Econ practice part 4

If labor is abundant in India, but capital is scarce, when India opens to trade, the price of labor will _____, and the price of capital will _____.

• rise; rise

• fall; fall

• rise; fall

• fall; rise

If labor is scarce in Germany, but capital is abundant, when Germany opens to trade, the price of labor will _____ and the price of capital will _____.

• rise; rise

• fall; fall

• rise; fall

• fall; rise

In a single year, Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Venezuela can raise 50 tons of beef or produce 750 boxes of tulips. When the two countries begin trading beef for tulips, we expect the price of beef in Argentina:

• to fall.

• to rise

• to remain at the autarky price.

• to be 10 boxes of tulips.

Policies that limit imports, usually to insulate domestic producers from foreign competition, are known as:

• import-competing clauses.

• import reduction acts.

• trade protection.

• competition protection.

Restrictions on free international trade in lumber, designed to insulate domestic lumber producers from competitive market forces, are _____ policies.

• competitive

• protectionist

• free-trade

• antitrust

If the United States reduced tariffs on all softwood lumber, domestic _____ surplus would _____.

• producer; increase

• total; decrease

• consumer; decrease

• producer; decrease

If France levies tariffs on American goods entering France, in the short run, this will tend to _____ American producers and _____ French producers.

• benefit; benefit

• harm; benefit

• benefit; harm

• harm; harm

Assume that a tariff is imposed on Canadian imports into the United States. This tariff is likely to _____ American producers and _____ Canadian producers.

• penalize; penalize

• benefit; benefit

• benefit; penalize

• penalize; benefit

Assume that the United States imposes an import quota on Brazilian coffee. Relative to the equilibrium world price that would prevail in the absence of import quotas, it is likely that the equilibrium price of coffee in the United States will _____, and the equilibrium price of coffee in Brazil will _____.

• decrease; remain the same

• remain the same; increase

• increase; increase

• increase; decrease

If the United States imposes an import quota on Portuguese port, the result in the short run is likely to be _____ profits for American wine producers and _____ profits for Portuguese port producers.

• lower; lower

• lower; higher

• higher; lower

• higher; higher