Exam 8: Global Markets in Action

Three arguments used to promote trade barriers are the national security argument,the infant-industry argument,and the dumping argument.Explain each of these arguments and evaluate whether each one has any flaws.

The United States

When a nation exports a good,its ________ surplus decreases,and when it imports a good,its ________ surplus decreases.

-The above figure shows the U.S.market for chocolate.With no international trade,producer surplus is equal to

Imposing a tariff on a good leads to a ________ in the price of the product and ________ in imports.

Of the following,who gains because of tariffs and why?

The two main reasons why international trade is restricted is because restricting trade means that governments can ________ and because domestic businesses ________.

-The above figure shows the U.S.market for wheat.When there is no international trade,consumer surplus is equal to ________.

Why do governments in less-developed nations impose tariffs?

Based on the figure above,as a result of international trade,consumer surplus

When a nation exports a good or service in which it has a comparative advantage,employment in that industry

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

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

A tariff makes the total economy

A tariff is a tax

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

-The above figure shows the U.S.market for wheat.With international trade,the price of wheat in the United States is ________ per ton and the United States ________ wheat.

We find that the world price of sugar is 20 cents a pound,the U.S.does not trade internationally,and the U.S.equilibrium price of sugar is 30 cents a pound.If the U.S.begins to trade internationally,the price of sugar in the U.S.________ to the world price and U.S.consumers buy ________ sugar.

-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.

-The above figure shows the U.S.market for replacement cell phone batteries.With free international trade,the United States