AP Econ Fall FInal Review Unit 8

D

A nation will import a specific product when its: A) domestic price equals the world price. B) export supply curve lies above its import demand curve. C) export supply curve is upsloping. D) domestic price is greater than the world price

A

A nation will neither export nor import a specific product when its: A) domestic price (no-international-trade price) equals the world price. B) export supply curve lies above its import demand curve. C) export supply curve is upsloping. D) import demand curve is down sloping.

C

A change in the dollar price of yen from $1 = 100 yen to $1 = 50 yen will: A) make U.S. goods more expensive to the Japanese. B) make Japanese goods less expensive to Americans C) increase U.S. exports and depress Japanese exports. D) increase Japanese exports and depress U.S.exports.

A

A nation will export a specific product when its: A) its domestic price is lower than the world price. B) export supply curve lies above its import demand curve. C) export supply curve is upsloping. D) import demand curve is down sloping

A

A tariff can best be described as: A) an excise tax on an imported good to protect domestic firms. B) a government payment to domestic producers to enable them to sell competitively in world markets. C) an excise tax on an exported good D) a law that sets a limit on the amount of a good that can be imported.

C

According to the concept of comparative advantage, a good should be produced in that nation where: A) its domestic opportunity cost is greatest. B) money is used as a medium of exchange. C) its domestic opportunity cost is least. D) the terms of trade are maximized.

C

All else equal, depreciation of the Mexican peso relative to the U.S. dollar would make a trip by: A) an American to Mexico more expensive. B) a Mexican to the United States less expensive. C) an American to Mexico less expensive. D) an Australian to the United States more expensive.

B

Appreciation of the Mexican peso will: A) make Mexico's exports and imports both more expensive. B) make Mexico's exports more expensive and its imports less expensive. C) make Mexico's exports less expensive and its imports more expensive. D) increase Mexican exports.

B

As it relates to international trade, dumping: A) is a form of price discrimination illegal under U.S. antitrust laws. B) is the practice of selling goods in a foreign market at less than cost. C) constitutes a general case for permanent tariffs. D) is defined as selling more goods than allowed by an import quota.

D

By 2005, the World Trade Organization seeks to: A) reduce tariffs worldwide and promote trade B) reduce agricultural subsidies C) protect intellectual property D) all of the above

A

Depreciation of the dollar will: A) increase the prices of U.S. imports, but decrease the prices of U.S. exports. B) decrease the prices of U.S. imports, but increase the prices of U.S. exports. C) increase the prices of both U.S. imports and exports. D) decrease the prices of both U.S. imports and exports.

B

Dumping of goods abroad: A) constitutes a general case for permanent tariffs. B) may be part of a firm's price discrimination strategy. C) may be part of a nation's strategy to rectify its trade deficit. D) drives up prices of the dumped goods.

D

Free trade based on comparative advantage is economically beneficial because: A) it promotes an efficient allocation of world resources. B) it increases competition. C) it provides consumers with a wider range of products. D) of all of the above reasons.

B

If incomes rise rapidly in the United States and U.S. preferences for foreign goods strengthen, we would expect: A) the dollar to appreciate in value. B) the dollar to depreciate in value. C) the dollar price of foreign monies to decrease. D) U.S. exports to increase.

D

If the Japanese yen appreciates relative to the Swedish krona, then the krona: A) will be more expensive to the Japanese. B) may either appreciate or depreciate relative to the yen. C) will appreciate relative to the yen. D) will depreciate relative to the yen.

D

If the dollar appreciates relative to foreign currencies, we would expect: A) the multiplier to decrease. B) a country's exports and imports to both fall. C) a country's net exports to rise. D) a country's net exports to fall.

A

If the dollar price of foreign currencies falls (that is, the dollar appreciates), we would expect: A) aggregate demand to decrease and aggregate supply to increase. B) both aggregate demand and aggregate supply to decrease. C) both aggregate demand and aggregate supply to increase. D) aggregate demand to increase and aggregate supply to decrease.

