Macroeconomics Answers

QUESTION 8

This argument for protectionism is to block imports for only a limited time.

1. The jobs argument.
2. The national defense argument.
3. The infant industry argument.
4. The inflated industry argument.
5. All of the above.

QUESTION 9

Trade policy is an example where regulations can redirect economic forces:

1. And prevent them from manifesting themselves elsewhere.
2. But it cannot prevent them from manifesting themselves elsewhere.
3. Always causing significant harm to society.
4. Always creating significant benefit for society.
5. All of the above.

QUESTION 10

These laws block imports that are sold below the cost of production.

1. Antitrust laws.
2. Unfair competition laws.
3. Anti-dumping laws.
4. Anti-selling laws.
5. Anteater laws.

QUESTION 5

Americans had the least favorable attitude toward increasing globalization with:

1. 38% surveyed saying very good.
2. 53 percent surveyed saying somewhat good.
3. 59 percent total in favor.
4. 59% total against globalization.
5. All of the above.

QUESTION 6

The support of farmers in high-income countries:

1. Harms farmers in those high-income countries.
2. Has no impact on farmers in those high-income countries.
3. Also benefits farmers in low-income countries.
4. Has no impact on farmers in low-income countries.
5. Is devastating to the livelihoods of farmers in low-income countries.

QUESTION 7

A rule requiring certain safety standards can:

1. Limit imports as effectively as high tariffs.
2. Limit imports as effectively as low import quotas.
3. Limit imports only less effectively than high tariffs.
4. Limit imports only less effectively than low import quotas.
5. Both answers A and B above.

QUESTION 1

What is the annual cost per job saved through protectionism in the ball bearing industry?

1. $200,000.
2. $400,000.
3. $600,000.
4. $800,000.
5. $1 million.

QUESTION 2

The U.S.:

1. Is the only country that trades.
2. Is less internationally connected than most countries.
3. Is more internationally connected that most countries.
4. All of the above.
5. None of the above.

QUESTION 3

Protectionism is simply a method of:

1. Requiring consumers to subsidize producers.
2. Requiring producers to subsidize consumers.
3. Requiring consumers to subsidize themselves.
4. Requiring producers to subsidize themselves.
5. All of the above.

QUESTION 4

It is difficult to find evidence of:

1. Predatory pricing by foreign firms exporting to the U.S.
2. Infant industries.
3. Protectionism.
4. All of the above.
5. None of the above.

QUESTION 15

When one country has an absolute advantage in all goods:

1. Then trade cannot occur.
2. Then trade is not advantageous.
3. Then only one country can benefit from trade.
4. Then both countries can still benefit from trade.
5. Then both countries would be harmed by trade.

QUESTION 16

The theory of comparative advantage suggests that:

1. Trade is a zero-sum situation.
2. One country can only benefit at the expense of another.
3. Everyone will benefit if they figure out their areas of comparative advantage.
4. Everyone will benefit if they focus on their areas of absolute advantage.
5. All of the above.

QUESTION 17

Trade has accompanied economic growth:

1. In the U.S., but not in the rest of the world.
2. In the U.S., and the rest of the world.
3. In the rest of the world, but not in the U.S.
4. Neither in the U.S. nor in the rest of the world.
5. All of the above.

QUESTION 18

Samsung is Apple Computer’s:

1. Largest supplier.
2. Greatest competitor.
3. Largest customer.
4. All of the above.
5. Answers A and B only.

QUESTION 12

The volume of international trade:

1. Has increased dramatically in the last few decades.
2. Has increased slightly in the last few decades.
3. Has decreased slightly in the last few decades
4. Has decreased dramatically in the last few decades.
5. All of the above.

QUESTION 13

It is difficult to measure the potential advantages to consumers of:

1. Having a variety of products available.
2. Having a greater degree of competition among producers.
3. Producing more efficiently.
4. All of the above.
5. Answers A and B only.

QUESTION 14

We all benefit from living in economies where:

1. Fundamental beliefs are strictly enforced.
2. People and firms can specialize and trade with each other.
3. People and firms are prevented from specializing.
4. People and firms are prevented from trading.
5. All of the above.  

