Question 1

-The table above has the domestic demand and domestic supply schedules for a good.According to the table,the no-trade price of the good is

Accepted Answer

A) $4. 
B) $6. 
C) $8. 
D) $10. 
E) $2. 
A) $4. 
B) $6. 
C) $8. 
D) $10. 
E) $2.

Question 2

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

Accepted Answer

A) decreases. 
B) stays the same. 
C) increases. 
D) might change,but more information about what the country imports is needed to determine if production increases,decreases,or does not change. 
E) might change,but more information about what else the country exports is needed to determine if production increases,decreases,or does not change. 
A) decreases. 
B) stays the same. 
C) increases. 
D) might change,but more information about what the country imports is needed to determine if production increases,decreases,or does not change. 
E) might change,but more information about what else the country exports is needed to determine if production increases,decreases,or does not change.

Question 3

The United States imposes a tariff on foreign limes.How does the tariff affect the U.S.price of a lime and the production of limes in the United States?

Accepted Answer

The tariff raises the price of

Question 4

-The above figure shows the U.S.market for 1 carat diamonds.Suppose the United States imposes the import quota shown in the figure.With the import quota,how many diamonds can be imported?

Accepted Answer

A) 500,000 
B) 700,000 
C) 400,000 
D) 900,000 
E) 300,000 
A) 500,000 
B) 700,000 
C) 400,000 
D) 900,000 
E) 300,000

Question 5

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good ________ and domestic production of the good ________.

Accepted Answer

A) increase;increases 
B) increase;decreases 
C) decrease;increases 
D) decrease;decreases 
E) do not change;increases 
A) increase;increases 
B) increase;decreases 
C) decrease;increases 
D) decrease;decreases 
E) do not change;increases

Question 6

If the United States imposes a tariff on foreign chocolate,how are foreign producers of chocolate affected?

Accepted Answer

A) Their supply increases because they have to pay the tariff. 
B) They export less to the United States. 
C) They earn more profit because their chocolate sells for a higher price. 
D) Their supply is unaffected because the quota must be met by U.S.producers. 
E) The tariff has no effect on foreign producers because U.S.consumers must pay the higher price. 
A) Their supply increases because they have to pay the tariff. 
B) They export less to the United States. 
C) They earn more profit because their chocolate sells for a higher price. 
D) Their supply is unaffected because the quota must be met by U.S.producers. 
E) The tariff has no effect on foreign producers because U.S.consumers must pay the higher price.

Question 7

What is an effective counter against the argument that international trade should be restricted to protect domestic jobs?

Accepted Answer

A) A more effective policy would be to support the industry with subsidies. 
B) The more diversified the economy,the more stable it is. 
C) Free trade increases the number of jobs in which workers earn higher incomes. 
D) Rent seeking behavior should be encouraged. 
E) Free trade in "green" goods will increase jobs. 
A) A more effective policy would be to support the industry with subsidies. 
B) The more diversified the economy,the more stable it is. 
C) Free trade increases the number of jobs in which workers earn higher incomes. 
D) Rent seeking behavior should be encouraged. 
E) Free trade in "green" goods will increase jobs.

Question 8

In the wake of worsening relations with China,some Americans called for an increase in tariffs on Chinese products coming into America.If higher tariffs are imposed on clothing produced in China,the price of clothing in America would

Accepted Answer

A) decrease. 
B) increase. 
C) not change. 
D) first increase then decrease. 
E) first decrease then increase. 
A) decrease. 
B) increase. 
C) not change. 
D) first increase then decrease. 
E) first decrease then increase.

Question 9

Once international trade occurs,a country with a comparative advantage in the production of a good will ________ production of the good and ________.

Accepted Answer

A) decrease;import the good 
B) increase;export the good 
C) not change;import the good 
D) increase;import the good 
E) decrease;export the good 
A) decrease;import the good 
B) increase;export the good 
C) not change;import the good 
D) increase;import the good 
E) decrease;export the good

Question 10

If the United States exports planes to Brazil and imports ethanol from Brazil,the price received by U.S.producers of planes ________,and the price received by Brazilian producers of ethanol ________.

