Exam 34: International Trade

A quota raises the price of the product on which the quota has been placed,decreases consumers' surplus,increases producers' surplus,and generates tariff revenue for the government.

Exhibit 34-2 -Refer to Exhibit 34-2.The U.S.demand and supply for a good are shown.Under a policy of free trade,the world price is P_W.At this price,consumers' surplus equals the area of

In contrast to a tariff,a quota does not

"New industries need to be protected or they won't have the opportunity to grow up." This is a statement of the __________ argument for trade restrictions.

If there is no comparative advantage in the production of either of the two goods produced by countries 1 and 2,then

Exhibit 34-11 -Refer to Exhibit 34-11.P_W is the price that exists in the market before a tariff is imposed and P_W ? T is the price that exists in the market after a tariff is imposed.The tariff results in a net loss to society equal to area(s)

Exhibit 34-8 -Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).Consumers' surplus is equal to the area __________ while producers' surplus is equal to the area __________.

The national defense argument for trade protectionism holds that

Exhibit 34-11 -Refer to Exhibit 34-11.A tariff raises the price in the market from P_W to P_W ? T.As a result,U.S.domestic sales rise from __________.

Producers' surplus is

Exhibit 34-9 -Refer to Exhibit 34-9.Which of the following statements is true?

Exhibit 34-4 -Refer to Exhibit 34-4.The opportunity cost of one unit of good B is __________ for country 1 and __________ for country 2.

The answer is: "The difference between the price buyers pay for a good and the maximum or highest price they would have paid for the good." This is the definition for

Dumping occurs when a firm sells goods abroad at a price below their cost and below the price charged in their domestic market.

The answer is: "A tax on imports." What is the question?

International trade policies are largely advocated,argued,and lobbied for based more on their distributional effects than on their aggregate or overall effects.What does this imply?

Exhibit 34-11 -Refer to Exhibit 34-11.P_W is the price that exists in the market before a tariff is imposed and P_W ? T is the price that exists in the market after a tariff is imposed.Tariff revenues equal the area

Which of the following is false?

Exhibit 34-7 -Refer to Exhibit 34-7.The world price of X is $15.Under a policy of free trade,the U.S.production of X would be

The difference between the highest amount a buyer would be willing to pay for a good and the amount she actually pays for it is