Quiz - Chapters 7 and 26 (Practice)

Quiz - Chapters 7 and 26 (Practice) - Points Awarded 180.00...

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Points Awarded 180.00 Points Missed 20.00 Percentage 90.0% 1. The United States and Turkey have vastly different economies, with the United States being considerably larger in scale. Then according to the theory of comparative advantage, trade between the two countries will benefit A) only the United States. B) only Turkey. C) both countries. D) neither country. Points Earned: 5.0/5.0 Correct Answer(s): C 2. Diversity of tastes ________ trade; greater economies of scale ________ trade. A) increases, increase B) increases, decrease C) decreases, increase D) decreases, decrease Points Earned: 5.0/5.0 Correct Answer(s): A
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3. Trade is restricted because A) we cannot compensate all those people who claim to be harmed by free trade. B) anti-free trade groups spent a lot of money to lobby for protection. C) it is the most effective way to deal with countries that "dump" their goods in the United States. D) Both answers A and B are correct. Points Earned: 5.0/5.0 Correct Answer(s): D 4. In the above figure, suppose Graceland imposes a quota of 15,000 computers a year on computer imports from Laland. What will be the price of a computer in Graceland? A) $900 B) $850 C) $800 D) None of the above prices are correct. Points Earned: 5.0/5.0 Correct Answer(s): A
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5. Since 1930, tariff levels in the United States have A) generally declined. B) steadily risen. C) increased during expansions. D) decreased during recessions. Points Earned: 5.0/5.0 Correct Answer(s): A 6. The theory of comparative advantage states that a country A) with relatively low wages will only export goods. B) with relatively high wages can expect no gains from international trade. C) can increase its consumption of all goods through trade. D) can only trade freely and fairly with another country if the wage levels of the two countries are comparable. Points Earned: 5.0/5.0 Correct Answer(s): C 7. NAFTA became effective on A) January 1st, 1934.
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B) January 1st, 2004. C) January 1st, 1994. D) January 1st, 1947. Points Earned: 5.0/5.0 Correct Answer(s): C 8. Economists agree that it would be wise to protect certain industries in the United States A) so that the U.S. economy becomes more diverse. B) to make the U.S. economy more stable. C) to create a comparative advantage. D) The statement errs because economists make no arguments for protection. Points Earned: 5.0/5.0 Correct Answer(s): D 9. The activities in which U.S. workers are relatively more productive A) pay higher wages. B) are those in which the United States has a comparative advantage. C) are at risk of disappearing from the United States when NAFTA is completed. D) Both answers A and B are correct.
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Points Earned: 5.0/5.0 Correct Answer(s): D 10. A business that contends that it needs temporary protection so that it can grow large enough to compete with foreign producers is using an argument known as the A) national defense case for tariffs. B) social advantages case for tariffs.
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Quiz - Chapters 7 and 26 (Practice) - Points Awarded 180.00...

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