Exam 15: International Trade Policy

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt. -In the figure above,the tariff ________ U.S.imports of shirts by ________ million shirts per year.

The winners from a tariff on imports are

A country specializes in the production of goods for which it has a comparative advantage. We find that

Suppose that elimination of tariffs on agricultural products means that 1,000 farm workers lose jobs that pay an average of $20,000 per year.At the same time,because of the importation of relatively cheaper foreign vegetables,150 million consumers save $2 per year on their grocery bills. a) What is the total income lost by farm workers because of the free trade? b) What is the total dollar amount saved by all consumers combined? c) Which is greater,the lost income or the consumer savings? Do the benefits of free trade out-weigh the costs in this simple example? d) Which group is most likely to become politically involved over the issue of removing the tariffs,the farm workers or the consumers? Why?

An import quota is

How does a tariff affect the government's revenue? How does a quota affect the government's revenue?

Tariffs and quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good.

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In the figure above,with international trade Americans buy ________ million shirts per year.

During the first 6 months of 2008,the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. What would be a potential consequence of such a trade restriction?

When a group lobbies for the prevention of free trade,the most likely reason is

Prior to international trade,if country A has a lower price of good X than does country B,then we know definitely that

-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?

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter. -In the figure above,with international trade ________ helicopters per year are produced in the United States.

How does the United States attempt to compensate losers from lower trade restrictions?

What is "rent seeking? " How does it apply to restricting imports?

Between August 2007 and July 2008,Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Because of this,we know that

An import quota is a