Professional Documents
Culture Documents
Economics 4Th Edition Hubbard Test Bank Full Chapter PDF
Economics 4Th Edition Hubbard Test Bank Full Chapter PDF
1) In early versions of the 2009 stimulus bill, a "Buy American" provision required
A) tariffs be levied on all imports to the United States.
B) all goods manufactured in the United States be subsidized by the government.
C) all manufactured goods bought with stimulus money to be made in the United States.
D) taxpayers to pay penalties for all purchases of imports.
Answer: C
Diff: 1 Page Ref: 273/205
Topic: Trade Restrictions
Learning Outcome: Micro 5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Reflective Thinking
Special Feature: Chapter Opener: Does the Federal Government's "Buy American" Policy Help
U.S. Firms?
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: 273/205
Topic: Trade Restrictions
Learning Outcome: Micro 5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Reflective Thinking
Special Feature: Economics in Your Life: Have You Heard of the "Buy American" Provision?
1
Copyright © 2013 Pearson Education, Inc.
3) "Buy American" provisions 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: 273/205
Topic: Trade Restrictions
Learning Outcome: Micro 5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Reflective Thinking
Special Feature: Chapter Opener: Does the Federal Government's "Buy American" Policy Help
U.S. Firms?
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: 274/206
Topic: Trade
*: Recurring
Learning Outcome: Micro 5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Reflective Thinking
Special Feature: None
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: 274/206
Topic: Exports
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
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: 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: Reflective Thinking
Special Feature: None
9) 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 largest exporter in the world.
D) The U.S. economy is highly dependent on international trade for growth in its gross domestic
3
Copyright © 2013 Pearson Education, Inc.
product.
Answer: D
Diff: 1 Page Ref: 274-275/206-207
Topic: Trade
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
10) In 2010, ________ of Caterpillar's sales were inside the United States.
A) only 12 percent
B) less than one-third
C) more than half
D) 5 percent
Answer: B
Diff: 1 Page Ref: 276-277/208-209
Topic: Exports
Learning Outcome: Micro 3: Discuss different types of market system and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: Making the Connection: How Caterpillar Depends on International Trade
13) Twenty-seven countries in Europe have formed the European Union (EU). After the EU was
formed it
A) eliminated all tariffs among its member countries.
B) completed a trade treaty (NAFTA) that reduced tariff rates between the EU and North
American countries.
C) greatly decreased imports and exports among its member countries.
D) barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets
from Airbus, a European company.
Answer: A
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: Reflective Thinking
Special Feature: None
14) The 1994 agreement that eliminated most tariffs among the United States, Canada, and
Mexico is known as
A) the Pacific Trade Association.
B) Trade Without Borders.
C) NAFTA.
D) the Western Trade Union.
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: Reflective Thinking
Special Feature: None
15) In the 1930s the United States charged an average tariff rate
A) that was less than its average tariff rate in 2007.
B) that cut its exports to other countries by 50 percent.
C) that was less than 2 percent.
D) that exceeded 50 percent.
Answer: D
Diff: 1 Page Ref: 274/206
Topic: Tariffs
*: Recurring
Learning Outcome: Micro 5: List ways in which governments intervene in markets and explain
5
Copyright © 2013 Pearson Education, Inc.
the consequences of such intervention
AACSB: Reflective Thinking
Special Feature: None
17) Although the United States is the leading exporting country, international trade is less
important to the U.S. than it is to most other countries.
Answer: TRUE
Diff: 1 Page Ref: 274-275/206-207
Topic: Trade
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
18) Jim Owens, Caterpillar's CEO, was encouraged that the "Buy American" provision in the
2009 stimulus bill would generate a large increase in Caterpillar's sales.
Answer: FALSE
Diff: 1 Page Ref: 276-277/208-209
Topic: Trade
Learning Outcome: Micro 5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Reflective Thinking
Special Feature: Making the Connection: How Caterpillar Depends on International Trade
19) What are three primary reasons for the growth of international trade over the past 50 years?
Answer: The increase in trade is the result of the falling costs of shipping products around the
world, the spread of inexpensive and reliable communications, and changes in government
policies.
Diff: 1 Page Ref: 274-275/206-207
Topic: Trade
6
Copyright © 2013 Pearson Education, Inc.
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
1) ________ is the ability to produce more of a good or service than competitors when using the
same amount of resources.
A) Absolute advantage
B) Comparative advantage
C) Trade superiority
D) Trade autarky
Answer: A
Diff: 1 Page Ref: 278/210
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
Table 9-1
Berries Fish
Rob 20 80
Bill 30 60
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to
find and make their own food. Rob and Bill spent one day each fishing and picking berries. The
following table lists the pounds of output Rob and Bill produced.
