Exam 7: Global Markets in Action

Canada produces both lumber and wine. Canada exports lumber and imports wine. The rest of the world imports Canadian lumber and exports wine to Canada. Canada has a comparative advantage in producing ________. The rest of the world has a comparative advantage in producing ________.

Table 7.2.1 -Table 7.2.1 shows a country's demand and supply schedules. Based on Table 7.2.1, suppose the world price is $4 a unit. The country

Use the information below to answer the following questions. Fact 7.3.2 With free trade between Australia and Canada, Australia would export beef to Canada. But Canada imposes an import quota on Australian beef. -Refer to Fact 7.3.2. If Canada imposes an import quota on Australian beef, the price that Canadian consumers pay for beef will ________ and the quantity of beef produced in Canada will ________.

Dumping occurs when a foreign firm

A tariff is a tax that is imposed by the ________ country when an ________ good crosses its international boundary.

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

In a market that moves from a situation of no trade to a situation where a good is imported, in the importing country the price of the good ________, and producer surplus ________.

Consider a country that sells some of its goods as exports. Who does NOT benefit?

Table 7.1.1 Glazeland's Doughnut Market -Table 7.1.1 shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.60 a doughnut then Glazeland will produce ________ doughnuts and will ________ doughnuts.

A tariff on watches which are imported by Atlantis ________ the price of watches in Atlantis and ________.

Increasing a tariff ________ the domestic quantity consumed of the good and ________ the domestic production of the good.

Use the information below to answer the following questions. Fact 7.3.1 Before 1995, trade between Canada and Mexico was subject to tariffs. In 1995, Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed. -Refer to Fact 7.3.1. The quantity of Canadian exports to Mexico has ________, and the Canadian government's tariff revenue from trade with Mexico has ________.

Refer to the figure below to answer the following questions. Figure 7.2.2 The figure shows the market for helicopters in Canada, where D is the domestic demand curve and S is the domestic supply curve. Canada trades helicopters with the rest of the world at a price of $36 million per helicopter. -In Figure 7.2.2, Canada ________ helicopters per year.

An import quota is

Refer to the figure below to answer the following questions. Figure 7.2.1 The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In Figure 7.2.1, with international trade, Canadians buy ________ million shirts per year.

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1. The tariff ________ the domestic production of shirts in Canada by ________ per year.

A country opens up to trade. In an export industry, surplus has been redistributed from

Refer to the figure below to answer the following question. Figure 7.3.2 -Refer to Figure 7.3.2. The supply of peanuts in Canada is made up of Canadian grown peanuts and imported peanuts. Initially, Canada engages in free trade in the peanut market. Then Canada puts a quota on peanut imports. The graph shows the Canadian market for peanuts when the Canadian government puts a quota on peanut imports. The Canadian consumer surplus that is redistributed to Canadian producers is ________ and the quota creates a deadweight loss equal to ________.