Exam 9: Global Markets in Action

Suppose that elimination of tariffs on agricultural products means that 1,000 farm workers lose jobs that pay an average of $20,000 per year.At the same time,because of the importation of relatively cheaper foreign vegetables,150 million consumers save $2 per year on their grocery bills. a.What is the total income lost by farm workers because of the free trade? b.What is the total dollar amount saved by all consumers combined? c.Which is greater,the lost income or the consumer savings? Do the benefits of free trade outweigh the costs in this simple example? d.Which group is most likely to become politically involved over the issue of removing the tariffs,the farm workers or the consumers? Why?

If the United States starts to import a good that had previously been produced in the United States,the market price of the good in the United States

Goods and services that the United States sells to other nations are called

The fundamental force that generates international trade is

Once international trade occurs,a country with a comparative advantage in the production of a good will ________ production of the good and ________.

-The above figure shows the U.S.market for 1 carat diamonds.The free trade,the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure,the price in the United States is equal to ________.

The figure above shows the U.S. market for T-shirts, where SUS is the domestic supply curve and DUS is the domestic demand curve. The world price of a T-shirt is $5. The U.S. government imposes a $2 per unit tariff on imported T-shirts. -The figure above shows that the government revenue from the tariff is

When a nation starts importing a good or service,domestic employment in that industry

Of the following,which group is hurt by a tariff?

If a quota is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will ________ and U.S.producer surplus from shrimp will ________.

Price (dollars per dose) Quantity supplied (thousands of doses per day) Quantity demanded (thousands of doses per day) 16 7 12 20 10 10 24 13 8 28 16 6 -Merck,an American pharmaceutical company,produces a vaccination that is used against chicken pox.The table shows the domestic demand for,and supply of,this medication,measured in thousands of doses per day.The world price of this medicine is $24 per dose. a.With no trade,what is the U.S.price and quantity of the vaccine? b.At the world price,how many doses are demanded in the United States? c.At the world price,how many doses are produced in the United States? d.At the world price,how many doses are exported?

Three arguments used to promote trade barriers are the national security argument,the infant-industry argument,and the dumping argument.Explain each of these arguments and evaluate whether each one has any flaws.

What is dumping?

A tax on a good that is imposed when it is imported is called

How do exports affect sellers' producer surplus?

When a nation exports a good,its ________ surplus decreases,and when it imports a good,its ________ surplus decreases.

If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry,which of the following is being used?

When a tariff is imposed on a good,domestic consumers of the good ________ and domestic producers of the good ________.

If the United States imposed a quota on the amount of salmon imported from Chile,the result would be ________ salmon prices in the United States and ________ in the quantity of salmon demanded in the United States.

When a nation imports a good,its ________ surplus decreases and its ________ surplus increases.