micro chapter 21 study quiz

The infant industry argument can be justified because

A new industry may be difficult to start in the face of existing foreign competition

An embargo is

A prohibition on exports or imports

A tax imposed on imported goods is

A tariff

Over a given period of time, if exports are greater than imports, the result is

A trade surplus

The United States imports heavily in all of the following markets except

Aircraft

Consumption possibilities, during a given time period, refer to the

Alternative combinations of goods and services that a country can consume

According to the text, which of the following are both imports and exports for the United States?

Cars, computers, and auto parts

Which of the following is not a reason to restrict trade?

Concern about high prices for consumers

When tariffs are imposed, the losers include

Domestic consumers and foreign producers

Which group is most likely to be adversely affected by the importation of foreign steel?

Domestic steelworkers

In terms of the world as a whole, imports must equal exports because

Every good exported by one country becomes an import for another country

Goods and services sold to foreign buyers are

Exports

A country with a comparative advantage in producing computer chips

Has a lower opportunity cost of producing computer chips than its trading partners

Increased opportunities for trade increase production by

Improving efficiency through specialization

Specialization in production

Increases output

A country has a comparative advantage in a good if

It can produce a good at a lower opportunity cost relative to another country

If trade is mutually beneficial, then increasing trade

Leads to increased output in export industries

Without trade, a country's consumption possibilities are

Limited to its domestic production possibilities

The United States exports more than it imports

Only in services

Protectionism achieves which of the following goals?

Protection of infant industries

Producers of paper products are most likely to be in favor of

Protectionism in the paper product market but free trade in the lumber market

International trade

Redistributes income from import-competing industries to export industries

Increased trade restrictions

Reduce total consumption possibilities

As trade restrictions are eliminated, increased imports

Shift the allocation of resources away from import-competing industries

The expansion of world output as a result of trade is mainly due to the effects of

Specialization according to comparative advantage

Which of the following is true?

The United States has a very low export ratio.

A beggar-thy-neighbor policy is

The imposition of trade barriers to increase domestic employment

A country's export ratio is

The ratio of exports to GDP

If U.S. quotas on imported sugar were eliminated,

The supply of sugar in the United States would shift to the right and sugar prices would fall

World output of goods and services increases with specialization because

The world's resources are being used more efficiently