Question 1

Raquel,who earns $800 a week,bought a television set and gained $50 consumers' surplus.What price did she pay for the good?

Accepted Answer

A)  $40 
B)  $540 
C)  $160 
D)  $5 
E)  There is not enough information to answer the question. 
A)  $40 
B)  $540 
C)  $160 
D)  $5 
E)  There is not enough information to answer the question.

Question 2

Exhibit 34-9
  
-Refer to Exhibit 34-9.For country Y,the opportunity cost of producing one unit of good A is __________ unit(s)of good B.

Accepted Answer

A)  1.5 
B)  2 
C)  1/2 
D)  2/3 
E)  10 
A)  1.5 
B)  2 
C)  1/2 
D)  2/3 
E)  10

Question 3

The effects of tariffs and quotas are: a(n)__________ in consumers' surplus,and a(n)__________ in producers' surplus.

Accepted Answer

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

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 increase consumers' surplus by an amount equal to area

Accepted Answer

A)  C. 
B)  C + G. 
C)  D + E + F. 
D)  C + D + E + F + G + H. 
E)  none of the above 
A)  C. 
B)  C + G. 
C)  D + E + F. 
D)  C + D + E + F + G + H. 
E)  none of the above

Question 5

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 B.

Accepted Answer

A)  1 
B)  5 
C)  10 
D)  15 
A)  1 
B)  5 
C)  10 
D)  15

Question 6

How do countries know when they have a comparative advantage in the production of a good?

Accepted Answer

A)  Government accountants collect cost data from countries and analyze it to find out which country has a comparative advantage in the production of which good. 
B)  They know as the result of individuals trying to earn profits and buying low and selling high in the process. 
C)  The United Nations Economic Conference Group analyzes cost data from countries and determines which country has a comparative advantage in the production of which good. 
D)  There is not one major way that countries acquire this information. 
A)  Government accountants collect cost data from countries and analyze it to find out which country has a comparative advantage in the production of which good. 
B)  They know as the result of individuals trying to earn profits and buying low and selling high in the process. 
C)  The United Nations Economic Conference Group analyzes cost data from countries and determines which country has a comparative advantage in the production of which good. 
D)  There is not one major way that countries acquire this information.

Question 7

Exhibit 34-6
  
-Refer to Exhibit 34-6.Which of the following is true?

Accepted Answer

A)  Country A has a comparative advantage in both cheese and wine. 
B)  Country B has a comparative advantage in both cheese and wine. 
C)  Country A has a comparative advantage in cheese, and country B has a comparative advantage in wine. 
D)  Country B has a comparative advantage in cheese, and country A has a comparative advantage in wine. 
E)  none of the above 
A)  Country A has a comparative advantage in both cheese and wine. 
B)  Country B has a comparative advantage in both cheese and wine. 
C)  Country A has a comparative advantage in cheese, and country B has a comparative advantage in wine. 
D)  Country B has a comparative advantage in cheese, and country A has a comparative advantage in wine. 
E)  none of the above

Question 8

Exhibit 34-10
  
-Refer to Exhibit 34-10. Danielle's opportunity cost of mowing the lawn is

Accepted Answer

A)  0.50 clean houses. 
B)  2.40 clean houses. 
C)  2.00 clean houses. 
D)  0.60 clean houses. 
A)  0.50 clean houses. 
B)  2.40 clean houses. 
C)  2.00 clean houses. 
D)  0.60 clean houses.

Question 9

Exhibit 34-1
  
-Refer to Exhibit 34-1.If the Country A is to specialize in the production of one of the two goods (and then trade that good with Country B),which good should it be and why? If Country B is to specialize in the production of one of the two goods (and then trade that good to with Country A),which good should it be and why?

Accepted Answer

A)  Good X for Country A because it is the higher opportunity cost producer of good X; good Y for Country B because it is the higher opportunity cost producer of good Y. 
B)  Good Y for Country A because it is the lower opportunity cost producer of good Y; good X for Country B because it is the lower opportunity cost producer of good X. 
C)  Good X for Country A because it is the lower opportunity cost producer of good X; good Y for Country B because it is the lower opportunity cost producer of good Y. 
D)  Good Y for Country A because it is the higher opportunity cost producer of good Y; good X for Country B because it is the higher opportunity cost producer of good X. 
A)  Good X for Country A because it is the higher opportunity cost producer of good X; good Y for Country B because it is the higher opportunity cost producer of good Y. 
B)  Good Y for Country A because it is the lower opportunity cost producer of good Y; good X for Country B because it is the lower opportunity cost producer of good X. 
C)  Good X for Country A because it is the lower opportunity cost producer of good X; good Y for Country B because it is the lower opportunity cost producer of good Y. 
D)  Good Y for Country A because it is the higher opportunity cost producer of good Y; good X for Country B because it is the higher opportunity cost producer of good X.

Question 10

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

Accepted Answer

A)  20B; 15B 
B)  2B; 1B 
C)  40B; 15B 
D)  1/2B; 1B 
E)  1/20B; 1/15B 
A)  20B; 15B 
B)  2B; 1B 
C)  40B; 15B 
D)  1/2B; 1B 
E)  1/20B; 1/15B

Question 11

Exhibit 34-9
  
-Refer to Exhibit 34-9.In the no specialization-no trade case,suppose country X produces and consumes 100 units of good A and 20 units of good B.Country Y produces and consumes 20 units of good A and 60 units of good B.If the two countries specialize and trade,and the actual amounts traded are 125 units of good A for 25 units of good B,how many more units of good B will country Y consume by specializing and trading?

Accepted Answer

A)  75 
B)  5 
C)  15 
D)  10 
E)  50 
A)  75 
B)  5 
C)  15 
D)  10 
E)  50

Question 12

The sale of goods abroad at a price below their cost and below the price charged in the domestic market is called

Accepted Answer

A)  priming. 
B)  coping. 
C)  invading. 
D)  dumping. 
A)  priming. 
B)  coping. 
C)  invading. 
D)  dumping.

Exam 34: International Trade

Raquel,who earns $800 a week,bought a television set and gained $50 consumers' surplus.What price did she pay for the good?

Exhibit 34-9 -Refer to Exhibit 34-9.For country Y,the opportunity cost of producing one unit of good A is __________ unit(s)of good B.

The effects of tariffs and quotas are: a(n)__________ in consumers' surplus,and a(n)__________ in producers' surplus.

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 increase consumers' surplus by an amount equal to area

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 B.

How do countries know when they have a comparative advantage in the production of a good?

Exhibit 34-6 -Refer to Exhibit 34-6.Which of the following is true?

Exhibit 34-10 -Refer to Exhibit 34-10. Danielle's opportunity cost of mowing the lawn is

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

The sale of goods abroad at a price below their cost and below the price charged in the domestic market is called

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

The effects of tariffs and quotas are: a(n) in consumers' surplus,and a(n) in producers' surplus.

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