Question 1

In 2002,President Bush imposed a tariff on imported steel.He did so in response to rent seeking by

Accepted Answer

A)  domestic steel consumers. 
B)  domestic steel producers. 
C)  foreign steel consumers. 
D)  foreign steel producers. 
E)  foreign politicians. 
A)  domestic steel consumers. 
B)  domestic steel producers. 
C)  foreign steel consumers. 
D)  foreign steel producers. 
E)  foreign politicians.

Question 2

$\begin{array}{c}
\begin{array}{c}
\text { Price } \
\text { (dollars per unit }\
\hline 2 \
4 \
6 \
8 \
10 \
12
\end{array}
\begin{array}{c}
\text { Quantity demanded }\
\text { (units per day) } \
\hline 20 \
19 \
18 \
17 \
16 \
15
\end{array}
\begin{array}{c}
\text { Quantity supplied }\
\text { (units per day) } \
\hline 14 \
16 \
18 \
20 \
22 \
24
\end{array}
\end{array}$

-According to the above table,the country will import the good if the world price is less than ________ and will export the good if the world price is more than ________.

Accepted Answer

A)  $4; $4 
B)  $6; $6 
C)  $8; $4 
D)  $10; $10 
E)  $4; $8 
A)  $4; $4 
B)  $6; $6 
C)  $8; $4 
D)  $10; $10 
E)  $4; $8

Question 3

-The above figure shows the U.S.market for replacement cell phone batteries.Area E is the

Accepted Answer

A)  producer surplus when there is free trade. 
B)  deadweight loss from tariff. 
C)  tariff revenue. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff. 
A)  producer surplus when there is free trade. 
B)  deadweight loss from tariff. 
C)  tariff revenue. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff.

Question 4

-Based on the figure above,as a result of international trade,U.S.domestic production ________ million T-shirts per year.

Accepted Answer

A)  decreases by 20 
B)  increases by 20 
C)  decreases by 10 
D)  increases by 40 
E)  increases by 10 
A)  decreases by 20 
B)  increases by 20 
C)  decreases by 10 
D)  increases by 40 
E)  increases by 10

Question 5

Of the following,who gains because of tariffs and why?

Accepted Answer

A)  domestic producers of protected goods because they can sell at a higher price 
B)  domestic buyers because they can be sure of buying high-quality products 
C)  foreign producers because they earn more total revenue 
D)  foreign government because they gain more revenue 
E)  domestic buyers because they pay a lower price 
A)  domestic producers of protected goods because they can sell at a higher price 
B)  domestic buyers because they can be sure of buying high-quality products 
C)  foreign producers because they earn more total revenue 
D)  foreign government because they gain more revenue 
E)  domestic buyers because they pay a lower price

Question 6

A country exports a good if

Accepted Answer

A)  it has a high opportunity cost of production. 
B)  the world price of the good is below the country's no-trade equilibrium price. 
C)  the world price of the good is above the country's no-trade equilibrium price. 
D)  the quantity demanded of the good in the country is greater than the quantity supplied at the world price. 
E)  it cannot import the good. 
A)  it has a high opportunity cost of production. 
B)  the world price of the good is below the country's no-trade equilibrium price. 
C)  the world price of the good is above the country's no-trade equilibrium price. 
D)  the quantity demanded of the good in the country is greater than the quantity supplied at the world price. 
E)  it cannot import the good.

Question 7

How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service?

Accepted Answer

Whether a nation has a comparative advan

Question 8

Briefly define a tariff and a quota.Do any of these methods restrict trade without harming domestic consumers?

Accepted Answer

Governments restrict trade through the u

Question 9

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

Accepted Answer

A)  save domestic jobs 
B)  national security 
C)  anti-dumping 
D)  infant-industry 
E)  penalizing lax environmental standards 
A)  save domestic jobs 
B)  national security 
C)  anti-dumping 
D)  infant-industry 
E)  penalizing lax environmental standards

Question 10

What is rent seeking with respect to restricting international trade?

Accepted Answer

A)  The rent on factory buildings increases if trade is restricted. 
B)  The government avoids paying rent on buildings when importers pay the tariff. 
C)  An attempt to capture the gains from trade by imposing a tariff. 
D)  The government's efforts to capture tariff rents. 
E)  The attempt by importers to avoid paying a tariff. 
A)  The rent on factory buildings increases if trade is restricted. 
B)  The government avoids paying rent on buildings when importers pay the tariff. 
C)  An attempt to capture the gains from trade by imposing a tariff. 
D)  The government's efforts to capture tariff rents. 
E)  The attempt by importers to avoid paying a tariff.

Question 11

Why are the losers from free international trade not fully compensated for their losses?

Accepted Answer

A)  The amount of compensation needed would bankrupt the government. 
B)  The people who claim to lose are also the same ones who benefit. 
C)  Identifying all losers and the size of their losses is extremely difficult. 
D)  No one actually loses from international trade. 
E)  The losers are foreigners. 
A)  The amount of compensation needed would bankrupt the government. 
B)  The people who claim to lose are also the same ones who benefit. 
C)  Identifying all losers and the size of their losses is extremely difficult. 
D)  No one actually loses from international trade. 
E)  The losers are foreigners.

Question 12

What is the national security argument to support protection from international trade?

Accepted Answer

A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability. 
A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability.

Question 13

When a tariff is imposed on a good,the ________ increases.

Accepted Answer

A)  domestic quantity purchased 
B)  domestic quantity produced 
C)  quantity imported 
D)  quantity exported 
E)  world price 
A)  domestic quantity purchased 
B)  domestic quantity produced 
C)  quantity imported 
D)  quantity exported 
E)  world price

Question 14

Suppose the world price of widgets is $5 each.If a widget-importing country imposed a $2 per widget tariff,what price would that country's consumers pay for widgets?

