Question 1

Imports are defined as the goods and services that we

Accepted Answer

A) produce and consume in the United States. 
B) sell to other countries. 
C) buy from other countries. 
D) partially produce in both the United States and another country. 
E) produce abroad using U.S. owned factories and then consume in the United States. 
A) produce and consume in the United States. 
B) sell to other countries. 
C) buy from other countries. 
D) partially produce in both the United States and another country. 
E) produce abroad using U.S. owned factories and then consume in the United States.

Question 2

One of the major reasons why the United States exports jet airplanes is because Boeing faces ________ opportunity cost compared with firms in other nations in the production of such aircraft.

Accepted Answer

A) a higher 
B) an unrelated 
C) a lower 
D) a nonexistent 
E) an identical 
A) a higher 
B) an unrelated 
C) a lower 
D) a nonexistent 
E) an identical

Question 3

What is an effective counter against the argument that international trade should be restricted to protect domestic jobs?

Accepted Answer

A) A more effective policy would be to support the industry with subsidies. 
B) The more diversified the economy, the more stable it is. 
C) Free trade increases the number of jobs in which workers earn higher incomes. 
D) Rent seeking behavior should be encouraged. 
E) Free trade in "green" goods will increase jobs. 
A) A more effective policy would be to support the industry with subsidies. 
B) The more diversified the economy, the more stable it is. 
C) Free trade increases the number of jobs in which workers earn higher incomes. 
D) Rent seeking behavior should be encouraged. 
E) Free trade in "green" goods will increase jobs.

Question 4

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 5

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 6

When the United States imposes a tariff on an imported good, the

Accepted Answer

A) price of the good in the United States falls. 
B) quantity of the good purchased in the United States decreases. 
C) quantity of the good produced in the United States decreases. 
D) outcome becomes more efficient. 
E) amount imported increases. 
A) price of the good in the United States falls. 
B) quantity of the good purchased in the United States decreases. 
C) quantity of the good produced in the United States decreases. 
D) outcome becomes more efficient. 
E) amount imported increases.

Question 7

If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry, which of the following is being used?

Accepted Answer

A) Save domestic jobs argument 
B) National security argument 
C) Dumping argument 
D) Infant-industry argument 
E) Protecting national culture argument 
A) Save domestic jobs argument 
B) National security argument 
C) Dumping argument 
D) Infant-industry argument 
E) Protecting national culture argument

Question 8

-The above figure shows the U.S.market for chocolate.With no international trade, consumer surplus is equal to ________ and producer surplus is equal to ________.

Accepted Answer

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

Question 9

If a tariff is imposed on imports of shrimp into the United States, U.S.consumer surplus from shrimp will ________ and U.S.producer 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 10

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba

Question 11

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 12

What is the national security argument for restricting international trade? What is its flaw?

Accepted Answer

The national security argument is that t

Question 13

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

Accepted Answer

A) decreases by 200 
B) increases by 300 
C) decreases by 100 
D) increases by 500 
E) increases by 200 
A) decreases by 200 
B) increases by 300 
C) decreases by 100 
D) increases by 500 
E) increases by 200

Question 14

U.S.tariffs on Canadian lumber have led to ________ production of lumber within the United States.

Accepted Answer

A) no change in 
B) an increase in 
C) the elimination of 
D) a decrease in 
E) making illegal the 
A) no change in 
B) an increase in 
C) the elimination of 
D) a decrease in 
E) making illegal the

Question 15

When a nation starts importing a good or service, domestic employment in that industry

Accepted Answer

A) decreases. 
B) stays the same. 
C) increases. 
D) might change, but more information about what else the country imports is needed to determine if employment increases, decreases, or does not change. 
E) might change, but more information about what the country exports is needed to determine if employment increases, decreases, or does not change. 
A) decreases. 
B) stays the same. 
C) increases. 
D) might change, but more information about what else the country imports is needed to determine if employment increases, decreases, or does not change. 
E) might change, but more information about what the country exports is needed to determine if employment increases, decreases, or does not change.

