Question 1

Which of the following statements is false?

Accepted Answer

A) Consumers receive more consumers' surplus when tariffs do not exist. 
B) Producers receive more producers' surplus when tariffs do exist. 
C) A tariff results in a net loss to society. 
D) With a tariff, the gains to the winners are less than the losses to the losers. 
E) none of the above 
A) Consumers receive more consumers' surplus when tariffs do not exist. 
B) Producers receive more producers' surplus when tariffs do exist. 
C) A tariff results in a net loss to society. 
D) With a tariff, the gains to the winners are less than the losses to the losers. 
E) none of the above

Question 2

Suppose that a tariff is imposed on imported cheese. This will have the effect of __________ the quantity consumed of cheese, __________ consumers' surplus, and __________ the government's tariff revenues.

Accepted Answer

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

Question 3

Exhibit 33-7
​
  
-Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X). The government collects tariff revenue on good X in the amount of

Accepted Answer

A) $100 
B) $200 
C) $250 
D) $300 
E) There is not enough information to answer this question. 
A) $100 
B) $200 
C) $250 
D) $300 
E) There is not enough information to answer this question.

Question 4

Explain why the government is often more responsive to producer interests than to consumer interests when it comes to the imposition of tariffs and quotas.

Accepted Answer

Government is generally more responsive

Question 5

Exhibit 33-3
​
  
-Refer to Exhibit 33-3. The world price is PW. If a tariff is imposed, the price rises to PW + T. Because of the tariff, producers' surplus is __________ by an amount equal to the area of __________.

Accepted Answer

A) increased; 1 + 2 
B) decreased; 1 
C) increased; 3 + 4 
D) increased; 1 
E) decreased; 3 
A) increased; 1 + 2 
B) decreased; 1 
C) increased; 3 + 4 
D) increased; 1 
E) decreased; 3

Question 6

One country has a comparative advantage over another country in the production of a good if it

Accepted Answer

A) has a curved production possibilities curve and the other country has a linear production possibilities curve. 
B) has a linear production possibilities curve and the other country has a curved production possibilities curve. 
C) is a lower opportunity cost producer of the good. 
D) has lower fixed costs than the other country. 
A) has a curved production possibilities curve and the other country has a linear production possibilities curve. 
B) has a linear production possibilities curve and the other country has a curved production possibilities curve. 
C) is a lower opportunity cost producer of the good. 
D) has lower fixed costs than the other country.

Question 7

Exhibit 33-6
​
  
-Refer to Exhibit 33-6. 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

Question 8

Exhibit 33-1
   ​
-Refer to Exhibit 33-1. If 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 9

Producers' surplus is

Accepted Answer

A) the difference between the price a buyer pays for a good and the highest price he would have paid for the good. 
B) the difference between the price a seller receives for a good and the minimum price for which he would have sold the good. 
C) the difference between the price a seller receives for a good and the price a buyer pays for the good. 
D) equal to price times quantity sold. 
E) equal to the seller's minimum price and the buyer's maximum price. 
A) the difference between the price a buyer pays for a good and the highest price he would have paid for the good. 
B) the difference between the price a seller receives for a good and the minimum price for which he would have sold the good. 
C) the difference between the price a seller receives for a good and the price a buyer pays for the good. 
D) equal to price times quantity sold. 
E) equal to the seller's minimum price and the buyer's maximum price.

Question 10

List and describe three arguments that help to explain why nations sometimes restrict trade. Does everyone agree with these arguments?

Accepted Answer

The arguments that have been given to su

Question 11

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, where imports are permitted, the world price is PW. If there is a policy change such that imports are prohibited, the price becomes PN, consumers' surplus equals __________ and producers' surplus equals __________.

Accepted Answer

A) PNAB; PNBE 
B) BCD; PNDE 
C) PNAD; BCD 
D) PNAD; PWBDE 
E) none of the above 
A) PNAB; PNBE 
B) BCD; PNDE 
C) PNAD; BCD 
D) PNAD; PWBDE 
E) none of the above

Question 12

Exhibit 33-5
​
  
-Refer to Exhibit 33-5. The opportunity cost of one unit of good A is __________ for country 1 and __________ for country 2.

Accepted Answer

A) 20B; 15B 
B) 10B; 15B 
C) 2B; 1B 
D) 1/2B; 2B 
E) 1/10B; 1B 
A) 20B; 15B 
B) 10B; 15B 
C) 2B; 1B 
D) 1/2B; 2B 
E) 1/10B; 1B

Question 13

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 A will country X consume by specializing and trading?

Accepted Answer

A) 75 
B) 25 
C) 15 
D) 105 
E) 50 
A) 75 
B) 25 
C) 15 
D) 105 
E) 50

Question 14

It is necessary for government officials to analyze cost data to determine what their country should specialize in producing.

