Question 1

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

Accepted Answer

A) 0.5 units of X. 
B) 1 unit of X. 
C) 2 units of X. 
D) 20 units of X. 
A) 0.5 units of X. 
B) 1 unit of X. 
C) 2 units of X. 
D) 20 units of X.

Question 2

Which of the following is an example of a trade restriction?

Accepted Answer

A) quotas 
B) tariffs 
C) dumping 
D) a and b 
E) a, b, and c 
A) quotas 
B) tariffs 
C) dumping 
D) a and b 
E) a, b, and c

Question 3

Exhibit 33-4
​
  
-Refer to Exhibit 33-4. The opportunity cost of one unit of good A is __________ for country 1 and __________ for country 2.

Accepted Answer

A) 20B; 15B 
B) 5B; 1B 
C) 40B; 15B 
D) 0.2B; 1B 
E) 0.5B; 15B 
A) 20B; 15B 
B) 5B; 1B 
C) 40B; 15B 
D) 0.2B; 1B 
E) 0.5B; 15B

Question 4

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). Consumers' surplus is equal to the area __________ while producers' surplus is equal to the area __________.

Accepted Answer

A) A + B + C + D + E + F; G + H + I + J + K 
B) A + C + G; B + D + E + F 
C) A + B; C + G 
D) A + C; G 
E) A + C; B + D + E + F 
A) A + B + C + D + E + F; G + H + I + J + K 
B) A + C + G; B + D + E + F 
C) A + B; C + G 
D) A + C; G 
E) A + C; B + D + E + F

Question 5

Global technologies, such as electronics, have made up a significant portion of the recent wave of manufacturing offshoring.

Accepted Answer

A) True 
 B)False

Question 6

Raquel, who earns $900 a week, bought a television set and gained $70 consumers' surplus. What price did she pay for the good?

Accepted Answer

A) $40 
B) $830 
C) $160 
D) $5 
E) There is not enough information to answer the question. 
A) $40 
B) $830 
C) $160 
D) $5 
E) There is not enough information to answer the question.

Question 7

A quota is

Accepted Answer

A) a tax imposed on imported goods. 
B) a legal limit on the amount of a good that can be produced by foreign owners of a firm located in a host country. 
C) a legal limit on the amount of a good that can be imported. 
D) an agreement between two countries in which the exporting country voluntarily agrees to limit its exports to the importing country. 
A) a tax imposed on imported goods. 
B) a legal limit on the amount of a good that can be produced by foreign owners of a firm located in a host country. 
C) a legal limit on the amount of a good that can be imported. 
D) an agreement between two countries in which the exporting country voluntarily agrees to limit its exports to the importing country.

Question 8

Exhibit 33-12
​
  
-Refer to Exhibit 33-12. PW is the price that exists in a free world market. A quota is imposed and imports are Q4 - Q3. Importers gain revenues equal to the area __________.

Accepted Answer

A) GKL + HIJ 
B) GCE 
C) GHJK 
D) GFEH 
E) none of the above 
A) GKL + HIJ 
B) GCE 
C) GHJK 
D) GFEH 
E) none of the above

Question 9

Exhibit 33-12
​
  
-Refer to Exhibit 33-12. PW is the price that exists in a free world market. With the imposition of a quota that limits imports to Q4 - Q3, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

Accepted Answer

A) LGK + JHI. 
B) KGHJ. 
C) GCH + JHI. 
D) LGK. 
E) none of the above 
A) LGK + JHI. 
B) KGHJ. 
C) GCH + JHI. 
D) LGK. 
E) none of the above

Question 10

Exhibit 33-4
​
  
-Refer to Exhibit 33-4. The opportunity cost of one unit of good B is __________ for country 1 and __________ for country 2.

Accepted Answer

A) 20A; 15A 
B) 5A; 1A 
C) 40A; 15A 
D) 0.20A; 1A 
E) 1/40A; 1/15B 
A) 20A; 15A 
B) 5A; 1A 
C) 40A; 15A 
D) 0.20A; 1A 
E) 1/40A; 1/15B

Question 11

Exhibit 33-10
  
-Refer to Exhibit 33-10. Jason'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 12

International trade exists because countries

Accepted Answer

A) can make themselves better off through trade. 
B) want to be neighborly with each other. 
C) want to be political allies. 
D) want to improve diplomatic relations with each other. 
E) want to avoid war with each other. 
A) can make themselves better off through trade. 
B) want to be neighborly with each other. 
C) want to be political allies. 
D) want to improve diplomatic relations with each other. 
E) want to avoid war with each other.

Question 13

Exhibit 33-12
​
  
-Refer to Exhibit 33-12. PW is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q4 - Q3, price will rise to

Accepted Answer

A) P1. 
B) P2. 
C) P3. 
D) P4. 
E) There is not enough information to answer the question. 
A) P1. 
B) P2. 
C) P3. 
D) P4. 
E) There is not enough information to answer the question.

Question 14

Evidence indicates that tariffs and quotas are

Accepted Answer

A) beneficial for producers in a protected industry, but not beneficial for the workers in the industry. 
B) beneficial for producers in a protected industry, but not beneficial for consumers. 
C) beneficial for workers in a protected industry, but not beneficial for consumers. 
D) not beneficial for the workers in a protected industry or for consumers. 
E) b and c 
A) beneficial for producers in a protected industry, but not beneficial for the workers in the industry. 
B) beneficial for producers in a protected industry, but not beneficial for consumers. 
C) beneficial for workers in a protected industry, but not beneficial for consumers. 
D) not beneficial for the workers in a protected industry or for consumers. 
E) b and c

Question 15

Exhibit 33-5
​
  
-Refer to Exhibit 33-5. Country 1 has a comparative advantage in the production of __________, and country 2 has a comparative advantage in the production of __________.

