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Economics 5th Edition Hubbard Test Bank 1
Economics 5th Edition Hubbard Test Bank 1
1) When the U.S. government places a tariff on a product, such as the tariff on tires imported from China,
the quantity of the product imported will generally ________ and the price paid by consumers for the
product will generally ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Answer: C
Diff: 1 Page Ref: 271/203
Topic: Trade Restrictions
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain the consequences of
such intervention
AACSB: Analytic thinking
Special Feature: Chapter Opener: Saving Jobs in the U.S. Tire Industry?
2) Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other
industries.
A) almost all jobs; economic growth
B) well over half of the jobs; price decreases
C) relatively few jobs; job losses
D) no jobs; increased productivity
Answer: C
Diff: 1 Page Ref: 271/203
Topic: Trade Restrictions
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain the consequences of
such intervention
AACSB: Analytic thinking
Special Feature: Economics in Your Life: Have You Heard of the Tariff on Chinese Tires?
1
Copyright © 2015 Pearson Education, Inc.
3) Protection in the form of tariffs create winners and losers. Winners include ________ and losers include
________.
A) U.S. consumers and taxpayers; foreign firms that rely on U.S. exports
B) firms sheltered from foreign competition; U.S. consumers and taxpayers
C) U.S. firms that rely on exports to foreign countries; foreign manufacturers
D) the U.S. government; firms sheltered from foreign competition
Answer: B
Diff: 1 Page Ref: 271/203
Topic: Trade Restrictions
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain the consequences of
such intervention
AACSB: Analytic thinking
Special Feature: Chapter Opener: Saving Jobs in the U.S. Tire Industry?
2
Copyright © 2015 Pearson Education, Inc.
4) Over the past several decades there has been a rapid growth in international trade. This growth has
been due to all except one of the following factors. Which factor has not contributed to the growth of
international trade?
A) the spread of reliable communications
B) a change in the tariffs charged on many goods
C) a reduction in shipping costs
D) favorable changes in government policies
Answer: B
Diff: 1 Page Ref: 272/204
Topic: Trade
*: Recurring
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain the consequences of
such intervention
AACSB: Analytic thinking
7) Domestically produced goods and services sold to other countries are referred to as
A) exports.
B) imports.
C) transfer payments.
D) capital outflow.
Answer: A
Diff: 1 Page Ref: 272/204
Topic: Exports
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
3
Copyright © 2015 Pearson Education, Inc.
8) When Sophie, a French citizen, purchases a Dell computer in Paris that was produced in Texas, the
purchase is
A) both a U.S. and an French import.
B) a U.S. import and an French export.
C) a U.S. export and an French import.
D) neither an export nor an import for either country.
Answer: C
Diff: 1 Page Ref: 272/204
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
9) When Tesla, a U.S. company, purchases Italian-made Pirelli tires for its automobiles, the purchase is
A) both a U.S. and an Italian import.
B) a U.S. import and an Italian export.
C) a U.S. export and an Italian import.
D) neither an export nor an import for either country.
Answer: B
Diff: 1 Page Ref: 272/204
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
10) Which of the following statements about the importance of trade to the U.S. economy is false?
A) Since 1950, both exports and imports have steadily increased as a fraction of U.S. gross domestic
product.
B) Overall, about 20 percent of U.S. manufacturing jobs depend directly or indirectly on exports.
C) The United States is the second largest exporter in the world.
D) The U.S. economy is highly dependent on international trade for growth in its gross domestic product.
Answer: D
Diff: 1 Page Ref: 273-275/205-207
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
11) Which of the following countries is not one of the top three exporting countries in the world?
A) China
B) Germany
C) South Korea
D) the United States
Answer: C
Diff: 1 Page Ref: 274/206
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
4
Copyright © 2015 Pearson Education, Inc.
12) Today, ________ of Goodyear's tire sales are in the North America.
A) only 11 percent
B) less than 40 percent
C) 65 percent
D) more than 80 percent
Answer: B
Diff: 1 Page Ref: 276-277/208-209
Topic: Exports
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
Special Feature: Making the Connection: Goodyear and the Tire Tariff
13) At the beginning of 2013, with the tariff on Chinese tires having expired, Goodyear's profits ________
compared to the previous year, and Chinese tire imports ________.
A) rose; increased
B) rose; decreased
C) fell; increased
D) fell; decreased
Answer: A
Diff: 1 Page Ref: 273-274/205-206
Topic: Exports
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
Special Feature: Making the Connection: Goodyear and the Tire Tariff
15) As a percentage of GDP, imports are greater than exports for which of the following countries?
A) Germany
B) Japan
C) the Netherlands
D) the United States
Answer: D
Diff: 1 Page Ref: 275/207
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be made from trade
AACSB: Analytic thinking
5
Copyright © 2015 Pearson Education, Inc.
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