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What has happened to the real value of world merchandise trade over the past 40 years? Why has this change happened?

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The real value of world merchandise trad...

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Country A decides to sign a trade agreement with Country B. Suppose Country B specializes in producing electronics. We can expect the quantity of electronics imported from Country B to________ and the price of electronics in Country A to ________.


A) increase; increase
B) increase; remain unchanged
C) increase; decrease
D) decrease; decrease
E) decrease; increase

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Which country has the world's biggest economy?


A) Japan
B) Germany
C) United States
D) China
E) India

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Use the following scenario to answer the next questions: An economy has two workers, Smith and Ricardo. Each day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones. -The opportunity cost for Smith to produce one computer is ________ smartphone(s) .


A) one-quarter of a
B) one-half of a
C) one
D) two
E) four

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The following graph depicts the market for a particular good in Dorne. Dorne was importing the good under free trade and then decided to impose a tariff. Use the graph to answer the next questions: The following graph depicts the market for a particular good in Dorne. Dorne was importing the good under free trade and then decided to impose a tariff. Use the graph to answer the next questions: -How much revenue does the government earn from the tariff? A) $100 B) $600 C) $220 D) $1,320 E) $40 -How much revenue does the government earn from the tariff?


A) $100
B) $600
C) $220
D) $1,320
E) $40

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Use the following graph to answer the next questions: Use the following graph to answer the next questions: -What is the price of a car if this is a nontrading closed) economy? A) $6,000 B) $8,000 C) $10,000 D) $14,000 E) $24,000 -What is the price of a car if this is a nontrading closed) economy?


A) $6,000
B) $8,000
C) $10,000
D) $14,000
E) $24,000

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Trade deficit is


A) the sum of a nation's total exports and total imports.
B) the difference between a nation's total exports and total imports.
C) when a nation exports more than it imports.
D) when a nation imports more than it exports.
E) when a nation no longer feels it has the need for trade partners.

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Use the following scenario to answer the next questions: An economy has two workers, Smith and Ricardo. Each day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones. -________ has the comparative advantage in computers and ________ has the comparative advantage in smartphones.


A) Smith; Smith
B) Smith; Ricardo
C) Ricardo; Smith
D) Ricardo; Ricardo
E) Neither Smith nor Ricardo; Smith

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The following graph depicts the market for a particular good in Dorne. Dorne was importing the good under free trade and then decided to impose a tariff. Use the graph to answer the next questions: The following graph depicts the market for a particular good in Dorne. Dorne was importing the good under free trade and then decided to impose a tariff. Use the graph to answer the next questions: -When the tariff is imposed, imports will fall from A) 130 to 110. B) 80 to 50. C) 60 to 50. D) 20 to 10. E) 130 to 60. -When the tariff is imposed, imports will fall from


A) 130 to 110.
B) 80 to 50.
C) 60 to 50.
D) 20 to 10.
E) 130 to 60.

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Florida's nice beaches and subtropical climate give the state ________ in tourism.


A) a comparative advantage
B) specialization
C) a trade benefit
D) higher income than all other states
E) self-sufficiency

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In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber exported to the United States. This is an example of an)


A) import quota.
B) export subsidy.
C) voluntary quota.
D) protective tariff.
E) revenue tariff.

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A tariff is a tax imposed on ________ good.


A) an imported
B) a luxury
C) an illegal
D) the most popular
E) a domestic

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List three trade-restrictive policies.

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Trade-restrictive po...

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What exactly is the advantage of the principle of comparative advantage?

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Gains in trade arise when nations are ab...

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Use the following graph to answer the next questions: Use the following graph to answer the next questions: -If this is a nontrading closed) economy, the price of a TV will be A) $75. B) $125. C) $175. D) $225. E) $275. -If this is a nontrading closed) economy, the price of a TV will be


A) $75.
B) $125.
C) $175.
D) $225.
E) $275.

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Many people argue that certain industries, such as weapons, energy, and transportation, should be protected by trade barriers in the interest of


A) national infrastructure.
B) national security.
C) the unemployment rate in those industries.
D) technological advancement.
E) economic independence.

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An economy that does not trade with the rest of the world is a(n) ________ economy.


A) open
B) command
C) trade
D) closed
E) one-person

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A rich nation will trade with a poor nation and vice versa) because the


A) rich nation has a comparative advantage in all products.
B) poor nation has an absolute advantage in all products.
C) rich nation has an absolute advantage in all products.
D) poor nation has a comparative advantage in a product.
E) poor nation does not have any comparative advantage.

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An example of a voluntary quota is


A) Venezuela charging an additional 20 percent tax on imported oil from Iran.
B) a decision by the United Kingdom to limit Malaysian shoe imports to 250,000 per year.
C) South Korean electronics manufacturers agreeing to limit exports to New Zealand.
D) France charging an additional 10 percent tax on imports of Vietnamese clothing.
E) a decision by the United States to limit South Korean television imports to 100,000 per year.

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Use the following scenario to answer the next questions: Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour. -Based on the scenario, Rosa has


A) an absolute advantage in producing basketballs, but not footballs.
B) an absolute advantage in producing footballs, but not basketballs.
C) an absolute advantage in producing both goods.
D) an absolute advantage in producing neither good.
E) no comparative advantage.

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