to the real world has been questioned
on the grounds that national output is generally not at the full-employment level and
that the velocity of money is not always constant.
a.true
b.false
13) 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.how much consumer surplus will the japanese airlines who
purchase the jetliners earn from their transactions with boeing?
a.0
b.$115 million
c.$230 million
d.$250 million