ECON 202 Chapter 38

A nation will neither export nor 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. Import demand curve is downsloping.

A

Tariffs: A. May be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs). B. Are also called import quotas. C. Are excise taxes on goods exported abroad. D. Are per-unite subsidies designed to promote exports.

A

Countries engaged in international trade specialize in production based on: A. Relative levels of GDP B. Comparative exchange C. Relative exchange rates D. Relative inflation rates

B

In order for mutually beneficial trade to occur between two otherwise isolated nations: A. Each nation must be able to produce at least one good absolutely cheaper than the other. B. Each nation must be able to produce at least one good relatively cheaper than the other.

B

The primary gain from international trade is: A. Increased employment in the domestic export sector. B. More goods than would be attainable trough domestic production alone. C. Tariff revenue D. Increased employment in the domestic import sector.

B

The terms of trade reflect the: A. Ratio at which gold exchanges internationally for any domestic currency. B. Ratio at which nations will exchange two goods. C. Fact that the gains from trade will be equally divided. D. Cost conditions embodied in a single country's production possibilities curve.

B

Suppose the United States eliminates high tariffs on German bicycles. As a result, we would expect: A. The price of German bicycles to increase in the United States. B. Employment to decrease in the German bicycle industry. C. Employment to decrease in the U.S. bicycle industry. D. Profits to rise in the U.S. bicycle industry.

C

Which country has the largest share of total world exports? A. Japan B. Germany C. United States D. China

D