国际贸易练习题(7-12章).doc

International Trade (Chapter 7-12)Chapter 7: Growth and TradeMultiple Choice1. One fundamental source of long-run economic growth would be:a. External scale economies.b. Lower wages.c. Improvements in production technologies.d. Exploiting comparative advantage.ANSWER:CFigure 7.1WheatCloth2. Referring to Figure 7.1, this outward shift of the production possibilities frontier is an example of:a. Biased growth.b. Balanced growth.c. The move from autarky to free trade.d. A fall in production costs.ANSWER:A3. Which of the following statements is true?I. Increases in a countrys endowments of land, labor, and capital will lead to long-run economic growth.II. Improvements in the technology used in production can lead to increases in output, but cannot lead to long-run economic growth.III. Improvements in technology and increases in the endowments of productive inputs can both cause the production-possibility curve to shift outward. a. I and IIb. I and IIIc. I, II and IIId. None of the aboveANSWER:B4. A capital-abundant country trades two goods with the rest of the world, medical equipment and corn. Medical equipment is relatively capital-intensive. An increase in the countrys endowment of capital, with no change in the price of either medical equipment or corn, will cause the output of medical equipment to _ and the output of corn to _.a. Rise; fallb. Fall; risec. Rise; rised. Fall; fallANSWER:ATrue/False Questions5. For a country already engaged in trade, biased growth will lead to an increased willingness to trade.ANSWER:FALSE6. If a country is small, then its trade will have no effect on its terms of trade.ANSWER:TRUE7. Growth could lead to either an increase or a decrease in a countrys willingness to trade.ANSWER:TRUE8. Growth with an increased willingness to engage in international trade will always improve the economic well-being of a country.ANSWER:FALSEEssay Questions9. Suppose that Country A, which has a relative abundance of capital, further expands its endowment of capital. Explain how this might affect the volume (amount) of trade and the international terms of trade with the rest of the world? Under what conditions (if any) would the economic well-being of Country A go down after this increase in capital? Explain.POSSIBLE RESPONSE: If the amount of capital in Country A increases, the result will be a biased growth toward the production of capital-intensive goods. As a result of this biased growth, the country will expand its production of capital-intensive goods and will reduce its production of goods requiring the intensive use of other factors of production (Rybczynski theorem).The country increases its willingness to trade. If the country is large, the increased willingness will affect the international price ratio (terms of trade) to the disadvantage of the country. If this effect is large enough, the result will be immizerising growth, which causes the country to lose well-being even though one of the factors of production is growing.Chapter 8: Analysis of a TariffMultiple Choice QuestionsFigure 8.1: The U.S. Market for ShoesPriceDd(domestic demand curve)Sd(domestic supply curve)World priceDomestic price with tariffQuantityS0D1S1D0abcd1. Referring to Figure 8.1, the impact of a tariff on shoes on the amount of domestic producer surplus is a _ measured by area _.a. Gain; ab. Loss; ac. Gain; (a+b)d. Loss; (a+b)ANSWER:A2. Referring to Figure 8.1, the impact of a tariff on shoes on the amount of domestic consumer surplus is a _ measured by area _.a. Gain; db. Loss; dc. loss; (a+b+c+d)d. Loss; (b+d)ANSWER:C3. Referring to Figure 8.1, the revenue collected by the U.S. government as a result of the tariff on shoes is shown by area _.a. ab. a + bc. cd. b + c + dANSWER:C4. Referring to Figure 8.1, the imposition of a tariff on shoes caused economic welfare in the U.S. to _ by an amount measured by area _.a. Fall; cb. Fall; (b+d) c. Fall; (b+c+d)d. Rise; (a+c)ANSWER:B5. Referring to Figure 8.1, what area measures the production effect of the tariff on shoes?a. ab. bc. cd. dANSWER:B6. Referring to Figure 8.1, what area measures the consumption effect of the tariff on shoes?a. ab. bc. cd. dANSWER:DTrue/False Questions7. A tariff imposed by a small country hurts the tariff imposing country but brings gains to the rest of the world.ANSWER:FALSE8. The consumption effect shows the welfare loss to the economy resulting from consumers shifting from imports to more expensive domestic production.ANSWER:FALSE9. The one-dollar, one-vote metric says that every dollar of gain is more important than every dollar of loss, regardless of who the gainers or losers are. ANSWER:FALSEEssay Questions10. You are given the following information about copper in the United States:SituationSituationWith TariffWithout TariffWorld Price$0.40 per lb.