Accepted Answer

A) good A; good B 
B) good B; good A 
C) both goods; neither good 
D) neither good; both goods 
E) neither good; neither good 
A) good A; good B 
B) good B; good A 
C) both goods; neither good 
D) neither good; both goods 
E) neither good; neither good

Question 16

The infant industry argument for trade protectionism holds that

Accepted Answer

A) new industries sometimes need a protective environment in which to grow so that they can compete with older, more established foreign competitors. 
B) foreign competitors are often viewed as "infants" by large U.S.firms. 
C) tariffs are often preferred to quotas. 
D) quotas raise prices more than tariffs raise prices. 
E) a and c 
A) new industries sometimes need a protective environment in which to grow so that they can compete with older, more established foreign competitors. 
B) foreign competitors are often viewed as "infants" by large U.S.firms. 
C) tariffs are often preferred to quotas. 
D) quotas raise prices more than tariffs raise prices. 
E) a and c

Question 17

Which of the following statements about a tariff and a quota is true?

Accepted Answer

A) With a tariff the government collects revenues, but not with a quota. 
B) With a quota the quantity of imports falls, but not with a tariff. 
C) With a tariff the domestic price of the good increases, but not with a quota. 
D) With a quota the domestic production of the good increases, but not with a tariff. 
E) all of the above 
A) With a tariff the government collects revenues, but not with a quota. 
B) With a quota the quantity of imports falls, but not with a tariff. 
C) With a tariff the domestic price of the good increases, but not with a quota. 
D) With a quota the domestic production of the good increases, but not with a tariff. 
E) all of the above

Question 18

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. The tariff results in a net loss to society equal to area(s)

Accepted Answer

A) DBE + FCG. 
B) EBCF. 
C) DBE + EBCF. 
D) FCG + EBCF. 
E) none of the above 
A) DBE + FCG. 
B) EBCF. 
C) DBE + EBCF. 
D) FCG + EBCF. 
E) none of the above

Question 19

A tariff on 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 and government; consumers 
C) raises; increases; decreases; does not generate; producers and government; consumers 
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 and government; consumers 
C) raises; increases; decreases; does not generate; producers and government; consumers 
D) raises; decreases; increases; generates; consumers; producers and government

Question 20

Exhibit 33-2
​
  
-Refer to Exhibit 33-2. 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, what quantity of this good do U.S. consumers buy from U.S. producers and what quantity do they import from foreign producers?

Accepted Answer

A) Q1 from U.S.producers and (Q3 - Q1) from foreign producers 
B) Q2 from U.S.producers and (Q3 - Q1) from foreign producers 
C) (Q3 - Q1) from U.S.producers and Q1 from foreign producers 
D) Q3 from U.S.producers and nothing from foreign producers 
A) Q1 from U.S.producers and (Q3 - Q1) from foreign producers 
B) Q2 from U.S.producers and (Q3 - Q1) from foreign producers 
C) (Q3 - Q1) from U.S.producers and Q1 from foreign producers 
D) Q3 from U.S.producers and nothing from foreign producers

Exam 33: International Trade

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

Which of the following is an example of a trade restriction?

Exhibit 33-4 ​ -Refer to Exhibit 33-4. The opportunity cost of one unit of good A is __________ for country 1 and __________ for country 2.

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). Consumers' surplus is equal to the area __________ while producers' surplus is equal to the area __________.

Global technologies, such as electronics, have made up a significant portion of the recent wave of manufacturing offshoring.

Raquel, who earns $900 a week, bought a television set and gained $70 consumers' surplus. What price did she pay for the good?

A quota is

Exhibit 33-12 ​ -Refer to Exhibit 33-12. PW is the price that exists in a free world market. A quota is imposed and imports are Q4 - Q3. Importers gain revenues equal to the area __________.

Exhibit 33-12 ​ -Refer to Exhibit 33-12. PW is the price that exists in a free world market. With the imposition of a quota that limits imports to Q4 - Q3, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

Exhibit 33-4 ​ -Refer to Exhibit 33-4. The opportunity cost of one unit of good B is __________ for country 1 and __________ for country 2.

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

International trade exists because countries

Exhibit 33-12 ​ -Refer to Exhibit 33-12. PW is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q4 - Q3, price will rise to

Evidence indicates that tariffs and quotas are

Exhibit 33-5 ​ -Refer to Exhibit 33-5. Country 1 has a comparative advantage in the production of __________, and country 2 has a comparative advantage in the production of __________.

The infant industry argument for trade protectionism holds that

Which of the following statements about a tariff and a quota is true?

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. The tariff results in a net loss to society equal to area(s)

Exhibit 33-2 ​ -Refer to Exhibit 33-2. 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, what quantity of this good do U.S. consumers buy from U.S. producers and what quantity do they import from foreign producers?

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

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

Exhibit 33-4 -Refer to Exhibit 33-4. The opportunity cost of one unit of good A is for country 1 and for country 2.

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). Consumers' surplus is equal to the area while producers' surplus is equal to the area .

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. A quota is imposed and imports are Q₄ - Q₃. Importers gain revenues equal to the area __________.

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. With the imposition of a quota that limits imports to Q₄ - Q₃, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

Exhibit 33-4 -Refer to Exhibit 33-4. The opportunity cost of one unit of good B is for country 1 and for country 2.

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q₄ - Q₃, price will rise to

Exhibit 33-5 -Refer to Exhibit 33-5. Country 1 has a comparative advantage in the production of , and country 2 has a comparative advantage in the production of .

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. The tariff results in a net loss to society equal to area(s)

Exhibit 33-2 -Refer to Exhibit 33-2. 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, what quantity of this good do U.S. consumers buy from U.S. producers and what quantity do they import from foreign producers?