Question 1

When protection is encouraged to protect a growing domestic industry; which of the following is being used?

Accepted Answer

A) Save domestic jobs argument 
B) National security argument 
C) Anti-dumping argument 
D) Infant-industry argument 
E) Diversity and stability argument 
A) Save domestic jobs argument 
B) National security argument 
C) Anti-dumping argument 
D) Infant-industry argument 
E) Diversity and stability argument

Question 2

-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 3

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations.However, are there any losers from such a policy change?

Accepted Answer

Yes, there are losers from opening up to

Question 4

How does a tariff affect the consumer surplus and the producer surplus from the imported good? Is the overall economy helped or harmed by tariffs? Briefly explain your answers.

Accepted Answer

A tariff raises the price of the good so

Question 5

Suppose the United States subsidizes domestic chicken production and then sells surpluses on the world market at a price below the cost of production.In foreign countries, the argument that would made to restrict chicken trade with the United States would be the

Accepted Answer

A) penalizes lax environmental standards argument. 
B) saves jobs argument. 
C) infant-industry argument. 
D) dumping argument. 
E) national security argument. 
A) penalizes lax environmental standards argument. 
B) saves jobs argument. 
C) infant-industry argument. 
D) dumping argument. 
E) national security argument.

Question 6

Who gains from imports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from imports?

Accepted Answer

Consumers of the good being imported gai

Question 7

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade, the equilibrium price is ________ per battery and when there is international trade the equilibrium price is ________ per battery.

Accepted Answer

A) $16; $14 
B) $14; $12 
C) $12; $14 
D) $12; $16 
E) $16; $12 
A) $16; $14 
B) $14; $12 
C) $12; $14 
D) $12; $16 
E) $16; $12

Question 8

When politicians debated the North American Free Trade Agreement (NAFTA), some told stories of U.S.workers whose jobs would be moved to Mexico.Which of the following arguments in favor of protection was being used?

Accepted Answer

A) Save domestic jobs argument 
B) National security argument 
C) Anti-dumping argument 
D) Infant-industry argument 
E) Diversity and stability argument 
A) Save domestic jobs argument 
B) National security argument 
C) Anti-dumping argument 
D) Infant-industry argument 
E) Diversity and stability argument

Question 9

Relative to free trade, domestic producers of a good are _______ off with a tariff because of the ________ .

Accepted Answer

A) better; higher price and greater quantity sold 
B) better; higher price and smaller quantity sold 
C) better; lower price and greater quantity sold 
D) worse; lower price and smaller quantity sold 
E) worse; higher price and greater quantity sold 
A) better; higher price and greater quantity sold 
B) better; higher price and smaller quantity sold 
C) better; lower price and greater quantity sold 
D) worse; lower price and smaller quantity sold 
E) worse; higher price and greater quantity sold

Question 10

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A, then Country A will ________ corn, which will ________ consumer surplus, ________ producer surplus, and ________ total surplus.

Accepted Answer

A) import; increase; decrease; increase 
B) import; decrease; increase; increase 
C) export; increase; decrease; increase 
D) export; decrease; increase; increase 
E) export; decrease; increase; decrease 
A) import; increase; decrease; increase 
B) import; decrease; increase; increase 
C) export; increase; decrease; increase 
D) export; decrease; increase; increase 
E) export; decrease; increase; decrease

Question 11

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, how many pounds of cherries would U.S.farmers produce?

Accepted Answer

A) 200,000 pounds 
B) 400,000 pounds 
C) 600,000 pounds 
D) 800,000 pounds 
E) 0 pounds 
A) 200,000 pounds 
B) 400,000 pounds 
C) 600,000 pounds 
D) 800,000 pounds 
E) 0 pounds

Question 12

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

Accepted Answer

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

Question 13

-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 14

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 15

How do exports affect sellers' producer surplus?

Accepted Answer

Producer surplus increases.It

Question 16

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade, the United States imports ________ batteries and once the tariff illustrated in the figure is imposed, the United States imports ________ batteries.

Accepted Answer

A) 900,000; 700,000 
B) 800,000; 400,000 
C) 300,000; 100,000 
D) 700,000; 300,000 
E) 900,000; 100,000 
A) 900,000; 700,000 
B) 800,000; 400,000 
C) 300,000; 100,000 
D) 700,000; 300,000 
E) 900,000; 100,000

Question 17

Airlines in other countries buy airplanes from Boeing because

Accepted Answer

A) it is illegal to produce airplanes in many other countries. 
B) Boeing's prices are less than what the airlines would pay for planes built in their own country. 
C) trade treaties require such purchases. 
D) these nations must buy something from the United States. 
E) None of the above answers is correct. 
A) it is illegal to produce airplanes in many other countries. 
B) Boeing's prices are less than what the airlines would pay for planes built in their own country. 
C) trade treaties require such purchases. 
D) these nations must buy something from the United States. 
E) None of the above answers is correct.

Question 18

The figure above shows the U.S. market for airplanes, where SUS is the domestic supply curve and DUS is the domestic demand curve. The United States trades freely with the rest of the world. The world price of an airplane is $150 million.
-In the figure above, U.S.consumers buy ________ airplanes per year at ________ million per airplane.

