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43 Cards in this Set
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The characteristic of nations that differentiates them from regions and that allows them the freedom to decide what policies they will pursue is: A)self-interest. B)sovereignty. C)democracy. D)communism. |
B) Sovereignty |
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Increasing tariffs generally has what effect on the country imposing the tariffs? A) They protect the country imposing the tariffs from harmful trade practices of other countries. B) The country imposing the tariff generally has a net economic loss as a result of the tariff. C) Domestic producers of the products subject to the tariff generally gain as a result of increased production, but their workers generally lose because of lower wages. D) Consumers in the country imposing the tariff generally benefit because they have access to higher quality goods. |
B) The country imposing the tariff generally has a net economic loss as a result of the tariff. |
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In the mid-2000s, what was the result of the decline in U.S. tire production and the increase in the importation of tires? A)The number of tire production workers in the U.S. declined. B)The price of tires in the U.S. increased dramatically. C)The value of tires purchased by U.S. consumers decreased significantly. D)The collection of import duties by the U.S. decreased significantly. |
A.The number of tire production workers in the U.S. declined. |
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Immigration that is the result of people moving from country to country seeking employment has what economic effect?A)Countries to which immigrants move are benefitted by an increased labor force but the immigrants are not benefitted because the jobs they are able to find are low-paying jobs. B)Countries to which immigrants move are not benefitted because the social costs of the immigrants to the country are greater than any economic benefit received by the country as the result of an increased labor force, but the immigrants benefit from increased employment. C)Immigrants are benefitted because they find higher paying jobs than they could have found without migrating, and countries to which they immigrate are benefitted as a result of an increased work force and increased economic activity. D)Immigrants are not benefitted because they have to take the lowest paying jobs that the country has to offer, and countries are not benefitted because the social costs of the immigrants are more than the benefits received as a result of the increased work force and increased economic activity. |
C)Immigrants are benefitted because they find higher paying jobs than they could have found without migrating, and countries to which they immigrate are benefitted as a result of an increased work force and increased economic activity. |
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Temporary trade barriers to protect against surges of imports from specific countries, if such surges are causing significant harm to a domestic industry, are called: A)tariffs. B)safeguards. C)exchange rates. D)trade deficits. |
B.safeguards. |
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The value of one country's currency expressed in terms of another country's currency is the: A)exchange rate. B)international valuation rate. C)currency-to-currency rate. D)comparative currency rate. |
A)exchange rate. |
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Why have so many states enacted laws in recent years to limit immigration? A)The U.S. Constitution places the responsibility for dealing with immigration on the states. B)Congress has enacted laws specifically granting authority to states to deal with immigration. C)Federal courts have ruled in recent cases that only state law can address immigration within a state. |
D)Comprehensive reform of federal law regarding immigration has not materialized and states have enacted laws dealing with immigration to fill that gap. |
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One of the first sign of the financial crisis that appeared in 2007 was: A)the trade surplus that China reported and the devaluation of the Chinese yuan. B)the rising default rate of sub-prime mortgages and the losses on securities that were backed by those mortgages. C)the purchase of Bear Stearns by J.P. Morgan Chase and the bankruptcy of Lehman Brothers. D)the near failure of AIG as a result of the credit default swaps that it had issued. |
B)the rising default rate of sub-prime mortgages and the losses on securities that were backed by those mortgages. |
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When considering factor mobility, how can land be mobile? A)Natural resources can be removed from the land and taken away. B)Land can be put to different productive uses. C)Land use can be controlled by government. D)Political boundaries can change so that land can be excluded from or included in a particular city or state or country. |
B)Land can be put to different productive uses. |
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With regard to migration, where are people more likely to move? A)To other countries within their region. B)To other countries outside of their region. C)Within their own country. D)People are not more likely to move any one place than another. |
C)Within their own country. |
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With respect to financial capital, "home bias" means a preference to invest in: A)one's own country. B)other countries. C)one's own family. D)any firm that does business in one's own country. |
A) one's own country. |
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One thing that international economics and economics in general have in common is that both: A)deal with a common currency. B)deal with consumers and producers seeking the same benefits. C)ignore the effects of different political situations. D)deal with the challenges of scarce resources. |
D)deal with the challenges of scarce resources. |