Accepted Answer

A) does not change;does not change 
B) rises;rises 
C) rises;falls 
D) falls;rises 
E) falls;falls 
A) does not change;does not change 
B) rises;rises 
C) rises;falls 
D) falls;rises 
E) falls;falls

Question 11

The fundamental force that drives trade between nations is

Accepted Answer

A) the government. 
B) NAFTA. 
C) absolute advantage. 
D) comparative advantage. 
E) legal treaties. 
A) the government. 
B) NAFTA. 
C) absolute advantage. 
D) comparative advantage. 
E) legal treaties.

Question 12

Trade is often restricted because the

Accepted Answer

A) total gain to all producers is larger than the total loss to all consumers. 
B) total gain to all producers is smaller than the total loss to all consumers. 
C) gain per producer is larger than the loss per consumer. 
D) gain per producer is less than the loss per consumer. 
E) gain per consumer is larger than the loss per producer. 
A) total gain to all producers is larger than the total loss to all consumers. 
B) total gain to all producers is smaller than the total loss to all consumers. 
C) gain per producer is larger than the loss per consumer. 
D) gain per producer is less than the loss per consumer. 
E) gain per consumer is larger than the loss per producer.

Question 13

The United States imports t-shirts from Asia.As a result,U.S.consumers pay ________ otherwise and Asian producers receive ________ otherwise.

Accepted Answer

A) a higher price than;a higher price than 
B) a higher price than;a lower price than 
C) a lower price than;a higher price than 
D) a lower price than;a lower price than 
E) the same price as;the same price as 
A) a higher price than;a higher price than 
B) a higher price than;a lower price than 
C) a lower price than;a higher price than 
D) a lower price than;a lower price than 
E) the same price as;the same price as

Question 14

-The above figure shows the U.S.market for wheat.With international trade,________ is the transfer of surplus from consumers to producers.

Accepted Answer

A) area B + area C 
B) area D 
C) area C + area F 
D) area C + area D 
E) area B + area C + area D 
A) area B + area C 
B) area D 
C) area C + area F 
D) area C + area D 
E) area B + area C + area D

Question 15

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

Accepted Answer

Rent seeking is lobbying and other polit

Question 16

The United States imports t-shirts because

Accepted Answer

A) it is a dangerous job to produce them. 
B) foreign nations have a lower opportunity cost of production. 
C) the United States has a lower opportunity cost of production. 
D) foreign economies have an absolute advantage in their production. 
E) the United States must import goods and services from other countries so that they can develop economically. 
A) it is a dangerous job to produce them. 
B) foreign nations have a lower opportunity cost of production. 
C) the United States has a lower opportunity cost of production. 
D) foreign economies have an absolute advantage in their production. 
E) the United States must import goods and services from other countries so that they can develop economically.

Question 17

The infant-industry argument for protection is based on the idea of

Accepted Answer

A) learning-by-doing. 
B) dumping. 
C) absolute advantage. 
D) quotas are the least harmful method of protecting domestic firms. 
E) saving jobs in the U.S.economy. 
A) learning-by-doing. 
B) dumping. 
C) absolute advantage. 
D) quotas are the least harmful method of protecting domestic firms. 
E) saving jobs in the U.S.economy.

Question 18

-The above figure shows the U.S.market for 1 carat diamonds.Area A is the

Accepted Answer

A) increase in producer surplus due to the import quota. 
B) importers' profit from the import quota. 
C) decrease in consumer surplus due to the import quota. 
D) deadweight loss from the import quota. 
E) gain in total surplus due to the import quota. 
A) increase in producer surplus due to the import quota. 
B) importers' profit from the import quota. 
C) decrease in consumer surplus due to the import quota. 
D) deadweight loss from the import quota. 
E) gain in total surplus due to the import quota.

