Question 1

Because wage rates are so low in Africa, why don't Microsoft, Cisco and other major corporations close down their American operations and move to Africa?

Accepted Answer

Wage rates must be weighed against produ

Question 2

-The above figure shows the U.S. market for replacement cell phone batteries. Suppose the U.S. government imposes the tariff illustrated in the figure. The tariff is equal to ________ and the price U.S. consumers pay ________ compared to the price paid when there was free trade.

Accepted Answer

A) $2; decreases 
B) $14; decreases 
C) $2; increases 
D) $12; increases 
E) $14; increases 
A) $2; decreases 
B) $14; decreases 
C) $2; increases 
D) $12; increases 
E) $14; increases

Question 3

Suppose the world price of widgets is $5 each. If a widget-importing country imposed a $2 per widget tariff, what price would that country's consumers pay for widgets?

Accepted Answer

A) $10 
B) $7 
C) $5 
D) $3 
E) A price that is greater than $5 and less than $7 
A) $10 
B) $7 
C) $5 
D) $3 
E) A price that is greater than $5 and less than $7

Question 4

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded Quantity supplied } \
\text { (units per day) }
\end{array} & \begin{array} { c } 
\text { (units per day) }
\end{array} \
\hline 2 & 20 & 14 \
4 & 19 & 16 \
6 & 18 & 18 \
8 & 17 & 20 \
10 & 16 & 22 \
12 & 15 & 24 \
\hline
\end{array}$$
-The table above has the domestic demand and domestic supply schedules for a good. According to the table, the no-trade price of the good is

Accepted Answer

A) $4. 
B) $6. 
C) $8. 
D) $10. 
E) $2. 
A) $4. 
B) $6. 
C) $8. 
D) $10. 
E) $2.

Question 5

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 6

When a nation exports a good, its total surplus ________, and when it imports a good, its total surplus ________.

Accepted Answer

A) increases; increases 
B) decreases; decreases 
C) increases; decreases 
D) decreases; increases 
E) does not change; does not change 
A) increases; increases 
B) decreases; decreases 
C) increases; decreases 
D) decreases; increases 
E) does not change; does not change

Question 7

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 8

A tariff is a tax

Accepted Answer

A) on an exported good. 
B) on an imported good. 
C) imposed on all traded goods. 
D) imposed on people's income. 
E) imposed on the difference between the value of the goods a firm imports and the value of the goods it exports. 
A) on an exported good. 
B) on an imported good. 
C) imposed on all traded goods. 
D) imposed on people's income. 
E) imposed on the difference between the value of the goods a firm imports and the value of the goods it exports.

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. 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 10

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 11

The argument that it is necessary to protect a new industry to enable it to grow into a mature industry that can compete in world markets is known as the

Accepted Answer

A) national security argument. 
B) diversity argument. 
C) infant-industry argument. 
D) environmental protection argument. 
E) national youth protection argument. 
A) national security argument. 
B) diversity argument. 
C) infant-industry argument. 
D) environmental protection argument. 
E) national youth protection argument.

Question 12

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 13

-The above figure shows the U.S. market for wheat. With international trade, consumer surplus is equal to ________.

Accepted Answer

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

Question 14

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 the U.S. net ________ surplus from the tariff is ________.

Accepted Answer

A) loss of; 30 million per year 
B) gain in; $20 million per year 
C) loss of; $10 million per year 
D) gain in; $55 million per year 
E) gain in; zero 
A) loss of; 30 million per year 
B) gain in; $20 million per year 
C) loss of; $10 million per year 
D) gain in; $55 million per year 
E) gain in; zero

Question 15

Relative to free trade, domestic consumers 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 16

The fundamental force that drives trade between nations is

Accepted Answer

A) the government. 
B) NAFTA. 
C) absolute advantage. 
D) comparative advantage. 
E) legal treaties. 
A) the government. 
B) NAFTA. 
C) absolute advantage. 
D) comparative advantage. 
E) legal treaties.

