Quotas are a greater threat to competition than tariffs because
A. Tariffs do not reduce the quantity sold and quotas do.
B. Quotas preclude additional imports at any price.
C. Quotas allow imports but only at a higher price.
D. Tariffs are voluntary and quotas are not.
Answer: B
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As a result of a new Japan-United States Free Trade Agreement (JUSFTA), the United States has shifted to free trade with Japan. Assume that the two major products are A-goods (agricultural products), which are relatively land-intensive, and M-goods (manufactured products), which are relatively skilled-labor intensive. According to the Stolper-Samuelson theorem, how will this shift affect the real returns to landowners in Japan and the real returns to landowners in the United States? Also explain the impact on the real wage of skilled labor in Japan and the real wage of skilled labor in the United States.
What will be an ideal response?
Consider the monopoly in the figure below with price regulated at $20 per unit. The regulated price will result in a: 
A. surplus of 18 units. B. shortage of 18 units. C. shortage of 3 units. D. surplus of 3 units.
The ability to produce a good or service at a lower opportunity cost than other producers is
A. intellectual property. B. the quota system. C. absolute advantage. D. comparative advantage.
Answer the following statements true (T) or false (F)
1. In terms of trade volume, China is the largest trading partner of the United States. 2. In 2011, the United States was the largest exporter in the world. 3. Among the principal exports of the United States are agricultural products. 4. The United States can be classified as an "open" economy in that foreign trade accounts for more than 50% of its GDP. 5. The U.S. has a sizable trade surplus in services.