Ch 21 Quiz

The membership of the WTO includes about __________ nations. 1500 150 15 700

150

_____________ are numerical limitations on the quantity of products that can be imported. Tariffs Import quotas Nontariff barriers Taxes

Import quotas

It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument is commonly known as the _______________. Anti-Dumping Argument National Interest Argument Import Limitation Argument Buy-American Argument

National Interest Argument

An import quota or tariff on French wine that raises the prices for wine will probably: hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices. hurt domestic wineries, which will lose business as a result of the higher prices. hurt both domestic wine drinkers and domestic wine producers because of a reduction in competition. hurt both domestic wine drinkers and domestic wineries, but this will be more than offset by a reduction in driving fatalities.

hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

Low-wage U.S. workers suffer from protectionism in all the industries that they don't work in, because: protectionism will encourage foreign workers to apply for American jobs. protectionism will prevent them from applying for those jobs in other industries. protectionism provides a barrier to entry to the job markets that the low-wage earners want entry to. protectionism forces them to pay higher prices for basic necessities like clothing and food.

protectionism forces them to pay higher prices for basic necessities like clothing and food.

Tariffs result in a decrease in consumer surplus because: the price and the quantity consumed of the protected good decreases. the price of the protected good increases and quantity consumed decreases. the price of the protected good decreases and quantity consumed increases. the price and the quantity consumed of the protected good increases.

the price of the protected good increases and quantity consumed decreases.

Introducing a tariff on vitamin Z would: reduce exports of vitamin Z. decrease domestic production of vitamin Z. increase total American consumption of vitamin Z. increase American consumption of domestically produced vitamin Z.

increase American consumption of domestically produced vitamin Z.

Suppose the government of Taiwan subsidized its watch-making industry, enabling Taiwanese producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Taiwanese subsidization policy by: a. setting a declining quota on the import of Taiwanese watches such that the nation's domestic watch-making industry would continue to grow at the same rate as the rest of the economy. b. setting a tariff such that the prices of Taiwanese and domestic watches to the consumer are equal. c. setting a tariff high enough to just offset the subsidy granted to the Taiwanese watch-making industry. d. accepting the subsidy of the Taiwanese government, making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.

accepting the subsidy of the Taiwanese government, making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy reducing or eliminating imports of rice into the country would include: the real incomes of Japanese rice consumers would rise, but the real incomes of Japanese rice producers would fall. the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall. Japan will be able to consume a combination of rice and other goods beyond their domestic production possibilities curve. the price of rice in Japan will fall.

the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall.

International trade is fundamentally a ________________________. lose-lose situation win-win situation win-lose situation war which is won by the strongest

win-win situation