Question 1

In developing countries, there is more reliance on ________ as opposed to ________ for government revenue.

Accepted Answer

A)  tariffs; tax collection 
B)  quotas; tariffs 
C)  tax collection; tariffs 
D)  tariffs; quotas 
A)  tariffs; tax collection 
B)  quotas; tariffs 
C)  tax collection; tariffs 
D)  tariffs; quotas

Question 2

Currently Belize, a country in Central America, has a small coffee industry but does not export any coffee. Suppose the government of Belize, in order to protect the new coffee industry to enable it to grow into a mature industry that can compete in world markets, places a tariff on the importation of coffee. What is the argument that has been used to support the tariff on coffee?

Accepted Answer

A)  the infant-industry argument 
B)  the dumping argument 
C)  protection of Belize coffee workers 
D)  to prevent rich countries from exploiting developing countries 
A)  the infant-industry argument 
B)  the dumping argument 
C)  protection of Belize coffee workers 
D)  to prevent rich countries from exploiting developing countries

Question 3

During the first 6 months of 2008, the European Union (EU) initiated an anti-dumping case against China for imports of taper candles. What is dumping?

Accepted Answer

A)  when China sells its candles to the EU at a lower price than China's cost of production 
B)  when China does not pay the tariff on the candles 
C)  when China sells its candles to the EU at a lower price than other producers 
D)  when China tries to sell more candles to the EU than is allowed by the import quota 
A)  when China sells its candles to the EU at a lower price than China's cost of production 
B)  when China does not pay the tariff on the candles 
C)  when China sells its candles to the EU at a lower price than other producers 
D)  when China tries to sell more candles to the EU than is allowed by the import quota

Question 4

Give a brief description of the history of tariffs in the United States.

Accepted Answer

Today, U.S. tariffs are low compared to

Question 5

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

Accepted Answer

A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot 
A)  a few; little 
B)  a few; lot 
C)  many; little 
D)  many; lot

Question 6

An import quota is a

Accepted Answer

A)  tariff imposed on goods that are dumped in the country. 
B)  law that prevents ecologically damaging goods from being imported into a country. 
C)  market-imposed balancing factor that keeps prices of imports and exports in equilibrium. 
D)  government-imposed restriction on the quantity of a specific good that can be imported. 
A)  tariff imposed on goods that are dumped in the country. 
B)  law that prevents ecologically damaging goods from being imported into a country. 
C)  market-imposed balancing factor that keeps prices of imports and exports in equilibrium. 
D)  government-imposed restriction on the quantity of a specific good that can be imported.

Question 7

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In the figure above, with international trade American consumers buy ________ million shirts per year.

Accepted Answer

A)  48 
B)  32 
C)  16 
D)  24 
A)  48 
B)  32 
C)  16 
D)  24

Question 8

Which of the statements about the gains from international trade is correct?

Accepted Answer

A)  Everyone gains from international trade. 
B)  Some people gain from international trade and some lose, though overall the gains exceed the losses. 
C)  Some people gain from international trade and some lose; overall the gains exceed the losses. 
D)  Everyone loses from international trade. 
A)  Everyone gains from international trade. 
B)  Some people gain from international trade and some lose, though overall the gains exceed the losses. 
C)  Some people gain from international trade and some lose; overall the gains exceed the losses. 
D)  Everyone loses from international trade.

Question 9

The United States imports cars from Japan. If the United States imposes a tariff on cars imported from Japan,

Accepted Answer

A)  U.S. consumers lose and Japanese producers gain. 
B)  U.S. tariff revenue equals the loss of U.S. consumer surplus. 
C)  U.S. consumers lose and U.S. producers gain. 
D)  U.S. car manufacturers gain revenue equal to the revenue lost by Japanese car manufacturers. 
A)  U.S. consumers lose and Japanese producers gain. 
B)  U.S. tariff revenue equals the loss of U.S. consumer surplus. 
C)  U.S. consumers lose and U.S. producers gain. 
D)  U.S. car manufacturers gain revenue equal to the revenue lost by Japanese car manufacturers.

Question 10

An import quota restricts ________ and is designed to protect domestic ________.

Accepted Answer

A)  exports; consumers 
B)  exports; producers 
C)  imports; consumers 
D)  imports; producers 
A)  exports; consumers 
B)  exports; producers 
C)  imports; consumers 
D)  imports; producers

Question 11

A tariff is imposed on a good. The tariff will ________ the domestic quantity supplied, ________ the domestic quantity demanded, and ________ price in the home country.