Accepted Answer

A) True 
 B)False

Question 15

The effect of a tariff is

Accepted Answer

A) an increase in consumers' surplus. 
B) a decrease in producers' surplus. 
C) an increase in tariff revenues for government. 
D) b and c 
E) all of the above 
A) an increase in consumers' surplus. 
B) a decrease in producers' surplus. 
C) an increase in tariff revenues for government. 
D) b and c 
E) all of the above

Question 16

A country has a (an) __________ in the production of a good it produces at lower opportunity cost than another country.

Accepted Answer

A) absolute advantage 
B) specialization disadvantage 
C) tariff-efficient advantage 
D) infant-industry advantage 
E) none of the above 
A) absolute advantage 
B) specialization disadvantage 
C) tariff-efficient advantage 
D) infant-industry advantage 
E) none of the above

Question 17

Consumers' surplus is the difference between the price

Accepted Answer

A) sellers receive for a good and the maximum price they would have paid for the good. 
B) sellers receive for a good and the minimum price for which they could have sold the good. 
C) buyers pay for a good and the maximum price they would have paid for the good. 
D) buyers pay for a good and the minimum price for which they would have sold the good. 
A) sellers receive for a good and the maximum price they would have paid for the good. 
B) sellers receive for a good and the minimum price for which they could have sold the good. 
C) buyers pay for a good and the maximum price they would have paid for the good. 
D) buyers pay for a good and the minimum price for which they would have sold the good.

Question 18

The effects of a quota include:

Accepted Answer

A) decreasing consumers' surplus. 
B) increasing total revenue for the importers who sell the allowed number of imported units. 
C) increasing producers' surplus. 
D) b and c 
E) a, b, and c 
A) decreasing consumers' surplus. 
B) increasing total revenue for the importers who sell the allowed number of imported units. 
C) increasing producers' surplus. 
D) b and c 
E) a, b, and c

Question 19

When countries engage in specialization and international trade, every individual person in those countries will gain.

Accepted Answer

A) True 
 B)False

Question 20

Producers' surplus is the difference between the price

Accepted Answer

A) sellers receive for a good and the maximum price they would have paid for the good. 
B) sellers receive for a good and the minimum price for which they could have sold the good. 
C) buyers pay for a good and the maximum price they would have paid for the good. 
D) buyers pay for a good and the minimum price for which they would have sold the good. 
A) sellers receive for a good and the maximum price they would have paid for the good. 
B) sellers receive for a good and the minimum price for which they could have sold the good. 
C) buyers pay for a good and the maximum price they would have paid for the good. 
D) buyers pay for a good and the minimum price for which they would have sold the good.

Exam 33: International Trade

Which of the following statements is false?

Suppose that a tariff is imposed on imported cheese. This will have the effect of __________ the quantity consumed of cheese, __________ consumers' surplus, and __________ the government's tariff revenues.

Exhibit 33-7 ​ -Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X). The government collects tariff revenue on good X in the amount of

Explain why the government is often more responsive to producer interests than to consumer interests when it comes to the imposition of tariffs and quotas.

Exhibit 33-3 ​ -Refer to Exhibit 33-3. The world price is PW. If a tariff is imposed, the price rises to PW + T. Because of the tariff, producers' surplus is __________ by an amount equal to the area of __________.

One country has a comparative advantage over another country in the production of a good if it

Exhibit 33-6 ​ -Refer to Exhibit 33-6. The opportunity cost of 1 unit of cheese in terms of units of wine is __________ for country A.

Producers' surplus is

List and describe three arguments that help to explain why nations sometimes restrict trade. Does everyone agree with these arguments?

Exhibit 33-5 ​ -Refer to Exhibit 33-5. The opportunity cost of one unit of good A is __________ for country 1 and __________ for country 2.

It is necessary for government officials to analyze cost data to determine what their country should specialize in producing.

The effect of a tariff is

A country has a (an) __________ in the production of a good it produces at lower opportunity cost than another country.

Consumers' surplus is the difference between the price

The effects of a quota include:

When countries engage in specialization and international trade, every individual person in those countries will gain.

Producers' surplus is the difference between the price

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 quantity consumed of cheese, consumers' surplus, and __ the government's tariff revenues.

Exhibit 33-7 -Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X). The government collects tariff revenue on good X in the amount of

Exhibit 33-3 -Refer to Exhibit 33-3. The world price is P_W. If a tariff is imposed, the price rises to P_W + T. Because of the tariff, producers' surplus is by an amount equal to the area of .

Exhibit 33-6 -Refer to Exhibit 33-6. The opportunity cost of 1 unit of cheese in terms of units of wine is __________ for country A.

Exhibit 33-5 -Refer to Exhibit 33-5. The opportunity cost of one unit of good A is for country 1 and for country 2.