Question 17

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 18

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, producer surplus in the United States

Accepted Answer

A) decreases by $105 million per year. 
B) increases by $55 million per year. 
C) decreases by $30 million per year. 
D) decreases by $20 million per year. 
E) remains unchanged. 
A) decreases by $105 million per year. 
B) increases by $55 million per year. 
C) decreases by $30 million per year. 
D) decreases by $20 million per year. 
E) remains unchanged.

Question 19

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

Accepted Answer

A) increases; increases 
B) decreases; decreases 
C) increases; decreases 
D) decreases; increases 
E) does not change; increases 
A) increases; increases 
B) decreases; decreases 
C) increases; decreases 
D) decreases; increases 
E) does not change; increases

Question 20

Goods and services that the United States buys from other nations are called

Accepted Answer

A) exports. 
B) imports. 
C) bartered goods. 
D) exchanges. 
E) world goods. 
A) exports. 
B) imports. 
C) bartered goods. 
D) exchanges. 
E) world goods.

Because wage rates are so low in Africa, why don't Microsoft, Cisco and other major corporations close down their American operations and move to Africa?

-The above figure shows the U.S. market for replacement cell phone batteries. Suppose the U.S. government imposes the tariff illustrated in the figure. The tariff is equal to and the price U.S. consumers pay compared to the price paid when there was free trade.

Suppose the world price of widgets is $5 each. If a widget-importing country imposed a $2 per widget tariff, what price would that country's consumers pay for widgets?

Price (dollars per unit) Quantity demanded Quantity supplied (units per day) (units per day) 2 20 14 4 19 16 6 18 18 8 17 20 10 16 22 12 15 24 -The table above has the domestic demand and domestic supply schedules for a good. According to the table, the no-trade price of the good is

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 .

When a nation exports a good, its total surplus , and when it imports a good, its total surplus .

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.

A tariff is a tax

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 .

Of the following, who is harmed by a tariff?

The argument that it is necessary to protect a new industry to enable it to grow into a mature industry that can compete in world markets is known as the

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

-The above figure shows the U.S. market for wheat. With international trade, consumer surplus is equal to ________.

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

The fundamental force that drives trade between nations is

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.

When a nation imports a good, its consumer surplus , and its producer surplus .

Goods and services that the United States buys from other nations are called

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

Because wage rates are so low in Africa, why don't Microsoft, Cisco and other major corporations close down their American operations and move to Africa?

-The above figure shows the U.S. market for replacement cell phone batteries. Suppose the U.S. government imposes the tariff illustrated in the figure. The tariff is equal to ________ and the price U.S. consumers pay ________ compared to the price paid when there was free trade.

Suppose the world price of widgets is $5 each. If a widget-importing country imposed a $2 per widget tariff, what price would that country's consumers pay for widgets?

Price (dollars per unit) Quantity demanded Quantity supplied (units per day) (units per day) 2 20 14 4 19 16 6 18 18 8 17 20 10 16 22 12 15 24 -The table above has the domestic demand and domestic supply schedules for a good. According to the table, the no-trade price of the good is

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 ________.

When a nation exports a good, its total surplus ________, and when it imports a good, its total surplus ________.

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.

A tariff is a tax

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 ________.

Of the following, who is harmed by a tariff?

The argument that it is necessary to protect a new industry to enable it to grow into a mature industry that can compete in world markets is known as the

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

-The above figure shows the U.S. market for wheat. With international trade, consumer surplus is equal to ________.

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

The fundamental force that drives trade between nations is

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.

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

Goods and services that the United States buys from other nations are called

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. Suppose the U.S. government imposes the tariff illustrated in the figure. The tariff is equal to and the price U.S. consumers pay compared to the price paid when there was free trade.

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 .

When a nation exports a good, its total surplus , and when it imports a good, its total surplus .

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 .

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

When a nation imports a good, its consumer surplus , and its producer surplus .