Question 1

If the United States negotiates a voluntary export restraint with international sugar producing nations,then

Accepted Answer

A)  U.S. sugar buyers pay a lower price for sugar. 
B)  U.S. sugar producers produce a smaller quantity. 
C)  imports of sugar increase. 
D)  the U.S. government collects less revenue than if it imposed a tariff on sugar. 
E)  the foreign governments collect more revenue than if a tariff is imposed on sugar. 
A)  U.S. sugar buyers pay a lower price for sugar. 
B)  U.S. sugar producers produce a smaller quantity. 
C)  imports of sugar increase. 
D)  the U.S. government collects less revenue than if it imposed a tariff on sugar. 
E)  the foreign governments collect more revenue than if a tariff is imposed on sugar.

Question 2

The country with a comparative advantage in the production of a good has a

Accepted Answer

A)  lower opportunity cost of production. 
B)  higher opportunity cost of production. 
C)  horizontal production possibilities frontier. 
D)  vertical production possibilities frontier. 
E)  linear production possibilities frontier. 
A)  lower opportunity cost of production. 
B)  higher opportunity cost of production. 
C)  horizontal production possibilities frontier. 
D)  vertical production possibilities frontier. 
E)  linear production possibilities frontier.

Question 3

-The above figure shows the domestic supply of and domestic demand for an imported good.The world price is $15 per unit.
a.At the world price of $15 per unit,what is the domestic consumption and domestic production?
b.At the world price of $15 per unit,what is the quantity imported?
c.If the government imposes a tariff of $5 per unit,what is the domestic consumption and domestic production?
d.With the $5 per unit tariff,what is the quantity imported?
e.How much revenue does the government collect with a tariff of $5 per unit?

Accepted Answer

a.Domestic consumption is 8 million unit

Question 4

The national security argument is used by those who assert they want to

Accepted Answer

A)  increase imports as a way of strengthening their country. 
B)  increase exports as a way of earning money to strengthen their country. 
C)  limit imports that compete with domestic producers important for national defense. 
D)  limit exports to control the flow of technology to third world nations. 
E)  limit all imports. 
A)  increase imports as a way of strengthening their country. 
B)  increase exports as a way of earning money to strengthen their country. 
C)  limit imports that compete with domestic producers important for national defense. 
D)  limit exports to control the flow of technology to third world nations. 
E)  limit all imports.

Question 5

-The above figure shows the U.S.market for wheat.When there is no international trade,consumer surplus is equal to ________.

Accepted Answer

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

Question 6

-The above figure shows the U.S.market for flip-flops.With international trade,the United States imports ________ flip-flops.

Accepted Answer

A)  300,000 
B)  500,000 
C)  700,000 
D)  0 because the United States exports flip-flops 
E)  400,000 
A)  300,000 
B)  500,000 
C)  700,000 
D)  0 because the United States exports flip-flops 
E)  400,000

Question 7

The difference between a tariff and a quota is that the revenue from the tariff goes to the

Accepted Answer

A)  domestic consumer. 
B)  domestic producer. 
C)  domestic government. 
D)  foreign producers. 
E)  foreign government. 
A)  domestic consumer. 
B)  domestic producer. 
C)  domestic government. 
D)  foreign producers. 
E)  foreign government.

Question 8

A country exports the goods

Accepted Answer

A)  for which its domestic prices are very high compared to the world prices. 
B)  that the economy can produce the most of. 
C)  that the economy can produce at relatively lowest opportunity cost. 
D)  that it cannot sell domestically. 
E)  in which it has a comparative disadvantage. 
A)  for which its domestic prices are very high compared to the world prices. 
B)  that the economy can produce the most of. 
C)  that the economy can produce at relatively lowest opportunity cost. 
D)  that it cannot sell domestically. 
E)  in which it has a comparative disadvantage.

Question 9

-The above figure shows the U.S.market for flip-flops.When there is no international trade,the U.S.price is ________ per flip-flop and the U.S.quantity is ________ flip-flops.

