Raising an existing tariff on grapes from Chile will:
a. increase U.S. imports of Chilean grapes.
b. decrease U.S. consumption of domestically produced grapes.
c. decrease total U.S. consumption of grapes.
d. do all of the above.
Question 2An individual insured against a particular cost,
a. has reduced incentives to take precautions against those costs.
b. may take on additional risk because he/she is insured.
c. faces incentives that can result in higher insurance rates.
d. All of the above are true.
Question 3Firms in industrial countries find a larger market for their goods in other industrial countries than in developing countries because:
a. the consumption patterns in the industrial countries are highly heterogeneous.
b. the trade policies of the industrial nations are more favorable than the developing countries.
c. the industrial countries tend to have a higher population than the developing countries.
d. the industrial countries are capital intensive countries.
e. the consumption patterns in the industrial countries are more or less similar.
Question 4Raising an existing tariff on grapes from Chile will:
a. increase U.S. imports of Chilean grapes.
b. increase U.S. consumption of domestically produced grapes.
c. increase total U.S. consumption of grapes.
d. do all of the above.
Question 5If quality-detection costs are very low,
a. lower quality products will tend to be outcompeted in the market, and the average quality will rise.
b. lower quality products will tend to be outcompeted in the market, but the average quality will fall.
c. higher quality products will tend to be outcompeted in the market, and the average quality will rise.
d. higher quality products will tend to be outcompeted in the market, and the average quality will fall.
Question 6The fact that the United States exports Budweiser beer and imports Heineken beer can be explained by:
a. the differences in labor productivity in the U.S. and other countries.
b. the differences in factor endowments in the U.S. and its trading partners.
c. the world price of Budweiser beer is lower than Heineken beer.
d. the fact that production of Budweiser beer in the U.S. is inadequate compared to its demand.
e. the preference for foreign brands of beer by a part of the U.S. population.
Question 7Reducing existing tariffs on tomatoes would:
a. reduce imports of tomatoes.
b. increase U.S. consumption of domestically produced tomatoes.
c. decrease total U.S. consumption of tomatoes.
d. none of the above
Question 8Which of the following looks at the demand side of the market to explain some of the observed international trade patterns?
a. The theory of consumer preferences
b. The factor abundance theory
c. The product life cycle theory
d. The Ricardian model
e. The human skills approach
Question 9The free rider problem suggests that a producer will tend to:
a. produce more than the optimal quantity of a public good.
b. produce less than the optimal quantity of a public good.
c. produce the optimal quantity of a public good if it is funded out of tax revenue.
d. do none of the above.
Question 10Introducing a tariff on vitamin E would:
a. reduce imports of vitamin E.
b. increase U.S. consumption of domestically produced vitamin E.
c. decrease total U.S. consumption of vitamin E.
d. all of the above.
Question 11The theory that explains the shift of color TV sets production from the United States to Japan and Taiwan is called the _____ theory.
a. productivity difference
b. factor abundance
c. product life cycle
d. preference
e. human skills
Question 12The determination of which goods are public goods depends on:
a. public laws.
b. normative considerations.
c. whether it is produced directly by the government or produced by a private sector firm.
d. whether it is possible to exclude additional users from consuming the good if they do not pay for it.
Quick Reply