7
Copyright © 2013 Pearson Education, Inc.
3) Refer to Table 9-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Rob has an absolute advantage in picking berries and Bill has an absolute advantage in
catching fish.
B) Bill has an absolute advantage in picking berries and Rob has an absolute advantage in
catching fish.
C) Bill has an absolute advantage in picking berries and catching fish.
D) Rob has an absolute advantage in picking berries and catching fish.
Answer: B
Diff: 2 Page Ref: 278/210
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytic Skills
Special Feature: None
4) Refer to Table 9-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Bill has a greater opportunity cost than Rob for picking berries.
B) Bill's opportunity cost for catching fish is less than Rob's.
C) Rob has a greater opportunity cost than Bill for picking berries.
D) Bill's opportunity cost for picking berries and catching fish are both greater than Rob's.
Answer: C
Diff: 3 Page Ref: 278/210
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytic Skills
Special Feature: None
5) Refer to Table 9-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Bill has a comparative advantage in catching fish.
B) Rob has a comparative advantage in picking berries.
C) Rob has a comparative advantage in catching fish and picking berries.
D) Bill has a comparative advantage in picking berries.
Answer: D
Diff: 3 Page Ref: 278/210
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytic Skills
Special Feature: None
8
Copyright © 2013 Pearson Education, Inc.
6) Refer to Table 9-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Rob has a comparative advantage in catching fish.
B) Bill has an absolute advantage in catching fish.
C) Bill has a comparative advantage in catching fish.
D) Rob has a comparative advantage in picking berries and catching fish.
Answer: A
Diff: 3 Page Ref: 278/210
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytic Skills
Special Feature: None
8) Assume that Honduras has a comparative advantage in producing bananas and exports
bananas to Brazil. We can conclude that
A) Honduras also has an absolute advantage in producing bananas relative to Brazil.
B) Honduras has a lower opportunity cost of producing bananas relative to Brazil.
C) Brazil has an absolute disadvantage in producing bananas relative to Honduras.
D) Labor costs are higher for banana producers in Brazil than in Honduras.
Answer: B
Diff: 2 Page Ref: 277/209
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
9) Whenever a buyer and a seller agree to trade, both must believe they will be made better off
A) unless the buyer resides in a different country than the seller resides in. International trade
may make the buyer or seller worse off.
9
Copyright © 2013 Pearson Education, Inc.
B) unless one party is richer than the other.
C) only if the buyer and seller live in countries with market economies.
D) whether the buyer and seller live in the same city or different countries.
Answer: D
Diff: 1 Page Ref: 278/210
Topic: Trade
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
10) If Norwegian workers are more productive than Albanian workers, then trade between
Norway and Albania
A) cannot take place because Norwegian goods and services will be less expensive than
Albanian goods and services.
B) will take place so long as each country has a comparative advantage in a good or service that
buyers in the other country want.
C) cannot take place until Albanian workers become more productive.
D) can take place only if Albania has an absolute advantage in producing a good or service
Norwegian buyers want.
Answer: B
Diff: 1 Page Ref: 278/210
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
11) If the ________ cost of production for two goods is different between two countries then
mutually beneficial trade is possible.
A) marginal
B) explicit
C) opportunity
D) implicit
Answer: C
Diff: 1 Page Ref: 277/209
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
12) If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then
A) the average cost of production for sugar cane is lower in Brazil than in Cuba.
10
Copyright © 2013 Pearson Education, Inc.
B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba.
C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.
D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba.
Answer: C
Diff: 1 Page Ref: 277/209
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
13) If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of
the following would explain this pattern of trade?
A) Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark
has a comparative advantage in producing butter.
B) The opportunity cost of producing butter in Denmark is higher than the opportunity cost of
producing butter in Sweden.
C) Sweden must have an absolute advantage in producing cell phones and Denmark must have
an absolute advantage in producing butter.
D) Sweden has a higher opportunity cost of producing cell phones than Denmark, and Denmark
has a higher opportunity cost of producing butter.
Answer: A
Diff: 2 Page Ref: 277/209
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
14) The ability of a firm or country to produce a good or service at a lower opportunity cost than
other producers is called comparative advantage.
Answer: TRUE
Diff: 2 Page Ref: 277/209
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
15) If Finland has an absolute advantage in the production of two goods compared to Latvia,
Finland can still benefit from trade with Latvia.
