Exam 8: Global Markets in Action

Suevania opens its doors to trade with Barvania. Barvania has a comparative advantage in the production of machinery. Hence, once trade occurs Suevania's consumers will buy ________ machinery and pay ________ before.

When the United States imports goods from the rest of the world, which of the following parties is harmed? I. domestic producers of the good Ii. domestic consumers of the good Iii. foreign producers of the good

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

If a nation imports a good that can be domestically produced, what happens to the quantity consumed of the good and why?

Country A imports 1,000 cars per month. After imposing a $50 per car tariff, imports fall to 800 cars per month. How much does Country A's government collect in tariff revenue?

-The above figure shows the U.S. market for 1 carat diamonds. Suppose the United States imposes the import quota shown in the figure. With the import quota, how many diamonds can be imported?

-The above figure shows the U.S. market for chocolate. With international trade, the gain in total surplus is equal to

8.5 Chapter Figures 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 United States trades freely with the rest of the world. The world price of a T-shirt is $5. -In the figure above, with international trade the United States ________ million T-shirts per year.

Imports ________ consumer surplus, ________ producer surplus, and ________ total surplus.

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

When a nation imports a good or service, the nation's consumer surplus ________, its producer surplus ________, and its total surplus ________.

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

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 deadweight loss from the tariff is

-The figure above shows the U.S. demand and the U.S. supply curves of canned peaches. a. In the absence of trade, what is price of canned peaches in the United States? b. In the absence of trade, what is the level of production in the United States? c. If the world price of canned peaches is $1 a can and the United States engages in trade, does the United States import or export canned peaches? d. If the world price of canned peaches is $1 a can and the United States engages in trade, what is the quantity produced in the United States and what is the quantity consumed? What is the quantity imported or exported? e. If the world price of canned peaches is $2 a can and the United States engages in trade, does the United States import or export canned peaches? f. If the world price of canned peaches is $2 a can and the United States engages in trade, what is the quantity produced in the United States and what is the quantity consumed? What is the quantity imported or exported?

When a nation starts importing a good or service, the domestic production of the good or service

8.5 Chapter Figures 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 United States trades freely with the rest of the world. The world price of a T-shirt is $5. -Based on the figure above, international trade leads to

The United States exports a good if its no-trade U.S. price is ________ its world price. With international trade, U.S. production of the good ________ compared to the level of no-trade production.

How do imports affect sellers' producer surplus?

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

Price (dollars per unit) Quantity demanded Quantity supplied (units per day) (units per day) 40 22 14 50 21 15 60 20 16 70 19 17 80 18 18 90 17 19 -The table above gives the domestic demand and supply schedules for a good. Suppose the world price of the good is $40 and the government imposes a $20 per unit tariff. How much will the government collect as tariff revenue?