Question :
21) The ________ hurt by importing a good.
A) domestic consumers : 1240682
21) The ________ are hurt by importing a good.
A) domestic consumers of the good
B) domestic producers of the good
C) domestic governments
D) foreign producers of the good
E) foreign governments
22) When the United States imports goods from the rest of the world, which of the following parties is harmed?
i.domestic producers of the good
ii.domestic consumers of the good
iii.foreign producers of the good
A) i only
B) ii only
C) iii only
D) i and iii
E) i, ii, and iii
23) The two main reasons why international trade is restricted is because restricting trade means that governments can ________ and because domestic businesses ________.
A) create jobs; earn profits
B) obtain revenue; rent seek
C) rent seek; want to dump
D) prevent dumping; want to dump
E) rent seek; obtain revenue
24) Comparing developed and developing nations in their use of tariffs, we see that
A) the developing nations’ governments get very little revenue from tariffs.
B) both governments get large amounts of revenue from tariffs.
C) many developing nations’ governments get a large portion of their revenue from tariffs.
D) developing nations almost never impose tariffs because they want their people to obtain goods and services at the lowest possible price.
E) developed nations rely much more than developing nations on tariff revenue.
25) A major reason why it is difficult to lower the barriers to free trade is
A) that total benefits are less than total costs from free trade.
B) the uneven distribution of gains and losses from free trade.
C) the loss of jobs without any gain of jobs from free trade.
D) the inability to compensate losers from free trade.
E) that the barriers allow us to compete with cheap foreign labor.
26) What is rent seeking with respect to restricting international trade?
A) The rent on factory buildings increases if trade is restricted.
B) The government avoids paying rent on buildings when importers pay the tariff.
C) An attempt to capture the gains from trade by imposing a tariff.
D) The government’s efforts to capture tariff rents.
E) The attempt by importers to avoid paying a tariff.
27) Which of the following groups gain from international trade?
i.producers of exported goods
ii.domestic consumers of imported goods
iii.workers in exporting firms
A) i only
B) ii only
C) iii only
D) i and iii
E) i, ii, and iii
28) Why are the losers from free international trade not fully compensated for their losses?
A) The amount of compensation needed would bankrupt the government.
B) The people who claim to lose are also the same ones who benefit.
C) Identifying all losers and the size of their losses is extremely difficult.
D) No one actually loses from international trade.
E) The losers are foreigners.
29) Trade is often restricted because the
A) total gain to all producers is larger than the total loss to all consumers.
B) total gain to all producers is smaller than the total loss to all consumers.
C) gain per producer is larger than the loss per consumer.
D) gain per producer is less than the loss per consumer.
E) gain per consumer is larger than the loss per producer.
30) The national security argument is used by those who assert they want to
A) increase imports as a way of strengthening their country.
B) increase exports as a way of earning money to strengthen their country.
C) limit imports that compete with domestic producers important for national defense.
D) limit exports to control the flow of technology to third world nations.
E) limit all imports.
31) The argument that it is necessary to protect a new industry to enable it to grow into a mature industry that can compete in world markets is known as the
A) national security argument.
B) diversity argument.
C) infant-industry argument.
D) environmental protection argument.
E) national youth protection argument.
32) ________ occurs when a foreign firm sells its exports at a lower price than its cost of production.
A) Dumping
B) The trickle-down effect
C) Rent seeking
D) Tariff avoidance
E) Nontariff barrier protection
33) The United States
A) needs tariffs to allow us to compete with cheap foreign labor.
B) does not need tariffs to allow us to compete with cheap foreign labor.
C) should not trade with countries that have cheap labor.
D) will not benefit from trade with countries that have cheap labor.
E) avoids trading with countries that have cheap labor.
34) Why do governments in less-developed nations impose tariffs?
A) The government gains revenue from the tariff.
B) The government’s low-paid workers are protected from high-paid foreign workers.
C) The nation’s total income will be increased.
D) The national security of the country definitely is improved.
E) The government diversifies its economy.
35) What is a major reason international trade is restricted?
A) rent seeking
B) to allow competition with cheap foreign labor
C) to save jobs
D) to prevent dumping
E) to eliminate monopolies