D

If the equilibrium exchange rate changes so that it takes more dollars to buy a British pound, then: A) the dollar has appreciated in value. B) Americans will import more British goods. C) the British will buy fewer U.S. goods. D) the dollar has depreciated in value.

A

If the exchange rate changes from $1 = 2 euros to $1 = 3 euros: A) the dollar has appreciated in value. B) the dollar has depreciated in value. C) the dollar has neither appreciated nor depreciated, but the euro has appreciated in value. D) U.S.exportstoEuropewillincrease.

B

If yesterday $1 would buy 800 South Korean won, but today $1 will only buy 790 won; the: A) dollar has appreciated in value. B) dollar has depreciated in value. C) demand for dollars in the foreign exchange market has increased relative to the supply of won. D) won price of dollars has gone up.

A

Import quotas are: A) maximum limits on the quantity or total value of specific products imported to a nation. B) excise taxes or duties placed on imported products. C) licensing requirements, unreasonable quality standards, and the like designed to impede imports. D) government payments to domestic producers to reduce the world prices of exported goods.

A

Mexican imports of U.S. goods: A) create a supply of pesos. B) create a supply of dollars. C) reduce the demand for dollars. D) have no effect on the peso-dollar exchange rate.

C

Nontariff barriers are: A) maximum limits on the quantity or total value of specific products imported to a nation. B) excise taxes or duties placed on imported products. C) licensing requirements, unreasonable quality standards, and the like designed to impede imports. D) government payments to domestic producers to reduce the world prices of exported goods.

A

On the basis of the production possibilities data shown: A) Landia has a comparative advantage in chips while Scandia has a comparative advantage in fish. B) Landia has a comparative advantage in fish while Scandia has a comparative advantage in chips. C) both Landia and Scandia have a comparative advantage in fish. D) both Landia and Scandia have a comparative advantage in chips.

A

Other things equal, Canadian imports of U.S. goods: A) create a supply of Canadian dollars in the foreign exchange market. B) create a supply of U.S. dollars in the foreign exchange market. C) reduce the demand for U.S. dollars. D) have no effect on the U.S. dollar price of Canadian dollars.

D

Proponents of the WTO argue that free international trade and investment will: A) reduce economic growth rates in the industrial economies. B) reduce employment in developing nations. C) eliminate world poverty. D) increase living standards of all trading nations.

C

Refer to the above data. After specialization, Alpha will produce: A) 60 tons of steel and Omega will produce 45 tons of wheat. B) 20 tons of steel and Omega will produce 60 tons of wheat. C) 60 tons of steel and Omega will produce 60 tons of wheat. D) 30 tons of steel and Omega will produce 30 tons of wheat.

C

Refer to the above data. Alpha has a comparative advantage in producing: A) neither steel nor wheat. B) both steel and wheat. C) steel. D) wheat.

C

Refer to the above data. Assume that before specialization and trade Landia was producing combination C and Scandia was producing combination B. If these two nations now specialize completely based on with comparative advantage, the total gains from specialization and trade would be: A) 8 fish and 2 chips. B) 10 fish and 4 chips. C) 0 fish and 8 chips. D) 4 fish and 6 chips.

A

Refer to the above data. At a world price of $2: A) Alpha will want to import 20 units of steel. B) Beta will want to export 20 units of steel. C) Alpha will want to export 20 units of steel. D) neither country will want to import steel.

C

Refer to the above data. At a world price of $5: A) Alpha will want to import 50 units of steel. B) Beta will want to import 60 units of steel. C) Alpha will want to export 50 units of steel. D) neither country will want to export steel.

A

Refer to the above data. If Alpha and Omega each were producing at alternatives B before trade, the gain from specialization and trade would be: A) 30 tons of wheat. B) 15 tons of steel. C) 30 tons of steel and 30 tons of wheat. D) 60 tons of wheat and 60 tons of steel.

C

Refer to the above data. If Alpha was producing at alternative B and Omega was at alternative C before trade, the gain from specialization and trade would be: A) 30 tons of wheat. B) 5 tons of steel. C) 5 tons of steel and 15 tons of wheat. D) 15 tons of steel and 5 tons of wheat.

