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Economic
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Exporting nations often agree to voluntary export restraints in an attempt to
a. increase global welfare.
b. employ more workers in the importing nation.
c. decrease inflation.
d. avoid more-restrictive trade policies.
e. increase inflation.
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An import quota
a. limits the amount of a good that can be imported, thus increasing prices.
b. is the same as a ban on imports.
c. increases the amount of a good imported, thus increasing prices.
d. increases the amount of a good imported, thus decreasing prices.
e. limits the amount of a good that can be imported, thus decreasing prices.
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In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber exported to the United States. This is an example of a(n)a. import quota. b. export subsidy. c. voluntary quota.d. protective tariff.e. revenue tariff.
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An example of a voluntary quota is
a. Venezuela charging an additional 20 percent tax on imported oil from Iran.
b. a decision by the United Kingdom to limit Malaysian shoe imports to 250,000 per year.
c. South Korean electronics manufacturers agreeing to limit exports to New Zealand.
d. France charging an additional 10 percent tax on imports of Vietnamese clothing.
e. a decision by the United States to limit South Korean television imports to 100,000 per year.
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The United States has placed a limit on the amount of oil that can be imported. This is an example of a(n)a. import quota. b. tariff. c. voluntary export restraint.d. import subsidy.e. export subsidy.
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An example of a nonvoluntary import quota is
a. Japanese automobile manufacturers agreeing to limit exports to the United States.
b. a decision by the United States to limit South Korean television imports to 100,000 per year.
c. France charging an additional 10 percent tax on imports of Vietnamese clothing.
d. a decision by Saudi Arabia to reduce oil exports to India by 100,000 barrels.
e. Chinese toy manufacturers agreeing to reduce exports to the United States.
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The United States feels that it has become too dependent on oil from Saudi Arabia, so it places a limit on the amount of oil that is imported from Saudi Arabia. This is an example of a(n)a. nontariff trade barrier. b. quota. c. tariff.d. export subsidy.e. import subsidy.
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An agreement by one country to limit the volume of exports to another country is known as a(n)a. quota. b. tariff. c. voluntary quota.d. import subsidy.e. export subsidy.
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Limits on the quantity or total value of specific products imported to a nation area. import quotas. b. protective tariffs. c. nontariff barriers.d. export subsidies.e. export quotas.
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The following graph depicts the market for a particular good in Dorne. Dorne was importing the good under free trade and then decided to impose a tariff. Use the graph to answer the following questions: A quotaa. imposes a tax on goods entering the country.b. limits the quantity of goods leaving the country.c. subsidizes the production of goods leaving the country.d. limits the quantity of goods entering the country.e. is a tax on imports.
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SHORT ANSWER1. Consider a country that is open to trade. Although the country imports and exports goods and services from more than 200 different nations, the bulk of its imports and exports tend to come from the same eight nations. Identify some possible reasons why this country obtains the majority of its imports and exports from only eight different nations as opposed to having the imports and exports more evenly split across the 200 different nations that it conducts trade with.
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A possible reason a nation might impose a restrictive policy such as a tariff is toa. help domestic firms increase market share relative to their foreign competition.b. increase the welfare of domestic consumers.c. increase the level of imports.d. encourage specialization in the good in which the nation has a comparative advantage.e. give consumers more foreign-made options.
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When a country decides to impose a tariff on a good they are already importing, we can expect the ________ to decrease and the price of the good to ________.a. supply; increase b. supply; decrease c. demand; decreased. demand; increasee. supply and demand; decrease
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Country A decides to sign a trade agreement with Country B. Suppose Country B specializes in producing electronics. We can expect the quantity of electronics imported from Country B to ________ and the price of electronics in Country A to ________.a. increase; increase b. increase; remain unchanged c. increase; decreased. decrease; decreasee. decrease; increase
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The following graph depicts the market for shoes in a particular country. Use the graph to answer the following questions:When a country decides to begin importing a good that they already produce domestically, then there will be an increase in ________ and the market price will ________.a. supply; increase b. supply; decrease c. demand; decreased. demand; increasee. supply and demand; decrease
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A limit imposed on the volume of total imports of a particular good is known as a(n)a. quota. b. tariff. c. voluntary quota.d. import subsidy.e. export subsidy.
