Question 1

As a result of a quota,both consumers' surplus and producers' surplus fall.

Accepted Answer

A) True 
 B)False

Question 2

The answer is: "A reduction in consumers' surplus." What is the question?

Accepted Answer

A)  What is an effect of a rise in price? 
B)  What is an effect of a tariff? 
C)  What is an effect of a quota? 
D)  a and b 
E)  a, b, and c 
A)  What is an effect of a rise in price? 
B)  What is an effect of a tariff? 
C)  What is an effect of a quota? 
D)  a and b 
E)  a, b, and c

Question 3

Two major exports for the United States are

Accepted Answer

A)  clothing and office machines. 
B)  soybeans and scientific instruments. 
C)  footwear and fish. 
D)  coffee and diamonds. 
E)  none of the above 
A)  clothing and office machines. 
B)  soybeans and scientific instruments. 
C)  footwear and fish. 
D)  coffee and diamonds. 
E)  none of the above

Question 4

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).The removal of the $100 per ton tariff would cause a(n)__________ in imports of __________ million tons.

Accepted Answer

A)  increase; 5 
B)  increase; 10 
C)  increase; 15 
D)  decrease; 5 
E)  decrease; 10 
A)  increase; 5 
B)  increase; 10 
C)  increase; 15 
D)  decrease; 5 
E)  decrease; 10

Question 5

Comparative advantage is the ability to produce a good at a lower opportunity cost than others.

Accepted Answer

A) True 
 B)False

Question 6

A quota on imported avocadoes ______________ the price of avocadoes,_____________ consumers' surplus for avocado buyers,_______________ producers' surplus of avocado growers and __________________ tariff revenue.Because the loss to _____________ is more than the gain to ___________________,there is a net loss to society.

Accepted Answer

A)  raises; increases; decreases; generates; producers; consumers and government 
B)  lowers; increases; decreases; does not generate; producers; consumers 
C)  raises; increases; decreases; does not generate;consumers; producers and importers 
D)  raises; decreases; increases; generates; consumers; producers and government 
A)  raises; increases; decreases; generates; producers; consumers and government 
B)  lowers; increases; decreases; does not generate; producers; consumers 
C)  raises; increases; decreases; does not generate;consumers; producers and importers 
D)  raises; decreases; increases; generates; consumers; producers and government

Question 7

Which of the following is false?

Accepted Answer

A)  Specialization and trade allow a country's inhabitants to consume at a level beyond its production possibilities frontier. 
B)  Some of the goods the U.S. exports include cars, coal, and wheat. 
C)  Some of the goods the U.S. imports include cars, oil, and coffee. 
D)  A country has a comparative advantage in producing that good it can produce at lower opportunity cost than another country. 
E)  none of the above 
A)  Specialization and trade allow a country's inhabitants to consume at a level beyond its production possibilities frontier. 
B)  Some of the goods the U.S. exports include cars, coal, and wheat. 
C)  Some of the goods the U.S. imports include cars, oil, and coffee. 
D)  A country has a comparative advantage in producing that good it can produce at lower opportunity cost than another country. 
E)  none of the above

Question 8

Countries tend to specialize in the production of goods in which they have a comparative advantage because

Accepted Answer

A)  government officials calculate opportunity costs and suggest to people what they ought to produce. 
B)  people want to make a profit. 
C)  the Economic Development Office of the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
D)  the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
E)  none of the above 
A)  government officials calculate opportunity costs and suggest to people what they ought to produce. 
B)  people want to make a profit. 
C)  the Economic Development Office of the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
D)  the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. 
E)  none of the above

Question 9

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).The government collects tariff revenues on sugar imports in the amount of __________ million.

Accepted Answer

A)  $500 
B)  $1,000 
C)  $1,500 
D)  $2,000 
E)  none of the above 
A)  $500 
B)  $1,000 
C)  $1,500 
D)  $2,000 
E)  none of the above

Question 10

Exhibit 34-7
  
-Refer to Exhibit 34-7. The world price of X is $15. Under a policy of free trade,U.S.consumers will import ___________ units of X from abroad.

Accepted Answer

A)  50 
B)  45 
C)  40 
D)  30 
A)  50 
B)  45 
C)  40 
D)  30

Question 11

With a quota,the __________ is greater than the __________.

Accepted Answer

A)  loss in producers' surplus; gain in consumers' surplus 
B)  loss in consumers' surplus; loss in producers' surplus plus higher total revenues on the imported goods 
C)  loss in producers' surplus plus higher total revenues on the imported goods; consumers' surplus 
D)  tax; revenue 
E)  quota-determined price; quota-determined output 
A)  loss in producers' surplus; gain in consumers' surplus 
B)  loss in consumers' surplus; loss in producers' surplus plus higher total revenues on the imported goods 
C)  loss in producers' surplus plus higher total revenues on the imported goods; consumers' surplus 
D)  tax; revenue 
E)  quota-determined price; quota-determined output

Question 12

Which of the following founders of the United States used the infant-industry argument to support trade restrictions?

Accepted Answer

A)  Thomas Jefferson 
B)  Alexander Hamilton 
C)  James Madison 
D)  John Jay 
A)  Thomas Jefferson 
B)  Alexander Hamilton 
C)  James Madison 
D)  John Jay

Question 13

Major U.S.exports include automobiles and aircraft.