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What factor has the most profound effect of discouraging the mobility of financial capital internationally? A)exchange rates B)varying interest rates C)the preference for investors to invest in their own countries D)trade barriers such as tariffs |
C)the preference for investors to invest in their own countries |
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By 2006, the cost of production of natural gas in Canada was _____________ because_________________________ A)decreasing; economies of scale reduce costs. B)decreasing;improvements in technology reduce costs. C)increasing; the lowest cost sources were being depleted. D)stable; increasing costs were offset by increasing demand. |
C)increasing; the lowest cost sources were being depleted. |
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Adverse environmental effects of trade decisions are called: A)external negative effects. B)negative externalities C)positional externalities D)negative welfare loss. |
B)negative externalities |
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In the early part of the 21st century, what did the Chinese government do to bring stability to the value of the Chinese yuan? A)It restricted the purchase of yuan. B)It bought yuan on the international market. C)It bought U.S. dollars and sold yuan. D)It sold yuan and bought gold. |
C)It bought U.S. dollars and sold yuan. |
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______________________ is defined as the increase in the economic well-being of producers who sell a product at a market price higher than the lowest price that they would have been willing to accept. A)Opportunity cost B)Elasticity of supply C)Producer surplus D)National demand |
C)Producer surplus |
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______________________ is buying something in one market and selling it at a profit in another market because of a price difference in those markets. A)Arbitrage B)Equilibrium C)Free trade D)Demand |
A)Arbitrage |
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The net gain to consumers from buying any product is the: A)value of the utility that they experience from owning the product B)difference between what consumers are willing to pay for a product and the price they must pay to purchase the product. C)price they pay for the product. D)difference between the regular price of the product and the amount they paid for the product. |
B)difference between what consumers are willing to pay for a product and the price they must pay to purchase the product. |
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A change in the price of an item causes: A)movement of the demand curve for the item. B)movement along the demand curve for the item. C)consumers to buy more |
B)movement along the demand curve for the item. |
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The primary factors that determine how much of a product a firm is willing to supply are: A)unfilled orders for the product and predicted orders for the product. B)the price the firm receives from the sale of the product and the cost to the firm of producing and selling the product. C)demand and consumer surplus. D)the price the firm receives from the sale of the product and consumer demand for the product. |
B)the price the firm receives from the sale of the product and the cost to the firm of producing and selling the product. |
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In the context of international currency regulations a "crawling peg" is a(n): A)policy in which the government allows small changes in the exchange rate value of the country's currency. B)policy in which a government has "pegged" or tied the country's currency value to the value of the currency in a more economically stable country. C)exchange rate regime imposed on a currency by the World Bank. D)result of the refusal of a country to allow its currency value to be determined on the world market. |
A)policy in which the government allows small changes in the exchange rate value of the country's currency. |
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What is the primary factor that affects both international trade flows of goods and services and international financial flows? A)Exchange rates B)Trade barriers C)Tariffs D)Interest rates |
A)Exchange rates |
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The most important economic policies that countries can control involve: A)defense and military actions since the security of a country must be its primary concern. B)production of energy since a secure energy source is vital to the country's well-being. C)protection of the environment since environmental damage occurs not only domestically but also internationally. D)movement of production resources, taxing and spending, and money and exchange. |
D)movement of production resources, taxing and spending, and money and exchange. |
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Possibly the most important difference between domestic and international trade is that international transactions often involve: A)people who have not dealt with each other before. B)use of different currencies. C)people from different cultures. D)transactions that take a long time to complete. |
B)use of different currencies. |
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Who controls the supply of a particular currency? A)The World Bank. B)The international exchange market. C)The central bank of the country that issued the currency. D)The central bank of the country holding the largest amount of the currency. |
C)The central bank of the country that issued the currency. |
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What does classical economics say about factor mobility? A)Factors of production are not mobile across national boundaries. B)Land cannot move but workers and capital do move across national boundaries. C)All factors of production are mobile without regard to political boundaries. D)Land and workers are mobile across national boundaries, but capital is not. |
A)Factors of production are not mobile across national boundaries. |