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Assume there is a 35 percent tariff on bananas imported into the United States. Also, assume that the market competition is at its beginning and the law of one price is not in effect. If the domestic market price of Hawaiian bananas is $1.00 per bunch, imported bananas will sell for ________ per bunch.a. $0.35 b. $0.65 c. $1.00d. $1.35e. $1.65
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An example of a tariff is
a. Japanese automobile manufacturers agreeing to limit exports to the United States.
b. a decision by the United States to limit South Korean television imports to 100,000 per year.
c. France charging an additional 10 percent tax on imports of Vietnamese clothing.
d. a decision by Saudi Arabia to reduce oil exports to India by 100,000 barrels.
e. Chinese toy manufacturers agreeing to reduce exports to the United States.
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There is a 5 percent average tax on imported goods in the United States. This tax is known as a(n)a. income tax. b. sales tax. c. tariff.d. quota.e. importer tax.
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A tariff is a tax imposed on ________ good.a. an imported b. a luxury c. an illegald. the most populare. a domestic
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A tariff
a. is a strict enforcement of health laws.
b. is a voluntary agreement between two countries to limit exports.
c. is a tax on imports.
d. is a limit on the quantity of a good that can be imported into a country.
e. subsidizes the production of goods leaving the country.
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A tax on imports is known as a(n)a. import subsidy. b. nontariff trade barrier. c. tariff.d. voluntary quota.e. quota.
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Bans on imports, import quotas, voluntary quotas, and tariffs on goods
a. sometimes increase equilibrium quantities, but not prices.
b. increase equilibrium quantities, but decrease prices.
c. increase equilibrium quantity and prices.
d. decrease equilibrium quantity and prices.
e. decrease equilibrium quantities, but increase prices.
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The World Trade Organization (WTO):
a. is an ecoterrorist group.
b. advocates for protection of domestic industries against cheap imports.
c. enforces international trade agreements.
d. protects consumers against exploitation by large multinational corporations.
e. protects workers against exploitation by large multinational corporations.
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The North American Free Trade Agreement (NAFTA) was intended to increase U.S. trade with which other countries?a. Canada and Russia b. Brazil and Mexico c. Canada, Brazil, and Mexicod. Brazil and Panamae. Mexico and Canada
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The members of NAFTA are the United States, Canada, anda. Japan. b. France. c. Mexico.d. Chile.e. the United Kingdom.
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Which of the following groups of countries are members of NAFTA?
a. United States, Canada, and Mexico
b. United States, France, and Germany
c. United States, Japan, and Mexico
d. United States, Canada, and Chile
e. Japan, Canada, and Mexico
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When a smaller country with fewer resources specializes its production and gains access to larger, international markets, this can createa. a smaller distribution network. b. increased per-unit costs. c. decreased sales.d. economies of scale.e. inefficiencies.
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While comparative advantage is the biggest reason many nations engage in trade, two other important reasons are
a. economies of scale and increased competition.
b. economies of scale and decreased competition.
c. increased competition and increased production costs.
d. increased production costs and access to smaller markets.
e. decreased competition and access to smaller markets.
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International trade and the associated increase in international competition has forced American businesses toa. raise production costs. b. improve productivity. c. be less efficient.d. redistribute income to workers.e. reduce productivity.
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Countries engaged in international trade to specialize in production based ona. relative levels of GDP.b. comparative advantage.c. relative exchange rates.d. relative inflation rates.e. relative unemployement rates.
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Based on the scenario, which of the following is true?
a. Drew has an absolute advantage in producing baseballs, but not golf balls.
b. Drew has an absolute advantage in producing golf balls, but not baseballs.
c. Drew has an absolute advantage in producing both goods.
d. Drew has an absolute advantage in producing neither good.
e. Raven has a comparative advantage in producing both goods.
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Use the following scenario to answer the following questions:Raven and Drew produce baseballs and golf balls. Raven can produce six baseballs per hour or four golf balls per hour. Drew can produce three baseballs per hour or one golf ball per hour.Based on the scenario, which of the following is true?a. Raven has both an absolute and a comparative advantage in baseball production.b. Raven has both an absolute and a comparative advantage in golf ball production.c. Raven has neither an absolute nor a comparative advantage in baseball production.d. Raven has neither an absolute nor a comparative advantage in golf ball production.e. Drew has both an absolute and a comparative advantage in baseball production.
