Question 1

A Canadian tariff imposed on items that can be produced more cheaply abroad

Accepted Answer

A) benefits Canadians by making these goods cheaper. 
B) makes the goods more expensive in foreign markets. 
C) creates a deadweight loss. 
D) equalizes the cost of production between Canada and foreign producers. 
E) increases total surplus. 
A) benefits Canadians by making these goods cheaper. 
B) makes the goods more expensive in foreign markets. 
C) creates a deadweight loss. 
D) equalizes the cost of production between Canada and foreign producers. 
E) increases total surplus.

Question 2

A country moves from a situation of no trade to a situation where a good is imported.In the importing country the price of the good ________,and producer surplus ________.

Accepted Answer

A) rises;increases 
B) falls;decreases 
C) does not change;increases 
D) does not change;decreases 
E) rises;decreases 
A) rises;increases 
B) falls;decreases 
C) does not change;increases 
D) does not change;decreases 
E) rises;decreases

Question 3

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed on a ________ number of people.

Accepted Answer

A) small;large 
B) large;small 
C) small;small 
D) large;large 
E) We can't determine the relative number of people who benefit and lose from free trade. 
A) small;large 
B) large;small 
C) small;small 
D) large;large 
E) We can't determine the relative number of people who benefit and lose from free trade.

Question 4

When Canada exports a good,Canada's consumer surplus ________ and Canada's total surplus ________.

Accepted Answer

A) increases;increases 
B) increases;decreases 
C) increases;increases or decreases depending on the change in producer surplus 
D) decreases;decreases 
E) decreases and Canada's producer surplus increases;does not change 
A) increases;increases 
B) increases;decreases 
C) increases;increases or decreases depending on the change in producer surplus 
D) decreases;decreases 
E) decreases and Canada's producer surplus increases;does not change

Question 5

Use the information below to answer the following questions.
Fact 7.3.1
Before 1995,trade between Canada and Mexico was subject to tariffs.In 1995,Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed.
-Refer to Fact 7.3.1.The quantity of Canadian exports to Mexico has ________,and the Canadian government's tariff revenue from trade with Mexico has ________.

Accepted Answer

A) not changed;not changed 
B) decreased;increased 
C) increased;increased 
D) increased;decreased 
E) increased;not changed 
A) not changed;not changed 
B) decreased;increased 
C) increased;increased 
D) increased;decreased 
E) increased;not changed

Question 6

Prior to international trade,if the price of good X is lower in country A than in country B,

Accepted Answer

A) country B has an absolute advantage in the production of good X. 
B) country B has a comparative advantage in the production of good X. 
C) country A has an absolute advantage in the production of good X. 
D) country A has a comparative advantage in the production of good X. 
E) country B should stop producing good X. 
A) country B has an absolute advantage in the production of good X. 
B) country B has a comparative advantage in the production of good X. 
C) country A has an absolute advantage in the production of good X. 
D) country A has a comparative advantage in the production of good X. 
E) country B should stop producing good X.

Question 7

Refer to the figure below to answer the following questions.   Figure 7.3.1
The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
-Refer to Figure 7.3.1.The Canadian government's revenue from the tariff is ________.

Accepted Answer

A) $64 million 
B) $32 million 
C) $128 million 
D) $48 million 
E) $480 million 
A) $64 million 
B) $32 million 
C) $128 million 
D) $48 million 
E) $480 million

Question 8

Which of the following statements about Canada's international trade in 2016 is correct?

Accepted Answer

A) The value of Canada's imports exceeded the value of Canada's exports. 
B) The value of Canada's exports was about 45 percent of the value of total expenditure in Canada. 
C) Canada imported only goods. 
D) Canada was the world's second largest trader. 
E) Canada exported only goods. 
A) The value of Canada's imports exceeded the value of Canada's exports. 
B) The value of Canada's exports was about 45 percent of the value of total expenditure in Canada. 
C) Canada imported only goods. 
D) Canada was the world's second largest trader. 
E) Canada exported only goods.

Question 9

Import quotas

Accepted Answer

A) are the same as tariffs. 
B) are not used by Canada. 
C) set the minimum percentage of the value of a product that must consist of imported components. 
D) benefit society. 
E) set the maximum number of units of a good that can be imported in a given time period. 
A) are the same as tariffs. 
B) are not used by Canada. 
C) set the minimum percentage of the value of a product that must consist of imported components. 
D) benefit society. 
E) set the maximum number of units of a good that can be imported in a given time period.

Question 10

A tariff is a tax that is imposed by the ________ country when an ________ good crosses its international boundary.

Accepted Answer

A) exporting;imported 
B) importing;exported 
C) exporting;exported 
D) importing;imported 
E) importing or exporting;imported or exported 
A) exporting;imported 
B) importing;exported 
C) exporting;exported 
D) importing;imported 
E) importing or exporting;imported or exported

Question 11

Reducing a tariff ________ the domestic production of the good and ________ the total domestic consumption of the good.

Accepted Answer

A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;increases 
A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;increases

Question 12

Refer to the figure below to answer the following questions.   Figure 7.3.1
The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
-Refer to Figure 7.3.1.Canadian consumers' ________ from the tariff is ________.

Accepted Answer

A) loss;$176 million 
B) gain;$64 million 
C) loss;$80 million 
D) gain;$128 million 
E) gain;$176 million 
A) loss;$176 million 
B) gain;$64 million 
C) loss;$80 million 
D) gain;$128 million 
E) gain;$176 million

Question 13

Refer to the table below to answer the following questions.
Table 7.1.1
Glazeland's Doughnut Market
  
-Table 7.1.1 shows Glazeland's doughnut market before international trade.Glazeland opens up to international trade.If the world price is $0.40 a doughnut then Glazeland will produce ________ doughnuts and will ________ doughnuts.