Answer: TRUE
Diff: 1 Page Ref: 278/210
Topic: Absolute Advantage
11
Copyright © 2013 Pearson Education, Inc.
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
Table 9-2
Table 9-2 shows the output per hour of work for light bulbs and flash drives in Mexico and in
Canada.
16) Refer to Table 9-2. Fill in the following table with the opportunity costs of producing light
bulbs and flash drives for Mexico and Canada.
Answer:
Light Bulbs Flash Drives
Mexico 0.25 4
Canada 4 0.25
17) Refer to Table 9-2. a.Which country has an absolute advantage in the production of light
bulbs and flash drives?
b. Which country has a comparative advantage in the production of light bulbs?
c. Which country has a comparative advantage in the production of flash drives?
Answer: a. Neither country has an absolute advantage in the production of both products.
b. Mexico has a comparative advantage in the production of light bulbs.
c. Canada has a comparative advantage in the production of flash drives.
Diff: 1 Page Ref: 278/210
Topic: Absolute Advantage
*: Recurring
12
Copyright © 2013 Pearson Education, Inc.
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytic Skills
Special Feature: None
3) Countries gain from specializing in producing goods in which they have ________ and trading
for goods in which other countries have ________.
A) a comparative advantage; an absolute advantage
B) an absolute advantage; an absolute advantage
C) a comparative advantage; a comparative advantage
D) an absolute advantage; a comparative advantage
Answer: C
Diff: 1 Page Ref: 279/211
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
13
Copyright © 2013 Pearson Education, Inc.
AACSB: Reflective Thinking
Special Feature: None
5) The first example of comparative advantage appeared in a book that was published in 1817.
This example showed that mutually beneficial trade between two countries (England and
Portugal) was possible. The example assumed that two goods (wine and cloth) could be
produced by both countries. Which of the following describes the conclusion of this example?
A) Portugal had a comparative advantage in wine and England had a comparative advantage in
cloth.
B) Portugal had a comparative advantage in both wine and cloth, but its advantage in cloth was
greater.
C) England had a comparative advantage in both wine and cloth, but its advantage in cloth was
greater.
D) England had an absolute advantage in both wine and cloth, but a comparative advantage in
wine.
Answer: A
Diff: 1 Page Ref: 280-281/212-213
Topic: Comparative Advantage
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: Solved Problem: The Gains from Trade
6) Examples of comparative advantage show how trade between two countries can make each
better off. Compared to their pre-trade positions, trade makes both countries better off because
in each country
A) total employment is greater.
B) total consumption of goods is greater.
C) wages are higher.
D) total welfare is greater.
Answer: B
Diff: 1 Page Ref: 279/211
Topic: Comparative Advantage
*: Recurring
14
Copyright © 2013 Pearson Education, Inc.
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
7) In the real world we don't observe countries completely specializing in the production of
goods for which they have a comparative advantage. All of the following are reasons for this
except
A) not all goods and services are traded internationally.
B) some countries have more resources than other countries.
C) tastes for many traded goods are different in many countries because of globalization.
D) production of most goods involves increasing opportunity costs.
Answer: B
Diff: 2 Page Ref: 282/214
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro 3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Reflective Thinking
Special Feature: None
THE CARRIAGE.
For the purpose of description, the carriage is considered as
composed of the following groups: Sleigh (including recoil
mechanism), cradle, trail, traveling lock, elevating mechanism,
traversing mechanism, wheels, road brake, and shield.
The sleigh contains the recoil and counter-recoil mechanism and
serves as a support for the howitzer, being secured to it by the
breech key and the holding-down band. The recoil counter-recoil
cylinders, and two air cylinders are bored in the sleigh and form the
recoil mechanism. The ends of the recoil and counter-recoil cylinders
are attached to the cradle and when the howitzer is fired the sleigh
and howitzer recoil, sliding on the cradle sides.
The holding down band is anchored on either side to the front
band clips, which are secured to the sleigh. Grooves are cut
underneath the two top edges of the sleigh, and are lined with
bronze liners, known as sleigh slides. These liners slide on the
cradle clips and guide the howitzer during recoil. Five longitudinal
cylinders are bored in the sleigh, the two upper cylinders running
about one-third the length of the sleigh, forming air tanks and are
closed at the front end by the air tank heads. The left air tank head is
provided with an opening in which the gage-cock body is assembled.