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SHORT ANSWER1. Winona would like to start her own country with the goal of having people live longer than any other place in the world. What would be the argument against achieving this goal by simply spending more money on medical care?
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Regardless of the mechanism, the shortage of human organs is addressed bya. a lottery system. b. rationing. c. greatest need.d. black markets.e. legislation.
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The ________ makes it illegal to sell organs in the United States.
a. Affordable Care Act
b. Donor Protection Act
c. Organ Theft Prevention Initiative
d. National Organ Transplant Act
e. Health Care Umbrella Act
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The legal supply of organs in the United States is ________, producing a ________ of those available.
a. increasing; surplus
b. decreasing; shortage
c. fixed; surplus
d. fixed; shortage
e. upward-sloping; constant quantity
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Canadas healthcare system is an example of a/an ________, a market condition in which there is a single buyer.a. monopsony b. monopoly c. oligopolyd. uniconsumptore. narrow demand
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The government covers the cost of providing most health care, and citizens pay their share through taxes in a(n)
a. government-subsidized private insurance system.
b. single-payer system.
c. intermediary system.
d. voucher system.
e. risk-deferred scheme.
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How do malpractice lawsuits affect the supply curve for doctors?
a. They cause a shift to the left.
b. They cause a shift to the right.
c. Lawsuits result in a movement along the curve.
d. The supply curve experiences a change in slope.
e. Malpractice lawsuits have no effect on the supply curve.
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Generally, as the copayment amount for a doctors appointment ________, the number of office visits ________.a. increases; increases b. decreases; decreases c. increases; decreasesd. increases; stays constante. decreases; stays constant
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How can healthcare demand best be characterized in recent years?
a. It has stayed relatively constant.
b. It has grown.
c. It has reduced.
d. The Great Recession cooled demand slightly.
e. Worldwide pandemics have greatly increased demand.
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The chapter references a 2002 RAND Corporation study that determined -0.17 as the average price elasticity coefficient for health care. What can generally be said about this figure?
a. As health care increases in price, it results in nearly a one-for-one reduction in consumption.
b. As health care increases in price, it results in only a very minor reduction in consumption.
c. As health care decreases in price, it results in nearly a one-for-one increase in consumption.
d. As health care decreases in price, it results in a large increase in consumption.
e. Since the coefficient is negative, it means there is no causal relationship between price and consumption.
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Which is NOT an example of a principal-agent problem?
a. A union president makes a move to expand membership and strengthen his support, even though it compromises representation of current members.
b. Gwendolyn is visiting an unfamiliar city and takes a taxi to travel between destinations. The cab driver takes inefficient routes in order to increase her fare.
c. A U.S. representative gets legislation passed in order to fund a road project in her home district, despite opposition from nearly half of her colleagues.
d. Employees at a restaurant loaf around when the manager leaves for a few hours to purchase supplies.
e. An instructor carelessly grades an important exam in order to have more free time on the weekend.
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Service-rating sites like Angies List are an attempt to reduce the incidence of ________ for the consumer.a. moral hazard b. the principal-agent problem c. medical malpracticed. selective consequencee. adverse selection
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Harrison brings his car into a service center for its regular maintenance. After an inspection of the vehicle, a mechanic informs him that the car is in need of extensive and costly repairs. Harrison knows very little about cars, so he is not able to personally validate the mechanics claims. This is an example ofa. moral hazard. b. misdirected incentives. c. asymmetric information.d. demand-cost chasm.e. ad hominem fallacy.
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Which is an unintended consequence of government caps on Medicare and Medicaid reimbursements?
a. Patients in these programs pay significantly more out-of-pocket than do insurance enrollees.
b. It forces physicians and medical centers to raise prices for other procedures that are not covered by these programs.
c. The price ceiling on medical procedures spills over to patients who are not program participants, enabling them to unconsciously reap the benefits of government price controls.
d. The supply of health care increases, lowering prices for most consumers in the market.
e. Since healthcare demand is very inelastic, the government price ceiling becomes nonbinding.