Accepted Answer

A) 3 million;import 3 million 
B) 3 million;export 3 million 
C) 4 million;import 1 million 
D) 4 million;export 1 million 
E) 6 million;export 3 million 
A) 3 million;import 3 million 
B) 3 million;export 3 million 
C) 4 million;import 1 million 
D) 4 million;export 1 million 
E) 6 million;export 3 million

Question 14

Tariffs

Accepted Answer

A) generate revenue for consumers. 
B) generate revenue for the government. 
C) encourage domestic consumers to buy more imports. 
D) encourage domestic producers to produce less. 
E) lower prices for consumers. 
A) generate revenue for consumers. 
B) generate revenue for the government. 
C) encourage domestic consumers to buy more imports. 
D) encourage domestic producers to produce less. 
E) lower prices for consumers.

Question 15

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

Accepted Answer

A) avoiding import quotas. 
B) exploiting its absolute advantage. 
C) dumping. 
D) engaging in learning-by-doing. 
E) exploiting its comparative advantage. 
A) avoiding import quotas. 
B) exploiting its absolute advantage. 
C) dumping. 
D) engaging in learning-by-doing. 
E) exploiting its comparative advantage.

Question 16

Which of the following is an explanation for the existence of trade restrictions?

Accepted Answer

A) tariffs generate revenue for the government 
B) rent seeking 
C) inefficient quotas 
D) both A and B 
E) both A and C 
A) tariffs generate revenue for the government 
B) rent seeking 
C) inefficient quotas 
D) both A and B 
E) both A and C

Question 17

Refer to the table below to answer the following question.
Table 7.1.3
  
-Table 7.1.3 shows a country's demand and supply schedules for a good.At what world price would the country export this good?

Accepted Answer

A) at only $8 a unit 
B) any price below $8 
C) a price of $6 a unit 
D) a price of $4 a unit 
E) any price above $8 a unit 
A) at only $8 a unit 
B) any price below $8 
C) a price of $6 a unit 
D) a price of $4 a unit 
E) any price above $8 a unit

Question 18

Canada exports athletic coaching services and imports computer tech support.The price of athletic coaching services in Canada is ________ with international trade than without international trade.As a result of trade in athletic coaching services,the Canadian producer surplus from athletic coaching services ________.

Accepted Answer

A) higher;does not change 
B) lower;increases 
C) lower;decreases 
D) higher;increases 
E) higher;decreases 
A) higher;does not change 
B) lower;increases 
C) lower;decreases 
D) higher;increases 
E) higher;decreases

Question 19

An import quota directly restricts ________ and are designed to protect domestic ________.

Accepted Answer

A) exports;consumers only 
B) exports;producers only 
C) imports;consumers only 
D) imports;producers only 
E) imports;producers and consumers 
A) exports;consumers only 
B) exports;producers only 
C) imports;consumers only 
D) imports;producers only 
E) imports;producers and consumers

Question 20

A tariff is imposed on a good.This ________ producer surplus and ________ total surplus in importing country.

Accepted Answer

A) increases;does not change 
B) increases;increases 
C) decreases;increases 
D) decreases;decreases 
E) increases;decreases 
A) increases;does not change 
B) increases;increases 
C) decreases;increases 
D) decreases;decreases 
E) increases;decreases

A Canadian tariff imposed on items that can be produced more cheaply abroad

A country moves from a situation of no trade to a situation where a good is imported.In the importing country the price of the good ,and producer surplus .

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed on a number of people.

When Canada exports a good,Canada's consumer surplus and Canada's total surplus .

Prior to international trade,if the price of good X is lower in country A than in country B,

Which of the following statements about Canada's international trade in 2016 is correct?

Import quotas

A tariff is a tax that is imposed by the country when an good crosses its international boundary.

Reducing a tariff the domestic production of the good and the total domestic consumption of the good.

Tariffs

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

Which of the following is an explanation for the existence of trade restrictions?

Refer to the table below to answer the following question. Table 7.1.3 -Table 7.1.3 shows a country's demand and supply schedules for a good.At what world price would the country export this good?

An import quota directly restricts and are designed to protect domestic .

A tariff is imposed on a good.This producer surplus and total surplus in importing country.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 7: Global Markets in Action

A Canadian tariff imposed on items that can be produced more cheaply abroad

A country moves from a situation of no trade to a situation where a good is imported.In the importing country the price of the good ________,and producer surplus ________.

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed on a ________ number of people.

When Canada exports a good,Canada's consumer surplus ________ and Canada's total surplus ________.

Prior to international trade,if the price of good X is lower in country A than in country B,

Which of the following statements about Canada's international trade in 2016 is correct?

Import quotas

A tariff is a tax that is imposed by the ________ country when an ________ good crosses its international boundary.

Reducing a tariff ________ the domestic production of the good and ________ the total domestic consumption of the good.

Tariffs

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

Which of the following is an explanation for the existence of trade restrictions?

Refer to the table below to answer the following question. Table 7.1.3 -Table 7.1.3 shows a country's demand and supply schedules for a good.At what world price would the country export this good?

An import quota directly restricts ________ and are designed to protect domestic ________.

A tariff is imposed on a good.This ________ producer surplus and ________ total surplus in importing country.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

A country moves from a situation of no trade to a situation where a good is imported.In the importing country the price of the good ,and producer surplus .

The gains from free trade are enjoyed by a number of people and the costs of free trade are imposed on a number of people.

When Canada exports a good,Canada's consumer surplus and Canada's total surplus .

A tariff is a tax that is imposed by the country when an good crosses its international boundary.

Reducing a tariff the domestic production of the good and the total domestic consumption of the good.

An import quota directly restricts and are designed to protect domestic .

A tariff is imposed on a good.This producer surplus and total surplus in importing country.