$0.50 per lb.Tariff (specific)$0.20 per lb.0U.S. Domestic Price$0.60 per lb.$0.50 per lb.U.S. Consumption210 million lb.250 million lb.U.S. Production140 million lb.100 million lb.a. Calculate the loss to U.S. consumers of copper from imposing the tariff.b. Calculate the gain to U.S. producers of copper from imposing the tariff.c. Calculate the gain in tariff revenue to the U.S. government from imposing the tariff.POSSIBLE RESPONSE: a. As a result of the tariff the domestic price rises by $0.10 (from $0.50 to $0.60) per pound. Consumers consume 250-210=40 million pounds less. The consumption effect is x $0.10 x 40 million = $2 million. Consumers lose additionally $0.10 x 210 million = $21 million due to the higher price they pay for their consumption after the tariff is imposed. They lose a total of $23 million.b. U.S. producers charge $0.10 more per pound and expand their production by 40 million pounds. Their gain of producer surplus from expanding the production quantity is x $0.10 x 40 million= $2 million. Their gain from selling the production quantity they used to sell before the tariff now at a $0.10 higher price is 100 million x $0.10=$10 million. Their gain totals $12 million. c. The tariff revenue to the U.S. government equals the product of the imported quantity and the tariff per unit. After imposing the tariff the U.S. imports 210-140=70 million pounds. The U.S. revenue is $0.20 x 70 million= $14 million.Chapter 9: Nontariff Barriers to ImportsMultiple Choice QuestionsFigure 9.1: The. Market for MP3 Players in a Small CountryPrice$80$90DdSdWorld priceDomestic price with quotaQuantity(Millions of MP3 players per year)10171222Sd + QQQuotaQQ1. Referring to Figure 9.1, what is the amount allowed in the quota on MP3 players?a. 2 million MP3 players.b. 5 million MP3 players.c. 12 million MP3 players.d. 17 million MP3 players.ANSWER:B2. Referring to Figure 9.1, the quota on MP3 players will cause domestic producers to:a. Gain $10 million.b. Lose $10 million.c. Gain $110 million.d. Gain $120 million.ANSWER:C3. Referring to Figure 9.1, the quota on MP3 players will cause domestic consumers to:a. Lose $25 million.b. Gain $25 million.c. Lose $170 million.d. Lose $195 million.ANSWER:D4. Referring to Figure 9.1, with a competitive auction, how much revenue can the government expect to receive?a. $20 million.b. $50 million.c. $120 million.d. $170 million.ANSWER:B5. Referring to Figure 9.1, given that a competitive auction is used by the government to allocate import licenses, the quota on MP3 players will cause a _ to the nation of _.a. Loss; $35 millionb. Loss; $85 millionc. Gain; $35 milliond. Loss; $195 millionANSWER:ATrue/False Questions6. Unlike a tariff, a quota does not cause either a production effect or a consumption effect.ANSWER:FALSE7. A tariff allows a domestic monopolist to assert its monopoly power. A quota does not.ANSWER:FALSE8. Exporting firms suffer greatly when hit with voluntary export restraints.ANSWER:FALSEEssay Questions 9. Your government is presently deciding whether or not to protect the domestic automobile industry. Are domestic steel-producing firms in favor of policies designed to protect the local automobile producers? Why or why not?POSSIBLE RESPONSE: Steel is a major input in the automotive industry. The automobile industry is a major consumer of steel, so the demand for steel is linked to the demand for automobiles. In particular, it can be expected that the protection of local automotive producers will keep the local production of automobiles high, which means there will be a high demand for steel locally. This benefits domestic steel-producing firms, so they will be in favor of such government policy. Chapter 10: Arguments for and against ProtectionMultiple Choice Questions1. In a “first-best” world:a. Free trade is not optimal.b. Free trade is economically efficient.c. Free trade benefits everyone.d. Free trade harms everyone.ANSWER:B2. A “first-best” world is one in which:a. Social marginal benefit (SMB) Price (P) = Buyers private marginal benefit (MB) = Sellers private marginal cost (MC) = Social marginal cost (SMC)b. Social marginal cost (SMC) Price (P) = Buyers private marginal benefit (MB) = Sellers private marginal cost (MC) = Social marginal benefit (SMB)c. Price (P) = Buyers private marginal benefit (MB) = Sellers private marginal cost (MC) = Social marginal cost (SMC) = Social marginal benefit (SMB) d. Social marginal benefit (SMB) Social marginal cost (SMC)ANSWER:C3. Which of the following statements is true?I. If young firms are struggling to obtain funding from underdeveloped financial markets, the most efficient policy solution would be a production subsidy.II. If young firms are struggling to retain their trained workers, then government