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All of the following are determinants of quantity demanded by consumers in a market except: A)consumers' taste, preferences and opinion of the product. B)the price of the product compared to the price of substitute products. C)the income that consumers have to spend. D)the amount of producer surplus on the last unit sold. |
D)the amount of producer surplus on the last unit sold. |
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There is a strong presumption that consumer demand curves: A)are horizontal. B)are vertical. C)slope downward. D)slope upward. |
C)slope downward. |
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A change in the price of an item causes: A)movement of the demand curve for the item. B)movement along the demand curve for the item. C)consumers to buy more. D)consumers to buy less. |
B)movement along the demand curve for the item. |
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In 2009, how much of the world's exports were attributed to industrialized countries?A)1/4 B)1/3 C)1/2 D)3/5 |
D)3/5 |
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One way to measure responsiveness of quantity demanded to changes in price of an item is by observing the: A)slope of the demand curve. B)movement of the demand curve. C)changes in consumer preferences. D)location of the equilibrium point. |
A)slope of the demand curve. |
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Price elasticity of demand measures: A)the consumer surplus that buyers of an item can expect to receive. B)how often the price of an item changes in a given time period. C)how much the price of an item changes in a given period of time. D)the percentage change in quantity demanded resulting from a 1 percent change in the price of an item. |
D)the percentage change in quantity demanded resulting from a 1 percent change in the price of an item. |
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Consumer surplus is: A)a net gain to consumers who are able to buy a product at a market price lower than the highest price they are willing and able to buy the product for. B)the total revenue that a consumer pays when buying a product. C)the difference between the quantity that consumers buy of a product and the quantity supplied of this product. D)the difference between the value a consumer places on a product and the lowest price that anyone can pay for that product. |
A)a net gain to consumers who are able to buy a product at a market price lower than the highest price they are willing and able to buy the product for. |
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Consumer surplus is used to measure: A)consumer confidence. B)the impact on a country of changes in the country's international trade. C)the impact on consumers of changes in the market price of a product. D)the amount of a product that consumers will buy at a specific price. |
C)the impact on consumers of changes in the market price of a product. |
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A profitable competitive firm will supply units up to the point at which: A)the price at which the product can be sold starts to decrease. B)consumer demand begins to decrease. C)its production capacity is reached. D)the price it receives for a product just about equals the extra cost incurred in producing another unit. |
D)the price it receives for a product just about equals the extra cost incurred in producing another unit. |
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The cost to a firm of producing an extra unit of its product is determined by the: A)resources or inputs necessary to produce that unit and the price at which that unit can be sold. B)resources or inputs necessary to produce that unit and the costs to the firm of those resources or inputs. C)demand for that unit. D)efficiency with which the firm can produce the product. |
B)resources or inputs necessary to produce that unit and the costs to the firm of those resources or inputs. |
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The additional cost of producing one additional unit of product is called the: A)product cost. B)break-even cost. C)marginal cost. D)total cost. |
C)marginal cost. |
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The supply curve for a product illustrates the amounts of a product that will be supplied at different prices and assumes that other factors that might affect supply are constant. The factors that might cause a supply curve to shift include: A)availability of needed inputs and the technology that determines what inputs are needed to produce the product. B)demand. C)personal preferences of consumers. D)the market price of the product. |
A)availability of needed inputs and the technology that determines what inputs are needed to produce the product. |
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If the quantity supplied of a product is not responsive to changes in the price of the product: A)supply of that product is elastic. B)supply of that product is static. C)demand for the product is elastic. D)supply of that product is inelastic. |
D)supply of that product is inelastic. |
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The value of other goods and services that are not produced because available resources are used to produce a product is called: A)sunk costs. B)opportunity costs. C)economic profit. D)producer surplus. |
B)opportunity costs. |
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The difference between what one group in a country gains from international trade and what another group in the country loses from that trade is: A)arbitrage. B)supply of exports. C)equilibrium. D)net national gain from trade. |
D)net national gain from trade. |
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International trade is a positive-sum activity. This means that: A)everyone wins in international trade. B)there is money to be made in international trade. C)most countries gain from international trade, so the whole world has a net gain from international trade. D)there is only a limited amount of trade that can be conducted, so there will always be winners and losers in international trade. |
C)most countries gain from international trade, so the whole world has a net gain from international trade. |
