Trade Agreements and Economics Quiz

According to the 2017 poll mentioned in the text, what percentage of Americans feel that trade agreements benefit the United States?

• 52%

• 93%

• 75%

• 65%

What concept did Adam Smith write about in The Wealth of Nations to argue against the idea that international trade is a zero-sum game?

• The benefits of exports over imports

• The importance of government policies

• The idea of economies of scale

• The costs and benefits of trade

What is the main reason economists believe trade is good, as mentioned in the text?

• Because it creates a competitive sporting event

• Because it leads to government policies that encourage exports

• Because it helps establish economics as an academic discipline

• Because both imports and exports are at all-time highs

What does the term "economies of scale" refer to, as defined in the glossary?

• The ratio of output per worker per unit of time

• The measure of the goods and services available to each person in a country

• Factors that cause a producer's average cost per unit to fall as output rises

• Goods or services that are produced domestically but sold abroad

What is the economic lesson illustrated by the trade of a bag of grapes for a stack of crackers?

• Trade is a zero-sum game where only one party benefits.

• Trade is a positive-sum game where both sides can gain.

• Trade always results in a loss for the consumer.

• Trade does not affect the availability of goods and services.

According to the text, what do domestic companies gain from international trade?

• A decrease in the quality of their products.

• An increase in competition that may harm their business.

• The opportunity to grow and produce on a larger scale.

• A reduction in the variety of goods available to consumers.

How does international trade benefit consumers?

• By limiting the variety of goods and services available to them.

• By increasing the prices of imported goods and services.

• By providing access to a larger variety of goods and services.

• By reducing the incentives for domestic producers to improve quality.

What is one way that international trade can lead to increased productivity?

• By reducing the amount of physical capital available.

• By encouraging the use of outdated technology.

• By providing access to technology and equipment not produced domestically.

• By decreasing the overall scale of production.

What is a tariff according to the document?

• A government payment to a domestic producer that reduces production costs.

• A tax imposed by a nation on an imported good that increases the price of the imported good.

• A self-imposed limitation on the number of goods that a nation voluntarily imposes on itself.

• A limit on the quantity (or total value) of a good that may be imported during a given period of time.

What is the purpose of trade barriers as mentioned in the document?

• To increase international cooperation and global market access.

• To protect domestic industries and workers from foreign competition.

• To reduce the cost of imported goods for consumers.

• To encourage domestic producers to export more goods.