Accepted Answer

A) 200; $150 
B) 400; $100 
C) 700; $150 
D) 400; $150 
E) 200; $100 
A) 200; $150 
B) 400; $100 
C) 700; $150 
D) 400; $150 
E) 200; $100

Question 19

-The above figure shows the U.S.market for 1 carat diamonds.With free trade, U.S.production of diamonds is equal to ________ diamonds.When the quota illustrated in the figure is in place, U.S.production is equal to ________ diamonds.

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 20

If the United States exports planes to Brazil and imports ethanol from Brazil, the price received by U.S.producers of planes ________ and the price received by Brazilian producers of ethanol ________.

Accepted Answer

A) does not change; does not change 
B) rises; rises 
C) rises; falls 
D) falls; rises 
E) falls; falls 
A) does not change; does not change 
B) rises; rises 
C) rises; falls 
D) falls; rises 
E) falls; falls

When protection is encouraged to protect a growing domestic industry; which of the following is being used?

-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.

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations.However, are there any losers from such a policy change?

How does a tariff affect the consumer surplus and the producer surplus from the imported good? Is the overall economy helped or harmed by tariffs? Briefly explain your answers.

Suppose the United States subsidizes domestic chicken production and then sells surpluses on the world market at a price below the cost of production.In foreign countries, the argument that would made to restrict chicken trade with the United States would be the

Who gains from imports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from imports?

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade, the equilibrium price is per battery and when there is international trade the equilibrium price is per battery.

When politicians debated the North American Free Trade Agreement (NAFTA), some told stories of U.S.workers whose jobs would be moved to Mexico.Which of the following arguments in favor of protection was being used?

Relative to free trade, domestic producers of a good are _ off with a tariff because of the __ .

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A, then Country A will corn, which will consumer surplus, producer surplus, and total surplus.

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, how many pounds of cherries would U.S.farmers produce?

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

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

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

How do exports affect sellers' producer surplus?

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade, the United States imports batteries and once the tariff illustrated in the figure is imposed, the United States imports batteries.

Airlines in other countries buy airplanes from Boeing because

-The above figure shows the U.S.market for 1 carat diamonds.With free trade, U.S.production of diamonds is equal to diamonds.When the quota illustrated in the figure is in place, U.S.production is equal to diamonds.

If the United States exports planes to Brazil and imports ethanol from Brazil, the price received by U.S.producers of planes and the price received by Brazilian producers of ethanol .

Getting Started

The Usand 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

When protection is encouraged to protect a growing domestic industry; which of the following is being used?

-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.

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations.However, are there any losers from such a policy change?

How does a tariff affect the consumer surplus and the producer surplus from the imported good? Is the overall economy helped or harmed by tariffs? Briefly explain your answers.

Suppose the United States subsidizes domestic chicken production and then sells surpluses on the world market at a price below the cost of production.In foreign countries, the argument that would made to restrict chicken trade with the United States would be the

Who gains from imports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from imports?

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade, the equilibrium price is ________ per battery and when there is international trade the equilibrium price is ________ per battery.

When politicians debated the North American Free Trade Agreement (NAFTA), some told stories of U.S.workers whose jobs would be moved to Mexico.Which of the following arguments in favor of protection was being used?

Relative to free trade, domestic producers of a good are _______ off with a tariff because of the ________ .

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A, then Country A will ________ corn, which will ________ consumer surplus, ________ producer surplus, and ________ total surplus.

-The figure above shows the U.S.demand and U.S.supply curves for cherries.In the absence of international trade, how many pounds of cherries would U.S.farmers produce?

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

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

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

How do exports affect sellers' producer surplus?

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade, the United States imports ________ batteries and once the tariff illustrated in the figure is imposed, the United States imports ________ batteries.

Airlines in other countries buy airplanes from Boeing because

-The above figure shows the U.S.market for 1 carat diamonds.With free trade, U.S.production of diamonds is equal to ________ diamonds.When the quota illustrated in the figure is in place, U.S.production is equal to ________ diamonds.

If the United States exports planes to Brazil and imports ethanol from Brazil, the price received by U.S.producers of planes ________ and the price received by Brazilian producers of ethanol ________.

Getting Started

The Usand 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 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.

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade, the equilibrium price is per battery and when there is international trade the equilibrium price is per battery.

Relative to free trade, domestic producers of a good are _ off with a tariff because of the __ .

If Country A opens up their corn market to trade with the rest of the world and the global price of corn is lower than the equilibrium price of corn in Country A, then Country A will corn, which will consumer surplus, producer surplus, and total surplus.

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade, the United States imports batteries and once the tariff illustrated in the figure is imposed, the United States imports batteries.

-The above figure shows the U.S.market for 1 carat diamonds.With free trade, U.S.production of diamonds is equal to diamonds.When the quota illustrated in the figure is in place, U.S.production is equal to diamonds.

If the United States exports planes to Brazil and imports ethanol from Brazil, the price received by U.S.producers of planes and the price received by Brazilian producers of ethanol .