Question 1

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Accepted Answer

foreign competitors that can produce quality textile goods at low cost.

Question 2

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Accepted Answer

Trade can make everyone better off.

Question 3

Which of the following tools and concepts is useful in the analysis of international trade?

Accepted Answer

total surplusdomestic supplyequilibrium priceAll of the above are correct.

Question 4

A logical starting point from which the study of international trade begins is

Accepted Answer

the principle of comparative advantage.

Question 5

Which of the following is not an important question for economic policy raised by the experience of the textile industry?

Accepted Answer

Which argument for restricting free trade is politically feasible?

Question 6

What is the fundamental basis for trade among nations?

Accepted Answer

comparative advantage

Question 7

Patterns of trade among nations are primarily determined by

Accepted Answer

comparative advantage.

Question 8

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Accepted Answer

Canada forbids international trade in soybeans.

Question 9

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Accepted Answer

if Wheatland were to allow trade, it would import corn.

Question 10

Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that

Accepted Answer

if Canada were to allow trade, it would export hockey sticks.

Question 11

The principle of comparative advantage asserts that

Accepted Answer

countries can become better off by specializing in what they do best.

Question 12

A tax on an imported good is called a

Accepted Answer

tariff.

Question 13

A tariff is a

Accepted Answer

tax on an imported good.

Question 14

The price of a good that prevails in a world market is called the

Accepted Answer

world price.

Question 15

The price of sugar that prevails in international markets is called the

Accepted Answer

world price of sugar.

Question 16

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Accepted Answer

the country will be an importer of the good.

Question 17

If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price,

Accepted Answer

the country will be an exporter of the good.

Question 18

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Accepted Answer

export copper, since that country has a comparative advantage in copper.

Question 19

For any country, if the world price of copper is lower than the domestic price of copper without trade, that country should

Accepted Answer

import copper.

Question 20

If the world price of apples is higher than Argentina's domestic price of apples without trade, then Argentina

Accepted Answer

has a comparative advantage in apples.

Question 21

Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles,

Accepted Answer

other countries have a comparative advantage over Vietnam and Vietnam will import textiles.

Question 22

Assume, for Vietnam, that the domestic price of textiles without international trade is lower than the world price of textiles. This suggests that, in the production of textiles,

Accepted Answer

Vietnam has a comparative advantage over other countries and Vietnam will export textiles.

Question 23

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Accepted Answer

Mexico has a comparative advantage over other countries and Mexico will export oranges.

Question 24

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Accepted Answer

Ireland has a comparative advantage relative to China in producing beer, and the United States has a comparative advantage relative to Ireland in producing pineapples.

Question 25

Trade among nations is ultimately based on

Accepted Answer

comparative advantage.

Question 26

A country has a comparative advantage in a product if the world price is

Accepted Answer

higher than that country's domestic price without trade.

Question 27

Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Accepted Answer

will import almonds.

Question 28

Suppose Brazil has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Accepted Answer

will export almonds.

Question 29

Suppose Jamaica has an absolute advantage over other countries in producing sugar, but other countries have a comparative advantage over Jamaica in producing sugar. If trade in sugar is allowed, Jamaica

Accepted Answer

will import sugar.

Question 30

Assume, for Japan, that the domestic price of automobiles without international trade is lower than the world price of automobiles. This suggests that, in the production of automobiles,

Accepted Answer

Japan has a comparative advantage over other countries and Japan will export automobiles.

Question 31

Assume, for Mexico, that the domestic price of beets without international trade is higher than the world price of beets. This suggests that, in the production of beets,

Accepted Answer

other countries have a comparative advantage over Mexico and Mexico will import beets.

Question 32

Assume, for England, that the domestic price of wine without international trade is higher than the world price of wine. This suggests that, in the production of wine,

Accepted Answer

other countries have a comparative advantage over England and England will import wine.

Question 33

Assume, for England, that the domestic price of wine without international trade is lower than the world price of wine. This suggests that, in the production of wine,

Accepted Answer

England has a comparative advantage over other countries and England will export wine.

Question 34

If the world price of coffee is lower than ColombiIf the world price of coffee is lower than Colombia's domestic price of coffee without trade, then Colombiaa's domestic price of coffee without trade, then Colombia

Accepted Answer

should import coffee.

