Many U.S. producers complain about limited access to the Japanese market They say that they cannot export to Japan

Many U.S. producers complain about limited access to the Japanese market. They say
                            that they cannot export to Japan because Japanese import restrictions are so severe. Who
                            gains? Who loses?

a.Everyone loses.

b.Japanese producers gain, U.S. producers and Japanese consumers lose.

c.Japanese producers and consumers gain, U.S. producers and consumers lose.

d.Japanese consumers and U.S. consumers gain, Japanese producers lose

e.Everyone gains.

122.              Textile workers in the U.S. complain that they cannot compete with low cost foreign
                            textile producers. While some U.S. textile workers may lose their jobs, an advantage is

a.the U.S. gets cheaper textiles

b.U.S. imports will become more expensive so U.S. domestic producers gain

c.workers in other countries will buy more U.S. clothing exports

d.the U.S. can retaliate and its exporting strength is greater

e.the U.S. can dump its textiles on other markets without fearing retaliation because
U.S. textiles are made with high cost labor

123.              Which of the following is not used as a trade protection practice?

a.tariff

b.quotas

c.safety standards

d.foreign-owned domestic production

e.nontariff barriers

124.              The European Economic Community

a.is a good example of a customs union

b.is a region in which the production of basic goods, such as steel and energy, are
produced collectively

c.is a free trade area

d.prohibits imports from other countries

e.created the GATT rules

125.              The difference between a free trade area and a customs union is that

a.countries of a free trade area set their own tariff policy with respect to members
of the area while countries of a customs union have a uniform tariff policy with
respect to members of the union

b.governments receive custom duties (income) from all trade within the customs union
countries while the governments of a free trade area don’t

c.free trade area countries engage in reciprocity while countries of a customs union
can, but need not engage in reciprocity

d.countries of a free trade area set their own tariff policy with respect to nonmembers
of the area while countries of a customs union have a uniform tariff policy with
respect to nonmembers of the union

e.free trade area countries don’t share a common border, such as Canada and Mexico,
while custom union countries do

126.              The difference(s) between NAFTA and the EEC is (are)

a.that the EEC is a free trade area while NAFTA is a customs union

b.that NAFTA is a free trade area while the EEC is a customs union

c.that both NAFTA and EEC are custom unions, but the EEC is in Europe while
NAFTA is in North America

d.that both NAFTA and EEC are free trade areas, but the EEC is in Europe while
NAFTA is in North America

e.that NAFTA countries place no tariffs on trade while the EEC countries do

127.              Suppose that with international trade now a possibility, two trading nations restructure
                            their production from both having produced clothes and food to one producing clothes
                            and the other producing food. What gains do they experience? What problems may they
                            experience?

a.Gains are higher labor productivity and greater total output. Problems may be
economic inefficiency.

b.Gains are economic efficiency. Problems may be trade wars.

c.Gains are people in both nations having higher incomes. Problems may be that the
nations cannot find an acceptable trading price between food and clothes.

d.Gains are higher labor productivity and greater total output. Problems may arise from
dependence on the other for vital goods.

e.Gains are economic efficiency. There are no problems as long as they engage in free
trade.

128.              Nations that cannot participate in international trade (for, say, geographic or political
                            reasons) cannot gain the benefits of

a.economic growth and security

b.tariff protection

c.specialization in production

d.economic independence

e.having choice among production possibilities

129.              If a nation’s production possibilities curve is a straight line

a.the law of increasing costs does not apply

b.the law of increasing costs applies

c.there are no gains from trading with other nations

d.the gains from trading with other nations are captured by the other nations

e.the gains from trading with other nations are captured by the nation

130.              Free trade means that nations can buy and sell goods from each other

a.unless absolute advantage favors one nation

b.without government interference, e.g., tariffs and quotas

c.without having to abide by comparative advantage

d.and choose their own level of tariffs against each other

e.according to their own national quotas