A U.S. tariff on French wine will likely benefit U.S. wine producers and the U.S. government (by ...

A U.S. tariff on French wine will likely benefit U.S. wine producers and the U.S. government (by increasing tax revenue), but harm U.S. wine drinkers and French wine producers.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Which of the following countries receives the largest share of U.S. exports?
 a. Mexico
  b. Germany
  c. Japan
  d. Canada
  e. United Kingdom

Question 3

Consumers are generally willing to spend more time researching cars before making a purchase than they do researching paper towels because:
 a. the cost of gathering information about paper towels is very small.
 b. the cost of gathering information about cars is less than the cost of gathering information about paper towels.
  c. the cost of gathering information about cars is less than the cost of gathering information about paper towels.
  d. the net benefit from gathering additional information about paper towels is likely much greater than the net benefit derived from gathering additional information about cars.

Question 4

A nation can gain from international trade when the relative domestic prices of the nation differs from that in other countries, and it imports goods for which it is a high opportunity cost producer.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 5

Whether exchange is between individuals, firms, or countries, voluntary trade occurs because:
 a. only one party is made better off.
  b. both parties are made better off.
  c. financial agents devote resources to arranging such trades.
  d. these trades create employment for the economy.
  e. of mandates from the government.

Question 6

The practice of potential buyers offering lower prices for a product of uncertain quality than they would for a product of certain quality is known as:
 a. the lemon problem.
  b. moral hazard.
 c. external costs.
 d. None of the above.

Question 7

Import tariffs in the United States are likely to reduce U.S. exports, both because of the resulting decrease in foreign earnings of dollars from exports to the United States and because of the likelihood of increases in other countries' import restrictions against U.S. goods.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 8

The theory of comparative advantage is based on:
 a. absolute opportunity costs.
  b. relative opportunity costs.
  c. total costs of production.
  d. total costs, including transportation costs.
  e. a comparison of marginal cost with average variable costs.

Question 9

Which of the following goods is least likely to be provided by the private sector?
 a. a good characterized by nonrivalry in consumption from which nonpaying customers can be excluded
 b. a good characterized by nonrivalry in consumption from which paying customers cannot be excluded
 c. a good characterized by rivalry in consumption from which nonpaying customers can be excluded
 d. a good for which the marginal private benefit to an individual exceeds the marginal cost of producing the good

Question 10

Major U.S. exporters would be likely to oppose the sort of protectionist policies favored by domestic producers that compete with imports.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 11

Nations trade what they produce in excess of their own consumption to:
 a. generate jobs for the domestic economy.
  b. earn good will from the World Bank.
  c. prevent chronic surpluses from driving down domestic prices.
  d. acquire other things they want to consume.
  e. reduce the size of their foreign trade deficit.