Exam 8: Global Markets in Action

In the 1950s, crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war. The rationale for this protection is the ________ argument for protection.

The national security argument is used by those who assert they want to

A country exports a good if

After NAFTA was signed, the United States allowed more tomatoes to be imported from Mexico. What happened to the price of tomatoes in the United States when the United States allowed more tomatoes to be imported?

How does a quota affect the consumer surplus and the producer surplus from the imported good? Is the overall economy helped or harmed by quotas? Briefly explain your answers.

-The above figure shows the U.S. market for flip-flops. When there is no international trade, the U.S. price is ________ per flip-flop and the U.S. quantity is ________ flip-flops.

Price Quantity supplied (thousands of Quantity demanded (thousands of (dollars per pound) pounds per year) pounds per year) 21 120 60 18 100 100 15 80 140 12 60 180 9 40 220 -The United States imports cheese from a variety of countries. The table above gives the domestic supply of, and demand for, cheese in the United States. The world price of cheese is $12 per pound, and trade is unrestricted. a. How many pounds of cheese are consumed in the United States? b. How many pounds of cheese are produced in the United States? c. How many pounds of cheese are imported into the United States? If a $3 per pound tariff is imposed, d. How many pounds of cheese are consumed in the United States? e. How many pounds of cheese are produced in the United States? f. How many pounds of cheese are imported into the United States? g. How much will the U.S. government collect in tariff revenue? h. Who benefits from the tariff? Who loses?

When a tariff supporter argues that foreign producers are selling their products for prices below the costs of production, which of the following is being used?

The United States imports t-shirts from Asia. As a result, U.S. consumers pay ________ otherwise and Asian producers receive ________ otherwise.

-The above figure shows the U.S. market for 1 carat diamonds. Area B + area D is the

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

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

When a good is imported, the domestic production of it ________ and the domestic consumption of it ________.

International trade benefits

When a nation imports a good, its ________ surplus decreases and its ________ surplus increases.

What is a major reason international trade is restricted?

Of the following, which group is hurt by a tariff?

During the past 70 years, the peak average tariff rate in the United States stemmed from the

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

While high-paid American workers fear competition with low-paid foreign workers, low-paid foreign workers fear competition with high-paid American workers. Why?