Question 19

-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?

Accepted Answer

a.Domestic consumption is 8 million unit

Question 20

When a tariff is imposed on a good,the ________ increases.

Accepted Answer

A) domestic quantity purchased 
B) domestic quantity produced 
C) quantity imported 
D) quantity exported 
E) world price 
A) domestic quantity purchased 
B) domestic quantity produced 
C) quantity imported 
D) quantity exported 
E) world price

-The table above has the domestic demand and domestic supply schedules for a good.According to the table,the no-trade price of the good is

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

The United States imposes a tariff on foreign limes.How does the tariff affect the U.S.price of a lime and the production of limes in the United States?

-The above figure shows the U.S.market for 1 carat diamonds.Suppose the United States imposes the import quota shown in the figure.With the import quota,how many diamonds can be imported?

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good and domestic production of the good .

If the United States imposes a tariff on foreign chocolate,how are foreign producers of chocolate affected?

What is an effective counter against the argument that international trade should be restricted to protect domestic jobs?

In the wake of worsening relations with China,some Americans called for an increase in tariffs on Chinese products coming into America.If higher tariffs are imposed on clothing produced in China,the price of clothing in America would

Once international trade occurs,a country with a comparative advantage in the production of a good will production of the good and .

If the United States exports planes to Brazil and imports ethanol from Brazil,the price received by U.S.producers of planes ,and the price received by Brazilian producers of ethanol .

The fundamental force that drives trade between nations is

Trade is often restricted because the

The United States imports t-shirts from Asia.As a result,U.S.consumers pay otherwise and Asian producers receive otherwise.

-The above figure shows the U.S.market for wheat.With international trade,________ is the transfer of surplus from consumers to producers.

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

The United States imports t-shirts because

The infant-industry argument for protection is based on the idea of

-The above figure shows the U.S.market for 1 carat diamonds.Area A is the

When a tariff is imposed on a good,the ________ increases.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 8: Global Markets in Action

-The table above has the domestic demand and domestic supply schedules for a good.According to the table,the no-trade price of the good is

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

The United States imposes a tariff on foreign limes.How does the tariff affect the U.S.price of a lime and the production of limes in the United States?

-The above figure shows the U.S.market for 1 carat diamonds.Suppose the United States imposes the import quota shown in the figure.With the import quota,how many diamonds can be imported?

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good ________ and domestic production of the good ________.

If the United States imposes a tariff on foreign chocolate,how are foreign producers of chocolate affected?

What is an effective counter against the argument that international trade should be restricted to protect domestic jobs?

In the wake of worsening relations with China,some Americans called for an increase in tariffs on Chinese products coming into America.If higher tariffs are imposed on clothing produced in China,the price of clothing in America would

Once international trade occurs,a country with a comparative advantage in the production of a good will ________ production of the good and ________.

If the United States exports planes to Brazil and imports ethanol from Brazil,the price received by U.S.producers of planes ________,and the price received by Brazilian producers of ethanol ________.

The fundamental force that drives trade between nations is

Trade is often restricted because the

The United States imports t-shirts from Asia.As a result,U.S.consumers pay ________ otherwise and Asian producers receive ________ otherwise.

-The above figure shows the U.S.market for wheat.With international trade,________ is the transfer of surplus from consumers to producers.

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

The United States imports t-shirts because

The infant-industry argument for protection is based on the idea of

-The above figure shows the U.S.market for 1 carat diamonds.Area A is the

When a tariff is imposed on a good,the ________ increases.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

When a country exports a good because the world price is higher than the no-trade domestic price,domestic purchases of the good and domestic production of the good .

Once international trade occurs,a country with a comparative advantage in the production of a good will production of the good and .

If the United States exports planes to Brazil and imports ethanol from Brazil,the price received by U.S.producers of planes ,and the price received by Brazilian producers of ethanol .

The United States imports t-shirts from Asia.As a result,U.S.consumers pay otherwise and Asian producers receive otherwise.