Question 1

After a tariff is imposed on a good, the price of the good

Accepted Answer

A) does not change. 
B) falls. 
C) rises. 
D) rises only if the domestic demand for the good does not change. 
E) might rise, fall, or not change depending on whether the government did or did not simultaneously impose a quota. 
A) does not change. 
B) falls. 
C) rises. 
D) rises only if the domestic demand for the good does not change. 
E) might rise, fall, or not change depending on whether the government did or did not simultaneously impose a quota.

Question 2

In the 1980s, the U.S. government forced Japanese automakers to limit their exports to the United States. The union representing the autoworkers (UAW), argued that otherwise the U.S. auto industry would have contracted. The UAW's argument is the ________ argument for protection.

Accepted Answer

A) save domestic jobs 
B) national security 
C) anti-dumping 
D) infant-industry 
E) bringing diversity and stability 
A) save domestic jobs 
B) national security 
C) anti-dumping 
D) infant-industry 
E) bringing diversity and stability

Question 3

Which of the following is true?
I. Comparative advantage drives international trade.
Ii. Compared to a no-trade situation, in a market with imports, producer surplus is larger.
Iii. Tariffs lower the domestic price of imported goods.

Accepted Answer

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

Question 4

-The above figure shows the U.S. market for 1 carat diamonds. With free trade, the United States produces ________ diamonds and imports ________ diamonds.

Accepted Answer

A) 300,000; 600,000 
B) 0; 900,000 
C) 100,000; 900,000 
D) 100,000; 800,000 
E) 500,000; 400,000 
A) 300,000; 600,000 
B) 0; 900,000 
C) 100,000; 900,000 
D) 100,000; 800,000 
E) 500,000; 400,000

Question 5

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 6

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.

Question 7

Trade is often restricted because the

Accepted Answer

A) total gain to all producers is larger than the total loss to all consumers. 
B) total gain to all producers is smaller than the total loss to all consumers. 
C) gain per producer is larger than the loss per consumer. 
D) gain per producer is less than the loss per consumer. 
E) gain per consumer is larger than the loss per producer. 
A) total gain to all producers is larger than the total loss to all consumers. 
B) total gain to all producers is smaller than the total loss to all consumers. 
C) gain per producer is larger than the loss per consumer. 
D) gain per producer is less than the loss per consumer. 
E) gain per consumer is larger than the loss per producer.

Question 8

When a nation exports 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 9

The infant-industry argument for protection is based on the idea of

Accepted Answer

A) learning-by-doing. 
B) dumping. 
C) absolute advantage. 
D) quotas are the least harmful method of protecting domestic firms. 
E) saving jobs in the U.S. economy. 
A) learning-by-doing. 
B) dumping. 
C) absolute advantage. 
D) quotas are the least harmful method of protecting domestic firms. 
E) saving jobs in the U.S. economy.

Question 10

"Tariffs today in the United States are much higher than in the past." Is the previous statement correct or incorrect?

Accepted Answer

The statement is most decidedl

Question 11

If the United States imposes a tariff on a good, then

Accepted Answer

A) domestic consumption of the good decreases. 
B) foreign consumption of the good decreases. 
C) foreign production of the good increases. 
D) domestic production of the good decreases. 
E) the government makes less revenue than it would have gained if it imposed a quota. 
A) domestic consumption of the good decreases. 
B) foreign consumption of the good decreases. 
C) foreign production of the good increases. 
D) domestic production of the good decreases. 
E) the government makes less revenue than it would have gained if it imposed a quota.

Question 12

Most t-shirts bought by Americans are made in Asia. As a result of free trade, the production of t-shirts in America has

Accepted Answer

A) increased. 
B) stayed the same. 
C) decreased. 
D) been taken over by the government. 
E) might change, but more information about what else the United States imports is needed to determine if U.S. production increased, decreased, or did not change. 
A) increased. 
B) stayed the same. 
C) decreased. 
D) been taken over by the government. 
E) might change, but more information about what else the United States imports is needed to determine if U.S. production increased, decreased, or did not change.

Question 13

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

Accepted Answer

A quota raises the price of the good bec

Question 14

Economists argue for free trade in export markets because

Accepted Answer

A) all consumers and producers benefit from exporting goods. 
B) the gains to the U.S. producers outweigh the losses to the U.S. consumers. 
C) the gains to the U.S. consumers outweigh the losses to the U.S. producers. 
D) no one is made worse off by exporting goods. 
E) exporting goods decreases total surplus. 
A) all consumers and producers benefit from exporting goods. 
B) the gains to the U.S. producers outweigh the losses to the U.S. consumers. 
C) the gains to the U.S. consumers outweigh the losses to the U.S. producers. 
D) no one is made worse off by exporting goods. 
E) exporting goods decreases total surplus.