B

Refer to the above data. If Landia and Scandia fully specialize based on comparative advantage, their aggregate output will be: A) 48 chips and 8 fish. B) 40 chips and 16 fish. C) 36 chips and 10 fish. D) 42 chips and 12 fish.

D

Refer to the above data. If this nation were entirely closed to international trade, equilibrium price and quantity would be: A) $5 and 2 units. B) $1 and 1 unit. C) $4 and 4 units. D) $3 and 7 units.

C

Refer to the above data. On the basis of the above information: A) Alpha should export both steel and wheat to Omega. B) Omega should export both steel and wheat to Alpha. C) Omega should export steel to Alpha and Alpha should export wheat to Omega. D) Alpha should export steel to Omega and Omega should export wheat to Alpha.

D

Refer to the above data. The domestic opportunity cost of 1 fish in Landia is: A) 10 chips. B) 2 chips. C) 4 chips. D) 5 chips.

C

Refer to the above data. The domestic opportunity cost of 1 fish in Scandia is: A) 12 chips. B) 4 chips. C) 3 chips. D) 1 chip.

B

Refer to the above data. The domestic opportunity cost of producing 1 ton of steel in Alpha is: A) .5 ton of wheat. B) 1 ton of wheat. C) 15 tons of wheat. D) 30 tons of wheat.

C

Refer to the above data. The domestic opportunity cost of producing 1 ton of steel in Omega is: A) .5 ton of wheat. B) 2 tons of wheat. C) 3 tons of wheat. D) 5 tons of wheat.

C

Refer to the above data. The equilibrium prices of steel in Alpha and Beta are: A) $5 and $4, respectively. B) $2 and $4, respectively. C) $3 and $2, respectively. D) $1 and $2, respectively.

A

Refer to the above data. Which of the following would be feasible terms of trade between Landia and Scandia? A) 1 fish for 4 chips B) 1 fish for 6 chips C) 1 fish for 7 chips D) 2 fish for 4 chips

A

Refer to the above graph illustrating import demand and export supply between America and Canada. Curve A represents: A) American export supply B) Canadian export supply C) American import demand D) Canadian import demand

B

Refer to the above graph illustrating import demand and export supply between America and Canada. Curve B represents: A) American export supply B) Canadian export supply C) American import demand D) Canadian import demand

C

Refer to the above graph illustrating import demand and export supply between America and Canada. Curve C represents: A) American export supply B) Canadian export supply C) American import demand D) Canadian import demand

D

Refer to the above graph illustrating import demand and export supply between America and Canada. Curve D represents: A) American export supply B) Canadian export supply C) American import demand D) Canadian import demand

A

Refer to the above graph illustrating import demand and export supply between America and Canada. Point F shows: A) American domestic price equals world price B) Canadian domestic price equals world price C) Equilibrium world quantity D) Equilibrium world price

B

Refer to the above graph illustrating import demand and export supply between America and Canada. Point G shows: A) American domestic price equals world price B) Canadian domestic price equals world price C) Equilibrium world quantity D) Equilibrium world price

C

Refer to the above graph illustrating import demand and export supply between America and Canada. Point H shows: A) American domestic price equals world price B) Canadian domestic price equals world price C) Equilibrium world quantity D) Equilibrium world price

D

Refer to the above graph illustrating import demand and export supply between America and Canada. Point I shows: A) American domestic price equals world price B) Canadian domestic price equals world price C) Equilibrium world quantity D) Equilibrium world price

C

Suppose the domestic price (no-international-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will: A) have a domestic surplus of copper. B) export copper. C) import copper. D) neither export nor import copper.

B

Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will: A) have a domestic shortage of wheat. B) export wheat. C) import wheat. D) neither export nor import wheat.

C

The World Trade Organization (WTO) A) sets tariffs to balance international trade among nations. B) is the successor to NAFTA. C) hears and rules on trade disputes between nations. D) sets exchange rates to balance international trade among nations.

A

The terms of trade: A) show the ratio at which nations will exchange two goods. B) show how the gains from trade can be equally shared. C) show the value of one nation's currency in terms of another nation's currency. D) compare the volume of a nation's exports and imports.