Econ Chapter 9 Quiz
What is the fundamental basis for trade among nations?
Comparative Advantage
Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as...
Confirmation of the virtues of free trade
When a country allows international trade and becomes an importer of a good...
Domestic consumers of the good become better off
When a country allows trade and becomes an exporter of a good..
Domestic producers become better off, and domestic consumers become worse off
A tariff on a product makes...
Domestic sellers better off and domestic buyers worse off
Some goods can be produced at low cost only if they are produced in large quantities. This phenomenon is called...
Economies of scale
The world price of a ton of steel is $650. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began...
Importing steel and the price per ton in Russia decreased to $650
Honduras is an importer of goose-down pillows. The world price of these pillows is $50. Honduras imposes a $7 tariff on pillows. Honduras is a price-taker in the pillow market. As a result of the tariff, the price of goose-down pillows in Honduras...
Increases to $57 and the quantity of goose-down pillows purchased in Honduras decreases
When a country that imports a particular good imposes a tariff on that good,
Producer surplus increases and total surplus decreases in the market for that good
When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good...
Producer surplus increases and total surplus increases in the market for that good
Zelzar has decided to end its policy of trading with the rest of the world. When it end restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?
Producers of steel and consumers of incense
The North American Free Trade Agreement...
Reduced trade restrictions among Canada, Mexico, and the United States
Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?
Republica began exporting paper as a result of the policy change
Tariffs and quotas are different in the sense that...
Tariffs raise revenue for the government, while quotas do not raise revenue for the government
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...
Teeveeland has a comparative advantage in producing televisions
When a country allows trade and becomes an importer of a good,
The gains of the domestic producers of the good exceed the losses of the domestic consumer of the good
A logical starting point from which the study of international trade begins is...
The principle of comparative advantage
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...
Vietnam has a comparative advantage over other countries and Vietnam will export textiles.
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...
Will export almonds
The price of sugar that prevails in international markets is called the...
World price of sugar
If the United States threatens to impose a tariff on Honduran blueberries if Honduras does not remove agricultural subsides, the United States will be...
Worse off if Honduras doesn't give in to the threat