Question 15

The agreement between the United States, Mexico, and Canada that sought to lower trade barriers is known as

Accepted Answer

A) the General Agreement on Tariffs and Trade. 
B) the North American Free Trade Agreement. 
C) the World Trade Organization. 
D) the Smoot-Hawley Tariff Act. 
E) the New World Free Trade Agreement. 
A) the General Agreement on Tariffs and Trade. 
B) the North American Free Trade Agreement. 
C) the World Trade Organization. 
D) the Smoot-Hawley Tariff Act. 
E) the New World Free Trade Agreement.

Question 16

If a nation can produce a good or service at the lowest opportunity cost, then it

Accepted Answer

A) can sell the product at a lower price than other nations. 
B) does not want to export the good because the low cost means it makes only a low profit. 
C) is best for the nation to not trade the good internationally. 
D) will definitely import the good because it can beat other countries' prices. 
E) might export or import the good, depending on whether or not it has a comparative advantage in the production of the good. 
A) can sell the product at a lower price than other nations. 
B) does not want to export the good because the low cost means it makes only a low profit. 
C) is best for the nation to not trade the good internationally. 
D) will definitely import the good because it can beat other countries' prices. 
E) might export or import the good, depending on whether or not it has a comparative advantage in the production of the good.

Question 17

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, international trade leads to

Accepted Answer

A) a net gain in surplus of $12.5 billion. 
B) a net loss of surplus of $12.5 billion. 
C) a net gain in surplus of $27.5 billion. 
D) a net loss of surplus of $15 billion. 
E) no net gain or loss of surplus. 
A) a net gain in surplus of $12.5 billion. 
B) a net loss of surplus of $12.5 billion. 
C) a net gain in surplus of $27.5 billion. 
D) a net loss of surplus of $15 billion. 
E) no net gain or loss of surplus.

Question 18

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

Accepted Answer

A) consumer; producer 
B) consumer; consumer 
C) producer; producer 
D) producer; consumer 
E) total; consumer 
A) consumer; producer 
B) consumer; consumer 
C) producer; producer 
D) producer; consumer 
E) total; consumer

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

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

After a tariff is imposed on a good, the price of the good

In the 1980s, the U.S. government forced Japanese automakers to limit their exports to the United States. The union representing the autoworkers (UAW), argued that otherwise the U.S. auto industry would have contracted. The UAW's argument is the ________ argument for protection.

Which of the following is true? I. Comparative advantage drives international trade. Ii. Compared to a no-trade situation, in a market with imports, producer surplus is larger. Iii. Tariffs lower the domestic price of imported goods.

-The above figure shows the U.S. market for 1 carat diamonds. With free trade, the United States produces diamonds and imports diamonds.

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

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

Trade is often restricted because the

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

The infant-industry argument for protection is based on the idea of

"Tariffs today in the United States are much higher than in the past." Is the previous statement correct or incorrect?

If the United States imposes a tariff on a good, then

Most t-shirts bought by Americans are made in Asia. As a result of free trade, the production of t-shirts in America has

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

Economists argue for free trade in export markets because

The agreement between the United States, Mexico, and Canada that sought to lower trade barriers is known as

If a nation can produce a good or service at the lowest opportunity cost, then it

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, international trade leads to

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

Of the following, who gains with a quota?

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

After a tariff is imposed on a good, the price of the good

In the 1980s, the U.S. government forced Japanese automakers to limit their exports to the United States. The union representing the autoworkers (UAW), argued that otherwise the U.S. auto industry would have contracted. The UAW's argument is the ________ argument for protection.

Which of the following is true? I. Comparative advantage drives international trade. Ii. Compared to a no-trade situation, in a market with imports, producer surplus is larger. Iii. Tariffs lower the domestic price of imported goods.

-The above figure shows the U.S. market for 1 carat diamonds. With free trade, the United States produces ________ diamonds and imports ________ diamonds.

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

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

Trade is often restricted because the

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

The infant-industry argument for protection is based on the idea of

"Tariffs today in the United States are much higher than in the past." Is the previous statement correct or incorrect?

If the United States imposes a tariff on a good, then

Most t-shirts bought by Americans are made in Asia. As a result of free trade, the production of t-shirts in America has

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

Economists argue for free trade in export markets because

The agreement between the United States, Mexico, and Canada that sought to lower trade barriers is known as

If a nation can produce a good or service at the lowest opportunity cost, then it

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, international trade leads to

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

Of the following, who gains with a quota?

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 1 carat diamonds. With free trade, the United States produces diamonds and imports diamonds.

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

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