Exam 18: Fiscal Policy

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

Table 18-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia cannot benefit from trade with Norway.

Table 18-2 Sarita and Gabriel own S&G Bakery. Table 18-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 18-2.Select the statement that accurately interprets the data in the table.

China has developed a comparative advantage in the production of clothing.The source of this comparative advantage is

Table 18-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 18-6.Prior to trade,what was the opportunity cost to produce 1 hat in Denmark?

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

Table 18-4 Output per Hour of Work Table 18-4 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 18-4.Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand.

Goods and services bought domestically but produced in other countries are referred to as

Table 18-2 Sarita and Gabriel own S&G Bakery. Table 18-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 18-2.Select the statement that accurately interprets the data in the table.

Free trade refers to trade between countries without government restrictions.

Figure 18-1 Suppose the government imposes a $0.50 per kilogram tariff on sugar imports. Figure 18-1 shows the demand and supply curves for sugar and the impact of this tariff. -Use Figure 18-1 to answer questions a-i. a.Following the imposition of the tariff,what is the price that domestic consumers must now pay and what is the quantity purchased? b.Calculate the value of consumer surplus with the tariff in place. c.What is the quantity supplied by domestic sugar producers with the tariff in place? d.Calculate the value of producer surplus received by Australian sugar producers with the tariff in place. e.What is the quantity of sugar imported with the tariff in place? f.What is the amount of tariff revenue collected by the government? g.The tariff has reduced consumer surplus.Calculate the loss in consumer surplus due to the tariff. h.What portion of the consumer surplus loss is redistributed to domestic producers? To the government? i.Calculate the deadweight loss due to the tariff.

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

Under autarky,consumer surplus is represented by the area

The process of countries becoming more open to foreign trade and investment is known as

Over the past several decades there has been rapid growth in international trade.This growth has been due to all except one of the following factors.Which factor has not contributed to the growth of international trade?

Table 18-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

A tariff is a numerical limit on the quantity of a good that can be imported.

Table 18-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 18-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Denmark gain compared to the 'without trade' numbers?

Table 18-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 18-6.Prior to trade,what was the opportunity cost to produce 1 hat in Belize?