Question 1

What is the dumping 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 2

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 3

After a nation starts importing a good from overseas, the domestic price of the good

Accepted Answer

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

Question 4

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 5

-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 6

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 7

Which of the following methods of restricting trade does NOT create a deadweight loss?

Accepted Answer

A) a tariff 
B) a quota 
C) a voluntary export restraint 
D) Both answers A and B are correct. 
E) None of the above answers are correct because all the methods create a deadweight loss 
A) a tariff 
B) a quota 
C) a voluntary export restraint 
D) Both answers A and B are correct. 
E) None of the above answers are correct because all the methods create a deadweight loss

Question 8

-The above figure shows the U.S. market for 1 carat diamonds. Area C is the

Accepted Answer

A) decrease in consumer surplus due to the import quota. 
B) importers' profit from the quota. 
C) deadweight loss from the import quota. 
D) increase in producer surplus due to the import quota. 
E) gain in total surplus due to the import quota. 
A) decrease in consumer surplus due to the import quota. 
B) importers' profit from the quota. 
C) deadweight loss from the import quota. 
D) increase in producer surplus due to the import quota. 
E) gain in total surplus due to the import quota.

Question 9

Of the following, who gains because of tariffs and why?

Accepted Answer

A) domestic producers of protected goods because they can sell at a higher price 
B) domestic buyers because they can be sure of buying high-quality products 
C) foreign producers because they earn more total revenue 
D) foreign government because they gain more revenue 
E) domestic buyers because they pay a lower price 
A) domestic producers of protected goods because they can sell at a higher price 
B) domestic buyers because they can be sure of buying high-quality products 
C) foreign producers because they earn more total revenue 
D) foreign government because they gain more revenue 
E) domestic buyers because they pay a lower price

Question 10

-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 11

The infant-industry argument is used by those who assert they want to

Accepted Answer

A) limit imports to protect new industries. 
B) increase exports to encourage growth of new industries. 
C) limit exports. 
D) increase imports to earn money to support new industries. 
E) encourage foreign firms to dump in the United States. 
A) limit imports to protect new industries. 
B) increase exports to encourage growth of new industries. 
C) limit exports. 
D) increase imports to earn money to support new industries. 
E) encourage foreign firms to dump in the United States.

Question 12

-The figure above shows the U.S. demand and U.S. supply curves for cherries. At a world price of $2 per pound once international trade occurs, the production of cherries in the United States will equal

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 13

-The above figure shows the U.S. market for wheat. With international trade, U.S. consumers buy ________ tons of wheat and U.S. producers produce ________ tons of wheat.

Accepted Answer

A) 700,000; 300,000 
B) 500,000; 500,000 
C) 300,000; 500,000 
D) 300,000; 700,000 
E) 500,000; 700,000 
A) 700,000; 300,000 
B) 500,000; 500,000 
C) 300,000; 500,000 
D) 300,000; 700,000 
E) 500,000; 700,000

Question 14

-The above figure shows the U.S. market for wheat. With international trade, ________ is the transfer of surplus from consumers to producers.

Accepted Answer

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

Question 15

The two main reasons why international trade is restricted is because restricting trade means that governments can ________ and because domestic businesses ________.

Accepted Answer

A) create jobs; earn profits 
B) obtain revenue; rent seek 
C) rent seek; want to dump 
D) prevent dumping; want to dump 
E) rent seek; obtain revenue 
A) create jobs; earn profits 
B) obtain revenue; rent seek 
C) rent seek; want to dump 
D) prevent dumping; want to dump 
E) rent seek; obtain revenue

Question 16

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

Accepted Answer

A) Their supply increases because they have to pay the tariff. 
B) They export less to the United States. 
C) They earn more profit because their chocolate sells for a higher price. 
D) Their supply is unaffected because the quota must be met by U.S. producers. 
E) The tariff has no effect on foreign producers because U.S. consumers must pay the higher price. 
A) Their supply increases because they have to pay the tariff. 
B) They export less to the United States. 
C) They earn more profit because their chocolate sells for a higher price. 
D) Their supply is unaffected because the quota must be met by U.S. producers. 
E) The tariff has no effect on foreign producers because U.S. consumers must pay the higher price.

