Question 1

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba

Question 2

If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports.

Accepted Answer

A)  raises; decreases 
B)  raises; increases 
C)  raises; does not change 
D)  lowers; does not change 
A)  raises; decreases 
B)  raises; increases 
C)  raises; does not change 
D)  lowers; does not change

Question 3

Over the past 80 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

Accepted Answer

A) True 
 B)False

Question 4

When the principle of comparative advantage is used to guide trade, then a country specializes in producing only

Accepted Answer

A)  goods with the highest opportunity cost. 
B)  goods with the lowest opportunity costs. 
C)  goods for which production takes fewer worker-hour than another country. 
D)  goods for which production costs are more than average total costs. 
A)  goods with the highest opportunity cost. 
B)  goods with the lowest opportunity costs. 
C)  goods for which production takes fewer worker-hour than another country. 
D)  goods for which production costs are more than average total costs.

Question 5

Who benefits from a tariff on a good?

Accepted Answer

A)  domestic consumers of the good 
B)  foreign governments 
C)  domestic producers of the good 
D)  foreign producers of the good 
A)  domestic consumers of the good 
B)  foreign governments 
C)  domestic producers of the good 
D)  foreign producers of the good

Question 6

An import quota on sugar

Accepted Answer

A)  increases the imports of sugar and lowers its price. 
B)  increases the imports of sugar and raises its price. 
C)  increases the demand for sugar and raises its price. 
D)  decreases the imports of sugar and raises its price. 
A)  increases the imports of sugar and lowers its price. 
B)  increases the imports of sugar and raises its price. 
C)  increases the demand for sugar and raises its price. 
D)  decreases the imports of sugar and raises its price.

Question 7

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In the figure above, with international trade the United States ________ million shirts per year.

Accepted Answer

A)  imports 32 
B)  imports 48 
C)  exports 16 
D)  exports 32 
A)  imports 32 
B)  imports 48 
C)  exports 16 
D)  exports 32

Question 8

A tariff is

Accepted Answer

A)  a government imposed limit on the amount of a good that can be exported from a nation. 
B)  a government imposed barrier that sets a fixed limit on the amount of a good that can be imported into a nation. 
C)  a tax on a good imported into a nation. 
D)  an agreement between governments to limit exports from a nation. 
A)  a government imposed limit on the amount of a good that can be exported from a nation. 
B)  a government imposed barrier that sets a fixed limit on the amount of a good that can be imported into a nation. 
C)  a tax on a good imported into a nation. 
D)  an agreement between governments to limit exports from a nation.

Question 9

A U.S. tariff on textiles would ________ U.S. clothing prices and ________ jobs in the U.S. textile industry.

Accepted Answer

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

Question 10

Which of the following is CORRECT?

Accepted Answer

A)  Both imports and exports include goods and services. 
B)  Imports includes both goods and services but exports includes only goods. 
C)  Imports includes only goods but exports includes both goods and services. 
D)  Both exports and imports include goods and neither includes services. 
A)  Both imports and exports include goods and services. 
B)  Imports includes both goods and services but exports includes only goods. 
C)  Imports includes only goods but exports includes both goods and services. 
D)  Both exports and imports include goods and neither includes services.

Question 11

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter.
-In the figure above, international trade ________ total surplus in the United States by ________.

Accepted Answer

A)  increases; $1.92 billion 
B)  decreases; $2.56 billion 
C)  increases; $4.8 billion 
D)  decreases; $3.6 billion 
A)  increases; $1.92 billion 
B)  decreases; $2.56 billion 
C)  increases; $4.8 billion 
D)  decreases; $3.6 billion

Question 12

When a group lobbies for the prevention of free trade, the most likely reason is

Accepted Answer

A)  rent seeking. 
B)  tariff revenue. 
C)  defense against expensive domestic labor. 
D)  preservation of the environment. 
A)  rent seeking. 
B)  tariff revenue. 
C)  defense against expensive domestic labor. 
D)  preservation of the environment.

Question 13

The argument that protection

Accepted Answer

A)  penalizes poor environmental standards is true. 
B)  allows us to compete with cheap foreign wages is true. 
C)  is necessary for infant industries is true. 
D)  saves jobs is flawed. 
A)  penalizes poor environmental standards is true. 
B)  allows us to compete with cheap foreign wages is true. 
C)  is necessary for infant industries is true. 
D)  saves jobs is flawed.

Question 14

Lowering the tariff on imported ethanol

Accepted Answer

A)  increases domestic employment in the ethanol industry. 
B)  increases the imports of ethanol. 
C)  increases the domestic price of ethanol. 
D)  has no effect unless the nation's trading partner also lowers its tariff on ethanol. 
A)  increases domestic employment in the ethanol industry. 
B)  increases the imports of ethanol. 
C)  increases the domestic price of ethanol. 
D)  has no effect unless the nation's trading partner also lowers its tariff on ethanol.

