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chapter9_quiz_answers

The document contains a series of quiz questions related to international trade concepts, including comparative advantage, the effects of tariffs, and the implications of trade policies on domestic markets. Each question is followed by multiple-choice answers, with the correct answer indicated for each. The questions cover scenarios involving trade restrictions, price changes, and the impact of subsidies on trade efficiency.

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Hamdi Hamdi
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3 views

chapter9_quiz_answers

The document contains a series of quiz questions related to international trade concepts, including comparative advantage, the effects of tariffs, and the implications of trade policies on domestic markets. Each question is followed by multiple-choice answers, with the correct answer indicated for each. The questions cover scenarios involving trade restrictions, price changes, and the impact of subsidies on trade efficiency.

Uploaded by

Hamdi Hamdi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Quiz Questions with Correct Answers

1. The country of Autarka does not allow international trade. In Autarka, you can buy a wool suit for

3 ounces of gold, while in neighboring countries, the same suit costs 2 ounces of gold. This

suggests that

a. Autarka has a comparative advantage in producing suits and would become a suit exporter if it opened u

b. Autarka has a comparative advantage in producing suits and would become a suit importer if it opened u

c. Autarka does not have a comparative advantage in producing suits and would become a suit exporter if i

d. Autarka does not have a comparative advantage in producing suits and would become a suit importer if

2. The nation of Openia allows free trade and exports steel. If steel exports were prohibited, the

price of steel in Openia would be ________, benefiting steel ________.

a. higher; consumers

b. lower; consumers (Correct)

c. higher; producers

d. lower; producers

3. When the nation of Ectenia opens to world trade in coffee beans, the domestic price falls. Which

of the following describes the situation?

a. Domestic production of coffee rises, and Ectenia becomes a coffee importer.

b. Domestic production of coffee rises, and Ectenia becomes a coffee exporter.

c. Domestic production of coffee falls, and Ectenia becomes a coffee importer. (Correct)

d. Domestic production of coffee falls, and Ectenia becomes a coffee exporter.

4. When a nation opens to trade in a good and becomes an importer,

a. producer surplus decreases, but consumer surplus and total surplus both increase. (Correct)

b. producer surplus decreases, but consumer surplus increases, so the impact on total surplus is ambiguou

c. producer surplus and total surplus increase, but consumer surplus decreases.

d. producer surplus, consumer surplus, and total surplus all increase.


Quiz Questions with Correct Answers
5. If a nation that imports a good imposes a tariff, it will increase

a. the domestic quantity demanded.

b. the domestic quantity supplied. (Correct)

c. the quantity imported from abroad.

d. the efficiency of the equilibrium.

6. Which of the following policies would benefit producers, hurt consumers, and increase the amount

of trade?

a. the increase of a tariff in an importing country

b. the reduction of a tariff in an importing country

c. starting to allow trade when the world price is greater than the domestic price (Correct)

d. starting to allow trade when the world price is less than the domestic price

7. The nation of Lilliput imports rope from the nation of Brobdingnag, where rope producers are

subsidized by the government because of their great political clout. The most efficient policy from

the standpoint of _______ is to

a. continue trading at the subsidized price. (Correct)

b. place a tariff on rope imports to offset the subsidy.

c. provide a similar subsidy to the rope producers of Lilliput.

d. stop trading with Brobdingnag.

8. The goal of multilateral trade agreements is usually to

a. equalize the level of tariffs across nations so no nation is disadvantaged relative to others.

b. use targeted tariffs to ensure that nations produce those goods for which they have a comparative advan

c. reduce tariffs in various nations simultaneously to blunt political pressure for protectionism. (Correct)

d. ensure that tariffs are used only to promote infant industries that will eventually become viable.

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