Exam 19: International Trade

Protectionism acts to encourage trade.

Use the following to answer questions Figure: Foreign Trade 2 -(Figure: Foreign Trade 2)Refer to the figure.What is the dollar value of the consumer surplus that consumers could gain if the trade restriction were removed?

If the government eliminated tariffs:

The diagram indicates the revenue distribution of a $299 30GB Apple iPod.Most of the "non-hardware costs" are product development (e.g. ,software and R&D),but also includes advertising and retail costs.If the key industry argument has merit,what does this diagram suggest about which industries are actually key?

According to the text,in a typical month in the United States:

Reducing tariffs causes consumer surplus to increase but producer surplus to decrease.

Import trade tends to ______ domestic quantity of a good exchanged.

Use the following to answer questions Figure: International Trade 2 -(Figure: International Trade 2)Refer to the figure.At the tariff equilibrium in this figure,the quantity of imports is ______,which is ______ than at the free trade equilibrium.

The biggest retail contributor to the 1990s productivity boom was:

Figure: Consumption with and without Trade Refer to the figure.Suppose this diagram represents the market for sugar in the United States. a.What is the equilibrium price of sugar before trade? b.What is the equilibrium quantity of sugar before trade? c.What is the price of sugar after trade is allowed? d.What is the quantity of sugar imported after trade is allowed? e.What is the amount of consumer surplus before trade? f.By how much does consumer surplus increase after trade? g.What is the amount of producer surplus before trade? h.What is the amount of producer surplus after trade?

Use the following to answer questions Figure: Costs of Tariffs -(Figure: Costs of Tariffs)Refer to the figure.In the figure representing the market for leather,domestic suppliers are the high-cost producers of leather.However,import restrictions push domestic prices up to $100.Which area represents the value of wasted resources?

Which of the following statements is TRUE? I.If the United States bans the importation of bananas,consumer surplus will decrease. II.If the United States bans the importation of bananas,producer surplus will decrease. III.If the United States bans the importation of bananas,it will produce bananas at a cost exceeding their world purchase price.

Use the following to answer questions Figure: International Trade 3 -(Figure: International Trade 3)Refer to the figure.If the government in this diagram eliminates all imports with a tariff,the value of the lost gains from trade is:

Use the following to answer questions Figure: International Trade 1 -(Figure: International Trade 1)Refer to the figure.With the international trade in this figure,domestic consumption is ______ units,and ______ of those units are imported.

Use the following to answer questions Figure: Foreign Trade Market -(Figure: Foreign Trade Market)Refer to the figure.What is the dollar value of the deadweight loss created by the loss of foreign trade?

The tariff diagram illustrates that if the absolute value of the slopes of the demand and supply curves are equal,then the deadweight loss of any tariff always equals the wasted resources due to increased domestic production.

Use the following to answer questions Figure: Shirts -(Figure: Shirts)Refer to the figure.If a tariff raised the world price to $4 a shirt,how much consumer surplus would be lost?

Which of the following results from a tariff on imported goods? I.domestic production increases II.domestic consumption increases III.government revenues increase

Dividing the total tariff revenue in the trade diagram introduced in this chapter by the size of the tariff yields:

______ have a similar effect upon domestic consumption levels.