QUESTION 8

Gains from trade come from:

1. Excessive negotiations.
2. Specializing in one’s comparative advantage.
3. Individuals becoming generalists.
4. Above.
5. All of the above.

QUESTION 9

Even without 100% specialization, if the trading price is greater than the country’s opportunity cost:

1. There are benefits to trading.
2. Is constant.
3. Is fixed.
4. No trades will take place.
5. All of the above.  

QUESTION 10

Why do countries trade?

1. International law requires them to.
2. They have similar comparative advantages.
3. They have identical comparative advantages.
4. They have different comparative advantages.
5. They have identical absolute advantages.

QUESTION 11

Absolute advantage simply compares the productivity of a worker:

1. In leaner years.
2. To the productivity of capital.
3. In one year to that same worker in a different year.
4. Between countries.
5. All of the above.

QUESTION 4

Traditionally, tariffs were used simply as a political tool to protect:

1. Certain social interests.
2. Certain cultural interests.
3. Certain vested economic interests.
4. All of the above.
5. None of the above.

QUESTION 5

The linear production possibilities frontier:

1. Is a less realistic model.
2. Is a more realistic model.
3. Illustrates increasing opportunity costs.
4. Illustrates decreasing opportunity costs.
5. All of the above.

QUESTION 6

The underlying reason why trade benefits both sides is:

1. The government forces it to.
2. Based on absolute advantage.
3. Rooted in the concept of opportunity cost.
4. Tooted from the hills.
5. Muted on the television.

QUESTION 7

Trade really occurs:

1. To keep poor folks down.
2. To get even with the rich.
3. Because of absolute advantage.
4. Because of comparative advantage.
5. All of the above.

QUESTION 1

When both countries shift production toward each of their comparative advantages:

1. Their combined production of both goods increases.
2. Their combined production of both goods decreases.
3. Their combined production of both goods remains unchanged.
4. Total efficiency decreases.
5. Total efficiency remains unchanged.

QUESTION 2

The slope of the production possibilities frontier illustrates:

1. The demand for the products shown.
2. The supply of the products shown.
3. The cost of producing the products shown.
4. Absolute advantage.
5. The opportunity cost of producing one product in terms of an alternative product that could be produced.

QUESTION 3

High-income countries can produce all products:

1. With fewer resources than a low-income country.
2. With a lower opportunity cost.
3. But only at a higher opportunity cost.
4. Needed globally.
5. But can never gain an absolute advantage.

QUESTION 27

When a firm invests in new technology, the profits that it receives are:

1. Guaranteed.
2. Illegal.
3. Only a portion of the overall social benefits.
4. Greater than the overall social benefits.
5. All of the above.

QUESTION 28

A key insight into paying for public goods is to find a way:

1. To distribute them fairly.
2. To distribute them efficiently.
3. To encourage free riders.
4. To prevent free riders.
5. To plow without a tractor.

QUESTION 29

These goods are rivalrous, but do not allow free riders to be excluded.

1. Public goods.
2. Club goods.
3. Common resources.
4. Private goods.
5. All of the above.

QUESTION 23

Positive externalities to education typically include:

1. A cleaner environment.
2. Democratic government.
3. Better health outcomes for the population.
4. Lower crime rates.
5. All of the above.

QUESTION 24

There are some goods that do not fall:

1. When tripped.
2. Neatly into the categories of private good or public good.
3. Neatly into the categories of male or female.
4. But rather spring into action.
5. What about winter???

QUESTION 25

Cooperation between government-funded universities, academies, and the private sector:

1. Is unconstitutional.
2. Has been ineffective at promoting innovation.
3. Can spur product innovation and create whole new industries.
4. Can spur product innovation but not create new industries.
5. Can create new industries, but is unable to spur product innovation.

QUESTION 26

With a patent, a firm is able to earn monopoly profits on its product:

1. Only in rare circumstances.
2. For a period of time.
3. For all eternity.
4. For a wrinkle in time.
5. All of the above.