Accepted Answer

A)  increase; decrease; increase 
B)  increase; remain unchanged; remain unchanged 
C)  increase; increase; increase 
D)  increase; decrease; decrease 
A)  increase; decrease; increase 
B)  increase; remain unchanged; remain unchanged 
C)  increase; increase; increase 
D)  increase; decrease; decrease

Question 12

Based on the table below, at what world price would the country import the good?

Accepted Answer

A)  a price below $8 
B)  at exactly $8 
C)  a price above $8 
D)  It is impossible to say. 
A)  a price below $8 
B)  at exactly $8 
C)  a price above $8 
D)  It is impossible to say.

Question 13

The fundamental force that drives international trade is

Accepted Answer

A)  absolute advantage. 
B)  importation duties and tariffs. 
C)  export licenses. 
D)  comparative advantage. 
A)  absolute advantage. 
B)  importation duties and tariffs. 
C)  export licenses. 
D)  comparative advantage.

Question 14

During the first 6 months of 2008, the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. What would be a potential consequence of such a trade restriction?

Accepted Answer

A)  The U.S. price of coffee would increase. 
B)  U.S. consumers would drink more coffee. 
C)  The quantity of coffee imported into the United States would increase. 
D)  U.S. consumer surplus from coffee would increase. 
A)  The U.S. price of coffee would increase. 
B)  U.S. consumers would drink more coffee. 
C)  The quantity of coffee imported into the United States would increase. 
D)  U.S. consumer surplus from coffee would increase.

Question 15

The figure shows the market for shirts in the United States, where D is the U.S demand curve and S is the U.S. supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt.
-In the figure above, the deadweight loss from the tariff is ________.

Accepted Answer

A)  $32 million 
B)  $80 million 
C)  $16 million 
D)  zero 
A)  $32 million 
B)  $80 million 
C)  $16 million 
D)  zero

Question 16

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

Accepted Answer

A) True 
 B)False

Question 17

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers?

Accepted Answer

A)  U.S. producer surplus shrinks. 
B)  U.S. consumer surplus increases. 
C)  Total U.S. surplus increases. 
D)  All the above answers are correct. 
A)  U.S. producer surplus shrinks. 
B)  U.S. consumer surplus increases. 
C)  Total U.S. surplus increases. 
D)  All the above answers are correct.

Question 18

Compared to the situation before international trade, after the United States exports a good production in the United States ________ and consumption in the United States ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 19

The figure shows the market for shirts in the United States, where D is the U.S demand curve and S is the U.S. supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt.
-In the figure above, U.S. consumers' ________ from the tariff is ________.

Accepted Answer

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

Question 20

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter.
-In the figure above, international trade ________ total surplus in the United States by ________.

Accepted Answer

A)  increases; $1.92 billion 
B)  decreases; $2.56 billion 
C)  increases; $4.8 billion 
D)  decreases; $3.6 billion 
A)  increases; $1.92 billion 
B)  decreases; $2.56 billion 
C)  increases; $4.8 billion 
D)  decreases; $3.6 billion

Exam 7: Global Markets in Action

In developing countries, there is more reliance on ________ as opposed to ________ for government revenue.

During the first 6 months of 2008, the European Union (EU) initiated an anti-dumping case against China for imports of taper candles. What is dumping?

Give a brief description of the history of tariffs in the United States.

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

An import quota is a

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade American consumers buy ________ million shirts per year.

Which of the statements about the gains from international trade is correct?

The United States imports cars from Japan. If the United States imposes a tariff on cars imported from Japan,

An import quota restricts ________ and is designed to protect domestic ________.

A tariff is imposed on a good. The tariff will ________ the domestic quantity supplied, ________ the domestic quantity demanded, and ________ price in the home country.

Based on the table below, at what world price would the country import the good?

The fundamental force that drives international trade is

During the first 6 months of 2008, the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. What would be a potential consequence of such a trade restriction?

The figure shows the market for shirts in the United States, where D is the U.S demand curve and S is the U.S. supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt. -In the figure above, the deadweight loss from the tariff is ________.

Most economists would agree that "saving jobs" is a valid reason for restricting trade.

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers?

Compared to the situation before international trade, after the United States exports a good production in the United States ________ and consumption in the United States ________.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

In developing countries, there is more reliance on as opposed to for government revenue.

Usually the imposition of trade barriers affecting a particular good benefits people domestically, each of whom gains a .

An import quota restricts and is designed to protect domestic .

A tariff is imposed on a good. The tariff will the domestic quantity supplied, the domestic quantity demanded, and price in the home country.

Compared to the situation before international trade, after the United States exports a good production in the United States and consumption in the United States .