Question 1

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

Accepted Answer

A) the benefits resulting from trade between the two countries are increased. 
B) there are no gains from specialization and trade between the two countries. 
C) one country must be more productive in producing all goods than the other. 
D) each country should specialize in the production of a particular good. 
E) none of the above 
A) the benefits resulting from trade between the two countries are increased. 
B) there are no gains from specialization and trade between the two countries. 
C) one country must be more productive in producing all goods than the other. 
D) each country should specialize in the production of a particular good. 
E) none of the above B

Question 2

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

Accepted Answer

A) producers' surplus. 
B) consumers' surplus. 
C) marginal revenue. 
D) marginal utility. 
A) producers' surplus. 
B) consumers' surplus. 
C) marginal revenue. 
D) marginal utility. B

Question 3

Suppose that a tariff is imposed on imported cheese. This will have the effect of __________ the price of cheese, __________ consumers' surplus, and __________ producers' surplus.

Accepted Answer

A) increasing; increasing; increasing 
B) decreasing; decreasing; decreasing 
C) increasing; increasing; decreasing 
D) increasing; decreasing; increasing 
E) decreasing; decreasing; increasing 
A) increasing; increasing; increasing 
B) decreasing; decreasing; decreasing 
C) increasing; increasing; decreasing 
D) increasing; decreasing; increasing 
E) decreasing; decreasing; increasing D

Question 4

"Dumping" refers to

Accepted Answer

A) the sale of goods abroad at a price below their cost and below the price charged in the domestic market. 
B) unloading of foreign goods on domestic docks. 
C) government actions to remedy "unfair" trade practices. 
D) buying goods at low prices in foreign countries and selling them at high prices in the United States. 
A) the sale of goods abroad at a price below their cost and below the price charged in the domestic market. 
B) unloading of foreign goods on domestic docks. 
C) government actions to remedy "unfair" trade practices. 
D) buying goods at low prices in foreign countries and selling them at high prices in the United States.

Question 5

"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.

Accepted Answer

A) national-defense 
B) infant-industry 
C) anti-dumping 
D) tariff 
E) none of the above 
A) national-defense 
B) infant-industry 
C) anti-dumping 
D) tariff 
E) none of the above

Question 6

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 7

Exhibit 33-8
​
  
-Refer to Exhibit 33-8. 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 8

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 9

Exhibit 33-11
​
  
-Refer to Exhibit 33-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area

Accepted Answer

A) BCFE. 
B) BCGE. 
C) DBCG. 
D) DBCF. 
E) none of the above 
A) BCFE. 
B) BCGE. 
C) DBCG. 
D) DBCF. 
E) none of the above

Question 10

Exhibit 33-1
   ​
-Refer to Exhibit 33-1. The opportunity cost of one unit of X in country A is

Accepted Answer

A) 1.5 unit of Y. 
B) 2 units of Y. 
C) 10 units of Y. 
D) 0.67 units of Y. 
A) 1.5 unit of Y. 
B) 2 units of Y. 
C) 10 units of Y. 
D) 0.67 units of Y.

Question 11

Exhibit 33-9
​
  
-Refer to Exhibit 33-9. Which of the following statements is true?

Accepted Answer

A) Country X has a comparative advantage in the production of good A. 
B) Country Y has a comparative advantage in the production of good B. 
C) It would be better for country A to specialize in (the production of) and trade good A than to specialize in and trade good B. 
D) a and c 
E) a, b, and c 
A) Country X has a comparative advantage in the production of good A. 
B) Country Y has a comparative advantage in the production of good B. 
C) It would be better for country A to specialize in (the production of) and trade good A than to specialize in and trade good B. 
D) a and c 
E) a, b, and c

Question 12

The difference between the amount a seller receives for a good and the lowest amount for which he would sell the good is called

Accepted Answer

A) producers' surplus. 
B) windfall gain. 
C) consumers' surplus. 
D) excess profit. 
A) producers' surplus. 
B) windfall gain. 
C) consumers' surplus. 
D) excess profit.

