Since 1978, the volume of Canadian international trade as a percentage of total output has ___________________.

fallen by half
steadily decreased
remained constant
increased

The country of Alpha can produce 2 packets of cookies at a cost of 4 boxes of chocolates. Beta can produce 2 boxes of chocolates at a cost of 2 packets of cookies.

Beta has a comparative advantage in both chocolates and cookies.
Alpha has a comparative advantage in producing chocolates.
Alpha has a comparative advantage in producing cookies.
Beta has a comparative advantage in producing chocolates.

The country of Alpha can produce 2 packets of cookies at a cost of 4 boxes of chocolates. Beta can produce 2 boxes of chocolates at a cost of 2 packets of cookies.

Both countries will benefit from trade.
Only Beta will benefit from trade.
Only Alpha will benefit from trade.
Neither country will benefit from trade.

Two examples of nontariff barriers are ____________________.

import and export taxes
quotas and voluntary export restraints
voluntary export restraints and import taxes
quotas and import taxes

The proposition that protection is necessary to allow an infant industry to grow into a mature industry so that it can compete in world markets is the ______________________.

infant-industry argument
growth proposition
infant-maturity argument
new industry proposition

Dumping occurs when a foreign firm _____________________.

pollutes international waters
sells its output below its cost of production
disposes of waste material internationally
sells inferior output to foreigners

A tariff _______ the quantity of the good imported and _______ the domestic price of the imported good.

decreases; increases
increases; greatly increases
does not change; increases
decreases; decreases

The argument that protection ______________________.

penalizes poor environmental standards is true
saves jobs is flawed
allows us to compete with cheap foreign wages is true
is necessary for infant industries is true

Under NAFTA, most barriers to international trade between the United States, Canada, and Mexico ____________.

will be eliminated by 2009
depend on the exchange rates between the U.S. dollar, the Canadian dollar, and the Mexican peso
were eliminated on January 1, 1994
will be eliminated as soon as Canada stops trading with Cuba

The two key reasons why trade is restricted are __________________.

saving jobs and cultural protection
tariff revenue and rent seeking
tariff revenue and environmental protection
environmental protection and cultural protection

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