should offer a subsidy to offset the costs of training workers.III. Infant industry tariffs are less likely to be removed than infant industry subsidies. a. I onlyb. I and IIc. II and IIId. II onlyANSWER:C4. Which of the following arguments for protection states that import-competing firms that are struggling to stay in business should be provided protection in order to maintain jobs and continue domestic production?a. The developing government argument. b. The infant industry argument.c. The dying industry argument. d. The national defense argument. ANSWER:CTrue/False Questions5. If Social marginal cost (SMC) Price (P) = Buyers private marginal benefit (MB) = Sellers private marginal cost (MC) = Social marginal benefit (SMB) too little is supplied.ANSWER:FALSE6. In the absence of any other distortion, a tariff will create a distortion, but a government subsidy will not create a distortion.ANSWER:FALSEChapter 11: Pushing ExportsMultiple Choice Questions1. Dumping is defined as:a. Selling exports at a price that is below normal value.b. Selling exports that are of a substandard quality.c. Selling exports at a price that is higher in foreign markets than the price charged to domestic consumers.d. International price discrimination favoring domestic consumers over foreign consumers.ANSWER:A2. Which of the following is occurring when a firm is selling its product for a low price in a foreign market, with the purpose of driving its foreign competitors out of business?a. Persistent dumping.b. Cyclical dumping.c. Predatory dumping.d. Seasonal dumping.ANSWER:C3. Which of the following statements about dumping is inaccurate?I. Consumers and import-competing producers are both hurt by dumping. II. Predatory dumping is frequent.III. The process for deciding whether to impose antidumping duties is biased toward finding dumping and imposing antidumping duties. a. I onlyb. II onlyc. I and IId. I, II, and IIIANSWER:CTrue/False Questions4. Firms that are participating in persistent dumping will sell less in the foreign market and charge a higher price than in the home market.ANSWER:FALSE5. Firms that are participating in persistent dumping need to be able to prevent resale between the foreign and domestic markets.ANSWER:TRUE6. If markets are competitive, policies that restrict imports are usually harmful to the importing country while policies that encourage exports are usually beneficial to the exporting country.ANSWER:FALSE Essay Questions7. Thai farmers grow and sell 100 units of rice at a price of $100 per unit. Of the 100 units, 20 are exported. If urban consumers succeed in getting the Thai government to ban all exports of rice, the domestic price of rice would drop to $80 per unit and farmers would grow and sell 80 units. How much loss would the export ban bring to Thai farmers?POSSIBLE RESPONSE: This problem is illustrated in the following graph.$100wPrice$80 New PriceQuantity100Supply of rice in ThailandvInitial Price80xThe initial situation defines a producer surplus measured by the area w + v. The ban on the exports of rise lowers the price to $80, and the new producer surplus is given by area w. The loss is area v, which can be calculated as (v + x) x = (100 - 80) x 100 (100 - 80) x (100 - 80)/2 = 2000 200 = 1800.Chapter 12: Trade Blocs and Trade BlocksMultiple Choice Questions1. Which of the following features does a free trade area have?I. Free trade among the members.II. Common external tariffs.III. Free movement of factors of production.IV. Harmonization of all economic policies.a. Ib. I and IIc. I, II, and IIId. I, II, III, and IVANSWER:A2. Which of the following features does a common market have?I. Free trade among the members.II. Common external tariffs.III. Free movement of factors of production.IV. Harmonization of all economic policies.a. Ib. I and IIc. I, II, and IIId. I, II, III, and IVANSWER:C3. Which of the following features does an economic union have?I. Free trade among the members.II. Common external tariffs.III. Free movement of factors of production.IV. Harmonization of all economic policies.a. Ib. I and IIc. I, II, and IIId. I, II, III, and IVANSWER:DTrue/False Questions4. A free-trade area removes trade barriers between member countries, but allows the member countries to maintain their own trade barriers against trade with nonmember countries.ANSWER:TRUE5. The most favored nation (MFN) principle states that any trade concession given to any foreign country must be given to all other countries having the same MFN status.ANSWER:TRUE6. Trade creation is the volume of trade that is redirected from low-cost exporters to higher-cost trade bloc member countries. ANSWER:FALSEEssay Questions 7. Suppose that the constant marginal cost of producing an extra automobile is $11,000 in Canada, $8,000 in t