Accepted Answer

A)  $12; 300,000 
B)  $14; 500,000 
C)  $12; 700,000 
D)  $14; 300,000 
E)  $14; 700,000 
A)  $12; 300,000 
B)  $14; 500,000 
C)  $12; 700,000 
D)  $14; 300,000 
E)  $14; 700,000

Question 10

Suppose the world price of a shirt is $10.If the United States imposes a tariff of $5 a shirt,then the price of a shirt in the

Accepted Answer

A)  United States falls to $5. 
B)  United States rises to $15. 
C)  world falls to $5. 
D)  world rises to $5. 
E)  world rises to $15 
A)  United States falls to $5. 
B)  United States rises to $15. 
C)  world falls to $5. 
D)  world rises to $5. 
E)  world rises to $15

Question 11

When a country exports a good,the country's producer surplus ________,consumer surplus ________,and the country ________ from the trade.

Accepted Answer

A)  increases; increases; gains 
B)  decreases; increases; gains 
C)  increases; decreases; gains 
D)  decreases; decreases; loses 
E)  increases; decreases; loses 
A)  increases; increases; gains 
B)  decreases; increases; gains 
C)  increases; decreases; gains 
D)  decreases; decreases; loses 
E)  increases; decreases; loses

Question 12

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

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  increase; not change 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  increase; not change

Question 13

While high-paid American workers fear competition with low-paid foreign workers,low-paid foreign workers fear competition with high-paid American workers.Why?

Accepted Answer

A)  It is completely irrational and unfounded. 
B)  Because America has such a large market it can protect its workers. 
C)  Because high wages reflect high worker productivity and the low-paid foreign workers are not as productive. 
D)  Because high wages are the result of extensive tariff and other trade restrictions. 
E)  Because high wages mean that U.S. workers can buy more goods and services. 
A)  It is completely irrational and unfounded. 
B)  Because America has such a large market it can protect its workers. 
C)  Because high wages reflect high worker productivity and the low-paid foreign workers are not as productive. 
D)  Because high wages are the result of extensive tariff and other trade restrictions. 
E)  Because high wages mean that U.S. workers can buy more goods and services.

Question 14

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded Quantity supplied } \
\text { (units per day) }
\end{array} & \begin{array} { c } 
\text { (units per day) }
\end{array} \
\hline 4 & 200 & 140 \
8 & 190 & 160 \
12 & 180 & 180 \
16 & 170 & 200 \
20 & 160 & 220 \
24 & 150 & 240 \
\hline
\end{array}$$
-The table above has the domestic supply and domestic demand schedules for a product.What is the equilibrium price with no trade? Over what range of prices will the country export the good? Over what range will it import the good? Suppose the world price is $20.What is the quantity demanded,the quantity supplied,and the amount of the good exported or imported?

Accepted Answer

The price with no trade is $12.The count

Question 15

A quota is a

Accepted Answer

A)  quantitative restriction on an import imposed by the importing country. 
B)  quantitative restriction on an import imposed by the exporting country. 
C)  restriction on how much a customer can buy of a scarce good imposed by the seller. 
D)  tax that is imposed on a good when it crosses an international boundary. 
E)  trade barrier that does not harm domestic consumers of the good or service. 
A)  quantitative restriction on an import imposed by the importing country. 
B)  quantitative restriction on an import imposed by the exporting country. 
C)  restriction on how much a customer can buy of a scarce good imposed by the seller. 
D)  tax that is imposed on a good when it crosses an international boundary. 
E)  trade barrier that does not harm domestic consumers of the good or service.

Question 16

-In the figure above,with international trade U.S.consumers buy ________ million T-shirts per year at ________ per T-shirt.

Accepted Answer

A)  60; $5 
B)  40; $8 
C)  20; $5 
D)  40; $5 
E)  60; $11 
A)  60; $5 
B)  40; $8 
C)  20; $5 
D)  40; $5 
E)  60; $11

Question 17

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to ________ batteries per year.When a $2 tariff is in place,U.S.production is equal to ________ batteries per year.