Question 15

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Accepted Answer

A)  zero. 
B)  6 percent. 
C)  20 percent. 
D)  100 percent. 
A)  zero. 
B)  6 percent. 
C)  20 percent. 
D)  100 percent.

Question 16

The current U.S. average tariff rate is

Accepted Answer

A)  less than 5 percent. 
B)  greater than 10 percent. 
C)  approximately 20 percent. 
D)  over 50 percent. 
A)  less than 5 percent. 
B)  greater than 10 percent. 
C)  approximately 20 percent. 
D)  over 50 percent.

Question 17

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Suppose the Brazilian government subsidizes the export of coffee by $0.42 per pound. Which of the following would be an outcome of this subsidy?

Accepted Answer

A)  Brazilian producers experience an increase in producer surplus. 
B)  Brazilian consumers experience an increase in consumer surplus. 
C)  Producers from the rest of the world experience a gain in producer surplus. 
D)  Brazilian coffee exports would decrease. 
A)  Brazilian producers experience an increase in producer surplus. 
B)  Brazilian consumers experience an increase in consumer surplus. 
C)  Producers from the rest of the world experience a gain in producer surplus. 
D)  Brazilian coffee exports would decrease.

Question 18

The gains from trade that are possible when two countries have different opportunity costs for wheat and coffee are realized when

Accepted Answer

A)  trade occurs and resources are reallocated within the two countries. 
B)  the two countries continue to produce the same quantities of wheat and coffee. 
C)  each country has an absolute advantage in one of the two commodities. 
D)  the demand curves in both countries shift inward. 
A)  trade occurs and resources are reallocated within the two countries. 
B)  the two countries continue to produce the same quantities of wheat and coffee. 
C)  each country has an absolute advantage in one of the two commodities. 
D)  the demand curves in both countries shift inward.

Question 19

A country opens up to trade and imports clothing. In the clothing market, surplus has been redistributed from

Accepted Answer

A)  producers to consumers. 
B)  consumers to producers. 
C)  government to consumers. 
D)  producers to government. 
A)  producers to consumers. 
B)  consumers to producers. 
C)  government to consumers. 
D)  producers to government.

Question 20

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In the figure above, international trade ________ producer surplus in the United States by ________.

Accepted Answer

A)  increases; $320 million 
B)  decreases; $192 million 
C)  increases; $192 million 
D)  decreases; $320 million 
A)  increases; $320 million 
B)  decreases; $192 million 
C)  increases; $192 million 
D)  decreases; $320 million

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

If a country imposes a tariff on an imported good, the tariff the price in the importing country and the quantity of imports.

Over the past 80 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

When the principle of comparative advantage is used to guide trade, then a country specializes in producing only

Who benefits from a tariff on a good?

An import quota on sugar

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade the United States ________ million shirts per year.

A tariff is

A U.S. tariff on textiles would U.S. clothing prices and jobs in the U.S. textile industry.

Which of the following is CORRECT?

When a group lobbies for the prevention of free trade, the most likely reason is

The argument that protection

Lowering the tariff on imported ethanol

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

The current U.S. average tariff rate is

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Suppose the Brazilian government subsidizes the export of coffee by $0.42 per pound. Which of the following would be an outcome of this subsidy?

The gains from trade that are possible when two countries have different opportunity costs for wheat and coffee are realized when

A country opens up to trade and imports clothing. In the clothing market, surplus has been redistributed from

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, international trade producer surplus in the United States by .

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 7: Global Markets in Action

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports.

Over the past 80 years, the United States has reduced its average tariff rate so today it is less than 5 percent.

When the principle of comparative advantage is used to guide trade, then a country specializes in producing only

Who benefits from a tariff on a good?

An import quota on sugar

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, with international trade the United States ________ million shirts per year.

A tariff is

A U.S. tariff on textiles would ________ U.S. clothing prices and ________ jobs in the U.S. textile industry.

Which of the following is CORRECT?

When a group lobbies for the prevention of free trade, the most likely reason is

The argument that protection

Lowering the tariff on imported ethanol

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

The current U.S. average tariff rate is

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Suppose the Brazilian government subsidizes the export of coffee by $0.42 per pound. Which of the following would be an outcome of this subsidy?

The gains from trade that are possible when two countries have different opportunity costs for wheat and coffee are realized when

A country opens up to trade and imports clothing. In the clothing market, surplus has been redistributed from

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, international trade ________ producer surplus in the United States by ________.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

If a country imposes a tariff on an imported good, the tariff the price in the importing country and the quantity of imports.

A U.S. tariff on textiles would U.S. clothing prices and jobs in the U.S. textile industry.

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above, international trade producer surplus in the United States by .