Question 13

Exhibit 33-10
  
-Refer to Exhibit 33-10. Danielle's opportunity cost of cleaning the house is

Accepted Answer

A) 0.50 mowed lawns. 
B) 1.00 mowed lawns. 
C) 2.00 mowed lawns. 
D) 0.60 mowed lawns. 
A) 0.50 mowed lawns. 
B) 1.00 mowed lawns. 
C) 2.00 mowed lawns. 
D) 0.60 mowed lawns.

Question 14

Exhibit 33-10
  
-Refer to Exhibit 33-10. Jason'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 15

The effects of tariffs and quotas are: a(n) __________ in the prices of imported goods to domestic consumers, and a(n) __________ in imports.

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 16

Exhibit 33-1
   ​
-Refer to Exhibit 33-1. Considering the data, which of the following terms of trade would both countries agree to?

Accepted Answer

A) 1 unit of Y for 1.25 unit of X 
B) 1 unit of Y for 0.85 units of X 
C) 1 unit of Y for 0.72 units of X 
D) 1 unit of Y for 1.50 units of X 
E) all of the above 
A) 1 unit of Y for 1.25 unit of X 
B) 1 unit of Y for 0.85 units of X 
C) 1 unit of Y for 0.72 units of X 
D) 1 unit of Y for 1.50 units of X 
E) all of the above

Question 17

Exhibit 33-9
​
  
-Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Accepted Answer

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

Question 18

Exhibit 33-9
​
  
-Refer to Exhibit 33-9. 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 X consume by specializing and trading?

Accepted Answer

A) 75 
B) 25 
C) 5 
D) 105 
E) 50 
A) 75 
B) 25 
C) 5 
D) 105 
E) 50

Question 19

On an aggregate level, free trade produces a net __________ and restricted trade produces a net __________.

Accepted Answer

A) loss; loss also 
B) benefit; benefit also 
C) benefit; loss 
D) loss; benefit 
A) loss; loss also 
B) benefit; benefit also 
C) benefit; loss 
D) loss; benefit

Question 20

A tariff is a tax on

Accepted Answer

A) savings. 
B) capital goods. 
C) imports. 
D) land. 
A) savings. 
B) capital goods. 
C) imports. 
D) land.

Exam 33: International Trade

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

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

Suppose that a tariff is imposed on imported cheese. This will have the effect of __________ the price of cheese, __________ consumers' surplus, and __________ producers' surplus.

"Dumping" refers to

"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.

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

Exhibit 33-8 ​ -Refer to Exhibit 33-8. 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.

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

Exhibit 33-11 ​ -Refer to Exhibit 33-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area

Exhibit 33-1 ​ -Refer to Exhibit 33-1. The opportunity cost of one unit of X in country A is

Exhibit 33-9 ​ -Refer to Exhibit 33-9. Which of the following statements is true?

The difference between the amount a seller receives for a good and the lowest amount for which he would sell the good is called

Exhibit 33-10 -Refer to Exhibit 33-10. Danielle's opportunity cost of cleaning the house is

Exhibit 33-10 -Refer to Exhibit 33-10. Jason's opportunity cost of mowing the lawn is

The effects of tariffs and quotas are: a(n) __________ in the prices of imported goods to domestic consumers, and a(n) __________ in imports.

Exhibit 33-1 ​ -Refer to Exhibit 33-1. Considering the data, which of the following terms of trade would both countries agree to?

Exhibit 33-9 ​ -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

On an aggregate level, free trade produces a net __________ and restricted trade produces a net __________.

A tariff is a tax on

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II 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

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice 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

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Suppose that a tariff is imposed on imported cheese. This will have the effect of the price of cheese, consumers' surplus, and __ producers' surplus.

Exhibit 33-8 -Refer to Exhibit 33-8. 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.

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

Exhibit 33-11 -Refer to Exhibit 33-11. 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. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area

Exhibit 33-1 -Refer to Exhibit 33-1. The opportunity cost of one unit of X in country A is

Exhibit 33-9 -Refer to Exhibit 33-9. Which of the following statements is true?

The effects of tariffs and quotas are: a(n) in the prices of imported goods to domestic consumers, and a(n) in imports.

Exhibit 33-1 -Refer to Exhibit 33-1. Considering the data, which of the following terms of trade would both countries agree to?

Exhibit 33-9 -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

On an aggregate level, free trade produces a net and restricted trade produces a net .