Accepted Answer

A) True 
 B)False

Question 14

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 PW.At this price,producers' surplus equals the area of

Accepted Answer

A)  PNBDPW. 
B)  DBC. 
C)  PWCBPN. 
D)  PWDE. 
A)  PNBDPW. 
B)  DBC. 
C)  PWCBPN. 
D)  PWDE.

Question 15

Exhibit 34-3
  
-Refer to Exhibit 34-3.The world price is PW.At this price,Americans purchase Q1 from U.S.producers and import the quantity __________ from foreign producers.

Accepted Answer

A)  Q4 - Q1 
B)  Q2 - Q1 
C)  Q2 - Q4 
D)  Q2 - Q3 
A)  Q4 - Q1 
B)  Q2 - Q1 
C)  Q2 - Q4 
D)  Q2 - Q3

Question 16

Exhibit 34-10
  
-Refer to Exhibit 34-10. Who has the comparative advantage when it comes to cleaning the house?

Accepted Answer

A)  Danielle 
B)  Jason 
C)  neither Jason nor Danielle 
D)  both Danielle and Jason 
A)  Danielle 
B)  Jason 
C)  neither Jason nor Danielle 
D)  both Danielle and Jason

Question 17

Exhibit 34-6
  
-Refer to Exhibit 34-6.Which of the following terms of trade would both countries agree on?

Accepted Answer

A)  1 unit of wine = 2.5 units of cheese 
B)  1 unit of wine = 1.5 units of cheese 
C)  2.5 units of wine = 1 unit of cheese 
D)  1.5 units of wine = 1 unit of cheese 
E)  none of the above 
A)  1 unit of wine = 2.5 units of cheese 
B)  1 unit of wine = 1.5 units of cheese 
C)  2.5 units of wine = 1 unit of cheese 
D)  1.5 units of wine = 1 unit of cheese 
E)  none of the above

Question 18

Exhibit 34-1
  
-Refer to Exhibit 34-1.The opportunity cost of one unit of Y in Country A is

Accepted Answer

A)  1 unit of X. 
B)  0.75 units of X. 
C)  2 units of X. 
D)  10 units of X. 
A)  1 unit of X. 
B)  0.75 units of X. 
C)  2 units of X. 
D)  10 units of X.

Question 19

Exhibit 34-7
  
-Refer to Exhibit 34-7. Assume that the current price of X is $25 (which includes a $10 tariff on imports of product X). Americans purchase ______ units of X from U.S.producers and import _______ units of X from abroad.

Accepted Answer

A)  0; 50 
B)  20; 25 
C)  10; 30 
D)  10; 40 
A)  0; 50 
B)  20; 25 
C)  10; 30 
D)  10; 40

Question 20

Exhibit 34-6
  
-Refer to Exhibit 34-6.The opportunity cost of 1 unit of cheese in terms of units of wine is __________ for country A.

Accepted Answer

A)  1/2 
B)  2 
C)  10 
D)  5 
E)  none of the above 
A)  1/2 
B)  2 
C)  10 
D)  5 
E)  none of the above

Exam 34: International Trade

As a result of a quota,both consumers' surplus and producers' surplus fall.

The answer is: "A reduction in consumers' surplus." What is the question?

Two major exports for the United States are

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).The removal of the $100 per ton tariff would cause a(n)__________ in imports of __________ million tons.

Comparative advantage is the ability to produce a good at a lower opportunity cost than others.

Which of the following is false?

Countries tend to specialize in the production of goods in which they have a comparative advantage because

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).The government collects tariff revenues on sugar imports in the amount of __________ million.

Exhibit 34-7 -Refer to Exhibit 34-7. The world price of X is $15. Under a policy of free trade,U.S.consumers will import ___________ units of X from abroad.

With a quota,the __________ is greater than the __________.

Which of the following founders of the United States used the infant-industry argument to support trade restrictions?

Major U.S.exports include automobiles and aircraft.

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 PW.At this price,producers' surplus equals the area of

Exhibit 34-3 -Refer to Exhibit 34-3.The world price is PW.At this price,Americans purchase Q1 from U.S.producers and import the quantity __________ from foreign producers.

Exhibit 34-10 -Refer to Exhibit 34-10. Who has the comparative advantage when it comes to cleaning the house?

Exhibit 34-6 -Refer to Exhibit 34-6.Which of the following terms of trade would both countries agree on?

Exhibit 34-1 -Refer to Exhibit 34-1.The opportunity cost of one unit of Y in Country A is

Exhibit 34-7 -Refer to Exhibit 34-7. Assume that the current price of X is $25 (which includes a $10 tariff on imports of product X). Americans purchase ______ units of X from U.S.producers and import _______ units of X from abroad.

Exhibit 34-6 -Refer to Exhibit 34-6.The opportunity cost of 1 unit of cheese in terms of units of wine is __________ for country A.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

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).The removal of the $100 per ton tariff would cause a(n) in imports of million tons.

With a quota,the is greater than the .

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,producers' surplus equals the area of

Exhibit 34-3 -Refer to Exhibit 34-3.The world price is P_W.At this price,Americans purchase Q₁ from U.S.producers and import the quantity __________ from foreign producers.

Exhibit 34-7 -Refer to Exhibit 34-7. Assume that the current price of X is $25 (which includes a $10 tariff on imports of product X). Americans purchase units of X from U.S.producers and import _ units of X from abroad.