Question 16

A tariff makes the total economy

Accepted Answer

A) better off because it increases the domestic production of the good. 
B) better off because it decreases the deadweight loss from international trade. 
C) worse off because it creates a deadweight loss. 
D) worse off because it creates revenue for the government. 
E) worse off because it decreases both domestic consumer surplus and domestic producer surplus. 
A) better off because it increases the domestic production of the good. 
B) better off because it decreases the deadweight loss from international trade. 
C) worse off because it creates a deadweight loss. 
D) worse off because it creates revenue for the government. 
E) worse off because it decreases both domestic consumer surplus and domestic producer surplus.

Question 17

Which of the following is true?
I∙Compared to a no-trade situation, in a market with exports, consumer surplus is larger.
Ii∙Tariffs decrease consumer surplus.
Iii∙Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

Accepted Answer

A) Only i 
B) Only ii 
C) Only iii 
D) i and iii 
E) ii and iii 
A) Only i 
B) Only ii 
C) Only iii 
D) i and iii 
E) ii and iii

Question 18

If the government decides to impose a new tariff on orange juice from Brazil, the tariff would lead to ________ the tariff revenue collected by the U.S.government.

Accepted Answer

A) no change in 
B) an increase in 
C) a decrease in 
D) an elimination of 
E) making illegal 
A) no change in 
B) an increase in 
C) a decrease in 
D) an elimination of 
E) making illegal

Question 19

Of the following, who gains with a quota?

Accepted Answer

A) domestic buyers of the good or service 
B) the importer of the good or service 
C) the foreign exporter of the good or service 
D) the government of the importing nation 
E) the government of the exporting nation 
A) domestic buyers of the good or service 
B) the importer of the good or service 
C) the foreign exporter of the good or service 
D) the government of the importing nation 
E) the government of the exporting nation

Question 20

As a result of U.S.tariffs imposed on wool from New Zealand, the quantity of this wool that is imported has

Accepted Answer

A) decreased. 
B) increased a little. 
C) not changed. 
D) increased a lot. 
E) changed but whether it has increased or decreased is ambiguous. 
A) decreased. 
B) increased a little. 
C) not changed. 
D) increased a lot. 
E) changed but whether it has increased or decreased is ambiguous.

Imports are defined as the goods and services that we

One of the major reasons why the United States exports jet airplanes is because Boeing faces ________ opportunity cost compared with firms in other nations in the production of such aircraft.

What is an effective counter against the argument that international trade should be restricted to protect domestic jobs?

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 .

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

When the United States imposes a tariff on an imported good, the

If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry, which of the following is being used?

-The above figure shows the U.S.market for chocolate.With no international trade, consumer surplus is equal to and producer surplus is equal to .

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

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

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

What is the national security argument for restricting international trade? What is its flaw?

U.S.tariffs on Canadian lumber have led to ________ production of lumber within the United States.

When a nation starts importing a good or service, domestic employment in that industry

A tariff makes the total economy

If the government decides to impose a new tariff on orange juice from Brazil, the tariff would lead to ________ the tariff revenue collected by the U.S.government.

Of the following, who gains with a quota?

As a result of U.S.tariffs imposed on wool from New Zealand, the quantity of this wool that is imported has

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

Imports are defined as the goods and services that we

One of the major reasons why the United States exports jet airplanes is because Boeing faces ________ opportunity cost compared with firms in other nations in the production of such aircraft.

What is an effective counter against the argument that international trade should be restricted to protect domestic jobs?

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 ________.

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

When the United States imposes a tariff on an imported good, the

If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry, which of the following is being used?

-The above figure shows the U.S.market for chocolate.With no international trade, consumer surplus is equal to ________ and producer surplus is equal to ________.

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

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

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

What is the national security argument for restricting international trade? What is its flaw?

U.S.tariffs on Canadian lumber have led to ________ production of lumber within the United States.

When a nation starts importing a good or service, domestic employment in that industry

A tariff makes the total economy

If the government decides to impose a new tariff on orange juice from Brazil, the tariff would lead to ________ the tariff revenue collected by the U.S.government.

Of the following, who gains with a quota?

As a result of U.S.tariffs imposed on wool from New Zealand, the quantity of this wool that is imported has

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

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 above figure shows the U.S.market for chocolate.With no international trade, consumer surplus is equal to and producer surplus is equal to .

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

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