Accepted Answer

A)  $10 
B)  $7 
C)  $5 
D)  $3 
E)  A price that is greater than $5 and less than $7 
A)  $10 
B)  $7 
C)  $5 
D)  $3 
E)  A price that is greater than $5 and less than $7

Question 15

-The above figure shows the U.S.market for wheat.Without international trade,producer surplus is equal to ________.

Accepted Answer

A)  area B + area C + area E + area F 
B)  area A 
C)  area B + area C +area D + area E + area F 
D)  area E + area F 
E)  area A + area B + area C + area D 
A)  area B + area C + area E + area F 
B)  area A 
C)  area B + area C +area D + area E + area F 
D)  area E + area F 
E)  area A + area B + area C + area D

Question 16

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good ________ and domestic production of the good ________.

Accepted Answer

A)  increase; increases 
B)  increase; decreases 
C)  decrease; increases 
D)  decrease; decreases 
E)  do not change; increases 
A)  increase; increases 
B)  increase; decreases 
C)  decrease; increases 
D)  decrease; decreases 
E)  do not change; increases

Question 17

Of the following,who is harmed by a tariff?

Accepted Answer

A)  domestic buyers of the good or service 
B)  the overall domestic economy 
C)  the foreign exporter of the good or service 
D)  domestic producers of the good or service 
E)  Both answers A and B are correct. 
A)  domestic buyers of the good or service 
B)  the overall domestic economy 
C)  the foreign exporter of the good or service 
D)  domestic producers of the good or service 
E)  Both answers A and B are correct.

Question 18

Of the following,who gains from a tariff?

Accepted Answer

A)  the government of the importing country 
B)  the government of the exporting country 
C)  consumers in the importing country 
D)  producers in the exporting country 
E)  both the government of the exporting country and the government of the importing country 
A)  the government of the importing country 
B)  the government of the exporting country 
C)  consumers in the importing country 
D)  producers in the exporting country 
E)  both the government of the exporting country and the government of the importing country

Question 19

The United States imports t-shirts from Asia.As a result,U.S.consumers pay ________ otherwise and Asian producers receive ________ otherwise.

Accepted Answer

A)  a higher price than; a higher price than 
B)  a higher price than; a lower price than 
C)  a lower price than; a higher price than 
D)  a lower price than; a lower price than 
E)  the same price as; the same price as 
A)  a higher price than; a higher price than 
B)  a higher price than; a lower price than 
C)  a lower price than; a higher price than 
D)  a lower price than; a lower price than 
E)  the same price as; the same price as

Question 20

The infant-industry argument for protection is based on the idea of

Accepted Answer

A)  learning-by-doing. 
B)  dumping. 
C)  absolute advantage. 
D)  quotas are the least harmful method of protecting domestic firms. 
E)  saving jobs in the U.S. economy. 
A)  learning-by-doing. 
B)  dumping. 
C)  absolute advantage. 
D)  quotas are the least harmful method of protecting domestic firms. 
E)  saving jobs in the U.S. economy.

In 2002,President Bush imposed a tariff on imported steel.He did so in response to rent seeking by

Price (dollars per unit 2 4 6 8 10 12 Quantity demanded (units per day) 20 19 18 17 16 15 Quantity supplied (units per day) 14 16 18 20 22 24 -According to the above table,the country will import the good if the world price is less than and will export the good if the world price is more than .

-The above figure shows the U.S.market for replacement cell phone batteries.Area E is the

-Based on the figure above,as a result of international trade,U.S.domestic production ________ million T-shirts per year.

Of the following,who gains because of tariffs and why?

A country exports a good if

How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service?

Briefly define a tariff and a quota.Do any of these methods restrict trade without harming domestic consumers?

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

What is rent seeking with respect to restricting international trade?

Why are the losers from free international trade not fully compensated for their losses?

What is the national security argument to support protection from international trade?

When a tariff is imposed on a good,the ________ increases.

Suppose the world price of widgets is $5 each.If a widget-importing country imposed a $2 per widget tariff,what price would that country's consumers pay for widgets?

-The above figure shows the U.S.market for wheat.Without international trade,producer surplus is equal to ________.

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good and domestic production of the good .

Of the following,who is harmed by a tariff?

Of the following,who gains from a tariff?

The United States imports t-shirts from Asia.As a result,U.S.consumers pay otherwise and Asian producers receive otherwise.

The infant-industry argument for protection is based on the idea of

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 9: Global Markets in Action

In 2002,President Bush imposed a tariff on imported steel.He did so in response to rent seeking by

-The above figure shows the U.S.market for replacement cell phone batteries.Area E is the

-Based on the figure above,as a result of international trade,U.S.domestic production ________ million T-shirts per year.

Of the following,who gains because of tariffs and why?

A country exports a good if

How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service?

Briefly define a tariff and a quota.Do any of these methods restrict trade without harming domestic consumers?

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

What is rent seeking with respect to restricting international trade?

Why are the losers from free international trade not fully compensated for their losses?

What is the national security argument to support protection from international trade?

When a tariff is imposed on a good,the ________ increases.

Suppose the world price of widgets is $5 each.If a widget-importing country imposed a $2 per widget tariff,what price would that country's consumers pay for widgets?

-The above figure shows the U.S.market for wheat.Without international trade,producer surplus is equal to ________.

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good ________ and domestic production of the good ________.

Of the following,who is harmed by a tariff?

Of the following,who gains from a tariff?

The United States imports t-shirts from Asia.As a result,U.S.consumers pay ________ otherwise and Asian producers receive ________ otherwise.

The infant-industry argument for protection is based on the idea of

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good and domestic production of the good .

The United States imports t-shirts from Asia.As a result,U.S.consumers pay otherwise and Asian producers receive otherwise.