Accepted Answer

A)  100,000; 300,000 
B)  100,000; 500,000 
C)  300,000; 100,000 
D)  300,000; 500,000 
E)  900,000; 700,000 
A)  100,000; 300,000 
B)  100,000; 500,000 
C)  300,000; 100,000 
D)  300,000; 500,000 
E)  900,000; 700,000

Question 18

What is the dumping argument for 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 19

What is "rent seeking"? How does it apply to restricting imports?

Accepted Answer

Rent seeking is lobbying and other polit

Question 20

-The above figure shows the U.S.market for wheat.With international trade,the gain in total surplus is equal to ________.

Accepted Answer

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

If the United States negotiates a voluntary export restraint with international sugar producing nations,then

The country with a comparative advantage in the production of a good has a

The national security argument is used by those who assert they want to

-The above figure shows the U.S.market for wheat.When there is no international trade,consumer surplus is equal to ________.

-The above figure shows the U.S.market for flip-flops.With international trade,the United States imports ________ flip-flops.

The difference between a tariff and a quota is that the revenue from the tariff goes to the

A country exports the goods

-The above figure shows the U.S.market for flip-flops.When there is no international trade,the U.S.price is per flip-flop and the U.S.quantity is flip-flops.

Suppose the world price of a shirt is $10.If the United States imposes a tariff of $5 a shirt,then the price of a shirt in the

When a country exports a good,the country's producer surplus ,consumer surplus ,and the country from the trade.

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

While high-paid American workers fear competition with low-paid foreign workers,low-paid foreign workers fear competition with high-paid American workers.Why?

A quota is a

-In the figure above,with international trade U.S.consumers buy million T-shirts per year at per T-shirt.

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to batteries per year.When a $2 tariff is in place,U.S.production is equal to batteries per year.

What is the dumping argument for protection from international trade?

What is "rent seeking"? How does it apply to restricting imports?

-The above figure shows the U.S.market for wheat.With international trade,the gain in total surplus is equal to ________.

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

If the United States negotiates a voluntary export restraint with international sugar producing nations,then

The country with a comparative advantage in the production of a good has a

The national security argument is used by those who assert they want to

-The above figure shows the U.S.market for wheat.When there is no international trade,consumer surplus is equal to ________.

-The above figure shows the U.S.market for flip-flops.With international trade,the United States imports ________ flip-flops.

The difference between a tariff and a quota is that the revenue from the tariff goes to the

A country exports the goods

-The above figure shows the U.S.market for flip-flops.When there is no international trade,the U.S.price is ________ per flip-flop and the U.S.quantity is ________ flip-flops.

Suppose the world price of a shirt is $10.If the United States imposes a tariff of $5 a shirt,then the price of a shirt in the

When a country exports a good,the country's producer surplus ________,consumer surplus ________,and the country ________ from the trade.

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

While high-paid American workers fear competition with low-paid foreign workers,low-paid foreign workers fear competition with high-paid American workers.Why?

A quota is a

-In the figure above,with international trade U.S.consumers buy ________ million T-shirts per year at ________ per T-shirt.

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to ________ batteries per year.When a $2 tariff is in place,U.S.production is equal to ________ batteries per year.

What is the dumping argument for protection from international trade?

What is "rent seeking"? How does it apply to restricting imports?

-The above figure shows the U.S.market for wheat.With international trade,the gain in total surplus is equal to ________.

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

-The above figure shows the U.S.market for flip-flops.When there is no international trade,the U.S.price is per flip-flop and the U.S.quantity is flip-flops.

When a country exports a good,the country's producer surplus ,consumer surplus ,and the country from the trade.

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

-In the figure above,with international trade U.S.consumers buy million T-shirts per year at per T-shirt.

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to batteries per year.When a $2 tariff is in place,U.S.production is equal to batteries per year.