Exam 9: Global Markets in Action

During the 1980s, Harley-Davidson, the American motorcycle maker asked Congress for tariff protection from large motorcycles imported from Japan.Harley-Davidson argued that their company needed protection so the company could reorganize and, after some time had passed, could become more competitive.Harley-Davidson's argument is similar to the ________ argument for protection.

When a nation exports a good, its consumer surplus ________, and its producer surplus ________.

Economists argue for free trade in export markets because

-The above figure shows the U.S.market for 1 carat diamonds.With free trade, Americans buy ________ diamonds and pay a price of ________ per diamond.

The fundamental force that generates international trade is

-The above figure shows the U.S.market for wheat.With no international trade, the price of wheat in the United States is ________ per ton.With international trade, the price of wheat in the United States is ________ per ton.

During the past 70 years, the peak average tariff rate in the United States stemmed from the

The United States

If the United States imposes a tariff on foreign chocolate, how are U.S.buyers of chocolate affected?

-The United States imports cheese from a variety of countries.The table above gives the domestic supply of, and demand for, cheese in the United States.The world price of cheese is $12 per pound, and trade is unrestricted. a∙How many pounds of cheese are consumed in the United States? b∙How many pounds of cheese are produced in the United States? c∙How many pounds of cheese are imported into the United States? If a $3 per pound tariff is imposed, d∙How many pounds of cheese are consumed in the United States? e∙How many pounds of cheese are produced in the United States? f∙How many pounds of cheese are imported into the United States? g∙How much will the U.S.government collect in tariff revenue? h∙Who benefits from the tariff? Who loses?

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

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

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 as a result of the tariff, consumer surplus in the United States

-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?

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, cherry farmers would receive ________ per pound of cherries.

As a result of importing a good, domestic consumers ________ the quantity consumed and the price of the good ________.

-Of the following, who gains from a tariff?

The ________ are hurt by importing a good.

"Tariffs today in the United States are much higher than in the past." Is the previous statement correct or incorrect?

How do imports affect sellers' producer surplus?