Question 35

If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia

Accepted Answer

has a comparative advantage in coffee and should export coffee.

Question 36

If a country is an exporter of a good, then it must be the case that

Accepted Answer

the world price is greater than its domestic price.

Question 37

Suppose Japan exports cars to Russia and imports wine from France. This situation suggests

Accepted Answer

Japan has a comparative advantage relative to Russia in producing cars, and France has a comparative advantage relative to Japan in producing wine.

Question 38

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Accepted Answer

Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar.

Question 39

Assume the nation of Teeveeland does not trade with the rest of the world. By comparing the world price of televisions to the price of televisions in Teeveeland, we can determine whether

Accepted Answer

Teeveeland has a comparative advantage in producing televisions.

Question 40

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

Accepted Answer

will export pecans (assuming trade is allowed).will import pecans (assuming trade is allowed).has a comparative advantage in producing pecans.All of the above are correct.

Question 41

Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we

Accepted Answer

know whether Costa Rica imports or exports pharmaceuticals.compare the world price of pharmaceuticals to the price of pharmaceuticals that would prevail in Costa Rica if trade with the rest of the world were not allowed.compare the quantity of pharmaceuticals consumed in Costa Rica with the quantity of pharmaceuticals that would be consumed in Costa Rica if trade with the rest of the world were not allowed.All of the above are correct.

Question 42

Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that

Accepted Answer

the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed.

Question 43

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

Accepted Answer

Farmland has a comparative advantage, relative to other countries, in producing beef.

Question 44

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Accepted Answer

the world price of motorcycles exceeds the price of motorcycles in Isolani.

Question 45

Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

Accepted Answer

other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will import coffee.

Question 46

Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests

Accepted Answer

Russia has a comparative advantage over Ireland in producing sunflower seeds, and Brazil has a comparative advantage over Russia in producing coffee.

Question 47

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

Accepted Answer

producer surplus increases and total surplus decreases in the market for that good.

Question 48

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Accepted Answer

cannot affect world prices by trading with other countries.

Question 49

When, in our analysis of the gains and losses from international trade, we assume that a particular country is small, we are

Accepted Answer

making an assumption that is not necessary to analyze the gains and losses from international trade.

Question 50

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so

Accepted Answer

because then we can assume that world prices of goods are unaffected by that country's participation in international trade.

Question 51

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Accepted Answer

Moldova is a price taker.

Question 52

When a country allows trade and becomes an exporter of a good,

Accepted Answer

domestic producers gain and domestic consumers lose.

Question 53

Trade enhances the economic well-being of a nation in the sense that

Accepted Answer

trade results in an increase in total surplus.

Question 54

When a country allows trade and becomes an importer of a good,

Accepted Answer

domestic producers become worse off, and domestic consumers become better off.

Question 55

When a country allows trade and becomes an importer of a good,

Accepted Answer

the gains of the winners exceed the losses of the losers.

Question 56

When the nation of Worldova allows trade and becomes an exporter of silk,

Accepted Answer

residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova rises.

Question 57

When the nation of Duxembourg allows trade and becomes an importer of software,

Accepted Answer

residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises.

Question 58

When a nation first begins to trade with other countries and the nation becomes an importer of corn,

Accepted Answer

the nation's consumers of corn become better off and the nation's producers of corn become worse off.

Question 59

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Accepted Answer

this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade.this is an indication that the nation has a comparative advantage in producing soybeans.the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off.All of the above are correct.

Question 60

Trade raises the economic well-being of a nation in the sense that

Accepted Answer

the gains of the winners exceed the losses of the losers.

Question 61

When a country allows trade and becomes an exporter of a good,

Accepted Answer

the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good.

Question 62

When a country allows trade and becomes an importer of coal,

Accepted Answer

the gains of the domestic consumers of coal exceed the losses of the domestic producers of coal.

Question 63

When a country allows trade and becomes an exporter of a good, which of the following is not a consequence?

Accepted Answer

The losses of domestic consumers of the good exceed the gains of domestic producers of the good.

Question 64

When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?

Accepted Answer

The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water.

Macroeconomics Chapter #9

Unlock all answers in this set

Haven't found what you need?