Question 1

The imposition of a quota ________ domestic production, ________ imports, and ________ domestic purchases.

Accepted Answer

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

Question 2

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 3

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 4

-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 5

-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 6

What is the infant-industry 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 7

The United States

Accepted Answer

A)  needs tariffs to allow us to compete with cheap foreign labor. 
B)  does not need tariffs to allow us to compete with cheap foreign labor. 
C)  should not trade with countries that have cheap labor. 
D)  will not benefit from trade with countries that have cheap labor. 
E)  avoids trading with countries that have cheap labor. 
A)  needs tariffs to allow us to compete with cheap foreign labor. 
B)  does not need tariffs to allow us to compete with cheap foreign labor. 
C)  should not trade with countries that have cheap labor. 
D)  will not benefit from trade with countries that have cheap labor. 
E)  avoids trading with countries that have cheap labor.

Question 8

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 9

As a result of importing a good, domestic producers ________ the quantity produced and the price of the good ________.

Accepted Answer

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

Question 10

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 11

How does an import quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

Accepted Answer

An import quota raises the price of the

Question 12

If an import quota is imposed on imports of shrimp into the United States, U.S.producer 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

A country with a comparative advantage in the production of a good will ________ production of the good and ________.

Accepted Answer

A)  decrease; import the good 
B)  increase; export the good 
C)  not change; import the good 
D)  increase; import the good 
E)  decrease; export the good 
A)  decrease; import the good 
B)  increase; export the good 
C)  not change; import the good 
D)  increase; import the good 
E)  decrease; export the good

Question 14

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (units per day) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (units per day) }
\end{array} \
\hline 4 & 200 & 140 \
8 & 190 & 160 \
12 & 180 & 180 \
16 & 170 & 200 \
20 & 160 & 220 \
24 & 150 & 240 \
\hline
\end{array}$$
-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

-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 16

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 17

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 18

Of the following, who is harmed by a tariff?

Accepted Answer

A)  domestic buyers of the good or service 
B)  the overall domestic economy 
C)  the foreign exporter of the good or service 
D)  domestic producers of the good or service 
E)  Both answers A and B are correct. 
A)  domestic buyers of the good or service 
B)  the overall domestic economy 
C)  the foreign exporter of the good or service 
D)  domestic producers of the good or service 
E)  Both answers A and B are correct.

Question 19

A flawed argument for protection from foreign trade is that i. tariffs save domestic jobs.
Ii) tariffs protect the national culture.
Iii) quotas bring about diversity and stability.

Accepted Answer

A)  i only. 
B)  ii only. 
C)  iii only. 
D)  i and ii. 
E)  i, ii, and iii. 
A)  i only. 
B)  ii only. 
C)  iii only. 
D)  i and ii. 
E)  i, ii, and iii.

Question 20

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

Accepted Answer

A)  The quantity of chocolate they sell decreases because U.S.consumption of chocolate decreases. 
B)  The quantity of chocolate they produce increases. 
C)  The price at which they sell their chocolate falls. 
D)  They are harmed because foreign exporters of chocolate increase their supply in response to the higher price. 
E)  They are unaffected because the quota applies to foreign producers, not to U.S.producers. 
A)  The quantity of chocolate they sell decreases because U.S.consumption of chocolate decreases. 
B)  The quantity of chocolate they produce increases. 
C)  The price at which they sell their chocolate falls. 
D)  They are harmed because foreign exporters of chocolate increase their supply in response to the higher price. 
E)  They are unaffected because the quota applies to foreign producers, not to U.S.producers.

The imposition of a quota domestic production, imports, and domestic purchases.

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

-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.

-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.

What is the infant-industry argument for protection from international trade?

The United States

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 .

As a result of importing a good, domestic producers the quantity produced and the price of the good .

A quota is a

How does an import quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

If an import quota is imposed on imports of shrimp into the United States, U.S.producer surplus from shrimp will and U.S.total surplus from shrimp will .

A country with a comparative advantage in the production of a good will production of the good and .

-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.

Airlines in other countries buy airplanes from Boeing because

A country exports the goods

Of the following, who is harmed by a tariff?

A flawed argument for protection from foreign trade is that i. tariffs save domestic jobs. Ii) tariffs protect the national culture. Iii) quotas bring about diversity and stability.

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

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Finance

Filters

Exam 18: International Trade Policy

The imposition of a quota ________ domestic production, ________ imports, and ________ domestic purchases.

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

-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.

-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.

What is the infant-industry argument for protection from international trade?

The United States

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 ________.

As a result of importing a good, domestic producers ________ the quantity produced and the price of the good ________.

A quota is a

How does an import quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

If an import quota is imposed on imports of shrimp into the United States, U.S.producer surplus from shrimp will ________ and U.S.total surplus from shrimp will ________.

A country with a comparative advantage in the production of a good will ________ production of the good and ________.

-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.

Airlines in other countries buy airplanes from Boeing because

A country exports the goods

Of the following, who is harmed by a tariff?

A flawed argument for protection from foreign trade is that i. tariffs save domestic jobs. Ii) tariffs protect the national culture. Iii) quotas bring about diversity and stability.

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

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Finance

Filters

The imposition of a quota domestic production, imports, and domestic purchases.

-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.

-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 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 .

As a result of importing a good, domestic producers the quantity produced and the price of the good .

If an import quota is imposed on imports of shrimp into the United States, U.S.producer surplus from shrimp will and U.S.total surplus from shrimp will .

A country with a comparative advantage in the production of a good will production of the good and .

-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.