Exam 8: Global Markets in Action

Price (dollars per dose) Quantity supplied (thousands of doses per day) Quantity demanded (thousands of doses per day) 16 7 12 20 10 10 24 13 8 28 16 6 -Merck, an American pharmaceutical company, produces a vaccination that is used against chicken pox. The table shows the domestic demand for, and supply of, this medication, measured in thousands of doses per day. The world price of this medicine is $24 per dose. a. With no trade, what is the U.S. price and quantity of the vaccine? b. At the world price, how many doses are demanded in the United States? c. At the world price, how many doses are produced in the United States? d. At the world price, how many doses are exported?

-The above figure shows the U.S. market for replacement cell phone batteries. Area E is the

-The above figure shows the domestic supply of and domestic demand for an imported good. The world price is $15 per unit. a. At the world price of $15 per unit, what is the domestic consumption and domestic production? b. At the world price of $15 per unit, what is the quantity imported? c. If the government imposes a tariff of $5 per unit, what is the domestic consumption and domestic production? d. With the $5 per unit tariff, what is the quantity imported? e. How much revenue does the government collect with a tariff of $5 per unit?

During the 1980s, Harley-Davidson, the American motorcycle maker asked Congress for tariff protection from large motorcycles imported from Japan. Harley-Davidson argued that their company needed protection so the company could reorganize and, after some time had passed, could become more competitive. Harley-Davidson's argument is similar to the ________ argument for protection.

-The above figure shows the U.S. market for replacement cell phone batteries. With free trade, the United States imports ________ batteries and once the tariff illustrated in the figure is imposed, the United States imports ________ batteries.

-The above figure shows the U.S. market for 1 carat diamonds. The free trade, the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure, the price in the United States is equal to ________.

When a nation exports a good or service in which it has a comparative advantage, production of the good or service

-The above figure shows the U.S. market for replacement cell phone batteries. The U.S. government collects tariff revenue of ________ on each battery imported.

After a tariff is imposed, consumers must pay a price equal to the

All of the following statements about the United States are true EXCEPT:

If a quota is imposed on imports of shrimp into the United States, U.S. consumer surplus from shrimp will ________ and U.S. producer surplus from shrimp will ________.

-The figure above shows the U.S. demand and U.S. supply curves for cherries. In the absence of international trade, cherry farmers would receive ________ per pound of cherries.

Which of the following groups gain from international trade? I. producers of exported goods Ii. domestic consumers of imported goods Iii. workers in exporting firms

The argument that jobs are lost to free trade is

Who gains from exports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from exports?

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

One of the major reasons why the United States exports jet airplanes is because Boeing faces ________ opportunity cost compared with firms in other nations in the production of such aircraft.

If the United States imports purses, then the quantity of purses produced in the United States will ________ and the quantity of purses purchased by consumers in the United States will ________.

As a result of importing a good, domestic consumers ________ the quantity consumed and the price of the good ________.

A nation will import a good if its no-trade, domestic