Econ 101 - Principles of Macroeconomics » Fall 2021 » Chapter Quiz Chapter 9

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Question #1
If free trade is allowed, a country will export a good if the world price is
A.   above the before-trade domestic price of the good.
B.   below the before-trade domestic price of the good.
C.   equal to the before-trade domestic price of the good.
D.   none of the above.
Question #2
Suppose the world price is below the before-trade domestic price for a good. If a country allows free trade in this good,
A.   both producers and consumers will gain.
B.   producers will gain and consumers will lose.
C.   both producers and consumers will lose.
D.   consumers will gain and producers will lose.
Question #3
If the world price for a good exceeds the before-trade domestic price for a good, then that country must have
A.   a comparative advantage in the production of the good.
B.   an absolute disadvantage in the production of the good.
C.   a comparative disadvantage in the production of the good.
D.   an absolute advantage in the production of the good.
Question #4
When a country allows trade and exports a good,
A.   domestic producers are better off, domestic consumers are worse off, and the nation is worse off because the losses of the losers exceed the gains of the winners.
B.   domestic consumers are better off, domestic producers are worse off, and the nation is better off because the gains of the winners exceed the losses of the losers.
C.   domestic producers are better off, domestic consumers are worse off, and the nation is better off because the gains of the winners exceed the losses of the losers.
D.   domestic consumers are better off, domestic producers are worse off, and the nation is worse off because the losses of the losers exceed the gains of the winners.
Question #5
When politicians argue that outsourcing or offshoring of technical support to India by Dell Computer Corporation is harmful to the U.S. economy, they are employing which of the following arguments for restricting trade?
A.   the deadweight-loss argument
B.   the jobs argument
C.   the national-security argument
D.   the infant-industry argument
Question #6
Which of the following statements about a tariff is true?
A.   A tariff increases producer surplus, decreases consumer surplus, increases revenue to the government, and increases total surplus.
B.   A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and reduces total surplus.
C.   A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and increases total surplus.
D.   A tariff increases producer surplus, decreases consumer surplus, increases revenue to the government, and reduces total surplus.
Question #7
Which of the following statements about import quotas is true?
A.   Import quotas are preferred to tariffs because they raise more revenue for the imposing government.
B.   For every tariff, there is an import quota that could have generated a similar result.
C.   An import quota reduces the price to the domestic consumers.
D.   Voluntary quotas established by the exporting country generate no deadweight loss for the importing country.
Question #8
Which of the following is not employed as an argument in support of trade restrictions?
A.   Free trade destroys domestic jobs.
B.   Free trade is harmful to importing countries if foreign countries subsidize their exporting industries.
C.   Free trade harms both domestic producers and domestic consumers and therefore reduces total surplus.
D.   Free trade harms infant industries in an importing country.
E.   Free trade harms the national security if vital products are imported.
Question #9
Because producers are better able to organize than consumers are, we would expect there to be political pressure to create
A.   export restrictions.
B.   import restrictions.
C.   free trade.
D.   none of the above.

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