Question 17

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 18

In 2002, President Bush imposed a tariff on imported steel. He did so in response to rent seeking by

Accepted Answer

A) domestic steel consumers. 
B) domestic steel producers. 
C) foreign steel consumers. 
D) foreign steel producers. 
E) foreign politicians. 
A) domestic steel consumers. 
B) domestic steel producers. 
C) foreign steel consumers. 
D) foreign steel producers. 
E) foreign politicians.

Question 19

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 20

Comparing developed and developing nations in their use of tariffs, we see that

Accepted Answer

A) the developing nations' governments get very little revenue from tariffs. 
B) both governments get large amounts of revenue from tariffs. 
C) many developing nations' governments get a large portion of their revenue from tariffs. 
D) developing nations almost never impose tariffs because they want their people to obtain goods and services at the lowest possible price. 
E) developed nations rely much more than developing nations on tariff revenue. 
A) the developing nations' governments get very little revenue from tariffs. 
B) both governments get large amounts of revenue from tariffs. 
C) many developing nations' governments get a large portion of their revenue from tariffs. 
D) developing nations almost never impose tariffs because they want their people to obtain goods and services at the lowest possible price. 
E) developed nations rely much more than developing nations on tariff revenue.

What is the dumping argument for protection from international trade?

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

After a nation starts importing a good from overseas, the domestic price of the good

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.

Airlines in other countries buy airplanes from Boeing because

Which of the following methods of restricting trade does NOT create a deadweight loss?

-The above figure shows the U.S. market for 1 carat diamonds. Area C is the

Of the following, who gains because of tariffs and why?

-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 .

The infant-industry argument is used by those who assert they want to

-The figure above shows the U.S. demand and U.S. supply curves for cherries. At a world price of $2 per pound once international trade occurs, the production of cherries in the United States will equal

-The above figure shows the U.S. market for wheat. With international trade, U.S. consumers buy tons of wheat and U.S. producers produce tons of wheat.

-The above figure shows the U.S. market for wheat. With international trade, ________ is the transfer of surplus from consumers to producers.

The two main reasons why international trade is restricted is because restricting trade means that governments can and because domestic businesses .

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

The United States

In 2002, President Bush imposed a tariff on imported steel. He did so in response to rent seeking by

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.

Comparing developed and developing nations in their use of tariffs, we see that

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 8: Global Markets in Action

What is the dumping argument for protection from international trade?

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

After a nation starts importing a good from overseas, the domestic price of the good

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.

Airlines in other countries buy airplanes from Boeing because

Which of the following methods of restricting trade does NOT create a deadweight loss?

-The above figure shows the U.S. market for 1 carat diamonds. Area C is the

Of the following, who gains because of tariffs and why?

-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 ________.

The infant-industry argument is used by those who assert they want to

-The figure above shows the U.S. demand and U.S. supply curves for cherries. At a world price of $2 per pound once international trade occurs, the production of cherries in the United States will equal

-The above figure shows the U.S. market for wheat. With international trade, U.S. consumers buy ________ tons of wheat and U.S. producers produce ________ tons of wheat.

-The above figure shows the U.S. market for wheat. With international trade, ________ is the transfer of surplus from consumers to producers.

The two main reasons why international trade is restricted is because restricting trade means that governments can ________ and because domestic businesses ________.

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

The United States

In 2002, President Bush imposed a tariff on imported steel. He did so in response to rent seeking by

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.

Comparing developed and developing nations in their use of tariffs, we see that

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

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 chocolate. With no international trade, consumer surplus is equal to and producer surplus is equal to .

-The above figure shows the U.S. market for wheat. With international trade, U.S. consumers buy tons of wheat and U.S. producers produce tons of wheat.

The two main reasons why international trade is restricted is because restricting trade means that governments can and because domestic businesses .