A pressure gage may be assembled through an adapter to this gage-
cock for ascertaining the pressure in the counter recoil system. The
gage-cock is also provided with a pointer which registers the quantity
of liquid in the system on a scale provided on the air tank head. The
two lower cylinders extending the full length of the sleigh, form
a housing for the recoil mechanism, the right cylinder being the
counter-recoil cylinder and the left the recoil cylinder. The small
equalizing cylinder in the center of the sleigh, extending only a short
distance, is closed at the front end with the filling valve, through
which air or liquid is introduced into the system.
The body of the sight is rotated by the leveling worm engaging the
worm segment cut on the under side of the body. The outer end of
the worm is provided with a knurled hand wheel by means of which
the leveling mechanism is operated. The leveling stop, secured to
bracket, engages slot in the body, thus limiting the angular motion of
the body in either direction. The rear end of the cylindrical part of the
bracket is split and provided with a leveling clamp by means of which
the body may be locked in position after it has been leveled.
The cross level is located on the rear edge of the sight shank and
serves the gunner in determining the level position of the instrument.
The level vial is a glass tube, closed at both ends, and partially filled
with a liquid consisting of 4 per cent alcohol and 60 per cent ether, a
small bubble remaining in the tube. Graduations are etched on the
circumference of the tube to indicate the central position of the
bubble. The vial is held in a level-vial tube, the ends being wrapped
in paper and set in plaster of paris. The knurled cross-level cover fits
over the holder and, together with the level-vial tube, are held in
place by the cross-level caps, which close the ends of the holder.
When closed, the cover serves as a protection for the vial.
The elevating mechanism consists principally of a sight shank,
elevating worm wheel, antibacklash pinion, elevating worm, elevating
worm eccentric, elevating scale drum, and scale drum housing.
EXPLOSIVES.
As a matter of practical interest, explosives may be divided into
three classes, namely:
(1) Progressive or propelling explosives called low explosives.
(2) Detonating or disruptive explosives, termed high
explosives.
(3) Detonators or exploders, known as fulminates.
The first includes all classes of gun powders used in firearms of all
kinds; the second, explosives used in shell, torpedoes, and for
demolitions; the third, those explosives used to originate explosive
reactions in the two first classes. Corresponding names are given to
the phenomena characteristic of each class of explosives, (1)
explosions proper, of low order, progressive, or combustions, (2)
detonations, of high order, (3) fulminations, this last possessing
exceptional brusqueness.
The explosion of low order is marked by more or less progression;
the time element is involved as a controlling factor, the time required
to complete the explosive reaction being large compared with that of
the other forms of explosion.
The second class of explosion is of a different nature. The
explosive reaction is not limited or confined to the surfaces exposed
but appears to progress in all directions throughout the mass radially
from the point of initial explosion. It has been determined
experimentally that the velocity of propagation of the explosive wave
throughout a mass of guncotton is from 17,000 to 21,000 feet per
second.
Fulmination is a class of explosion still more brusque than the last.
The abruptness of their explosion and the consequent sharpness of
the blow and the concentration of heat on the point of ignition
constituting their efficiency as originators of explosions of the first
two classes.
Methods of Exploding. Explosives may be exploded by three
methods; in reality but two, by heat and by application of energy as
by a blow. The heat may be applied directly by friction, by electricity
and detonating cap, these two methods of applying the heat giving
rise to the three practical methods above mentioned. As it is not
practical to apply heat directly to the charge, small charges of special
explosives are made up into primers and these are exploded in one
of the ways above mentioned and so communicate the explosion to
the main charge. Fulminate of mercury is one of the high explosives
fulfilling the requirements and it is readily exploded by any one of the
methods mentioned. It is used in all detonating caps. Primers for
cannon also contain an additional charge of black powder to
increase the flame. For this purpose also igniting charges of black
powder are attached to the smokeless powder charges for the larger
calibers.
Uses. The chief use of low or progressive explosives is as a
propelling charge in guns and for blasting where it is desired to exert
a pushing effect rather than a blow. High explosives are used when it
is desired to exert a high pressure and shatter the container, as in a
shell, mine, etc. This class is not satisfactory as a propelling charge
for the reason that its rapidity of action is so great that the pressure
exerted would burst the gun before the projectile could start. Low
explosives are not satisfactory shell fillers for the reason that their
action is so low that the shell would break at its weakest point before
all the explosives had exploded and what remained would be
wasted. With a high explosive, all or most of the charge explodes
before the shell can break up. The greater the rapidity of action of an
explosive the finer the fragmentation of the projectile. With too rapid
action the pieces are too small; with too slow action they are too
large. Experience teaches the proper rapidity of action to attain the
fragmentation most efficient against animate and material targets.