Question 1

-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 2

-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 3

The figure above shows the U.S. market for T-shirts, where SUS is the domestic supply curve and DUS is the domestic demand curve. The United States trades freely with the rest of the world. The world price of a T-shirt is $5.
-In the figure above,with international trade the United States ________ million T-shirts per year.

Accepted Answer

A)  imports 40 
B)  exports 40 
C)  exports 20 
D)  imports 20 
E)  imports 60 
A)  imports 40 
B)  exports 40 
C)  exports 20 
D)  imports 20 
E)  imports 60

Question 4

Looking at the average tariff rate in the United States since 1930,we see that

Accepted Answer

A)  at first tariffs declined, but have recently risen. 
B)  tariffs have trended downward for most of the period. 
C)  tariff levels have remained high, at over 50 percent throughout the period. 
D)  while we talk about free trade, tariff levels have risen over the last 30 years. 
E)  tariffs were made illegal in the United States in 1955. 
A)  at first tariffs declined, but have recently risen. 
B)  tariffs have trended downward for most of the period. 
C)  tariff levels have remained high, at over 50 percent throughout the period. 
D)  while we talk about free trade, tariff levels have risen over the last 30 years. 
E)  tariffs were made illegal in the United States in 1955.

Question 5

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

Accepted Answer

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

Question 6

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

Accepted Answer

Rent seeking is lobbying and other polit

Question 7

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

Accepted Answer

A)  rise; an increase 
B)  rise; a decrease 
C)  fall; an increase 
D)  fall; a decrease 
E)  rise; no change 
A)  rise; an increase 
B)  rise; a decrease 
C)  fall; an increase 
D)  fall; a decrease 
E)  rise; no change

Question 8

The United States

Accepted Answer

A)  needs tariffs to allow us to compete with cheap foreign labor. 
B)  does not need tariffs to allow us to compete with cheap foreign labor. 
C)  should not trade with countries that have cheap labor. 
D)  will not benefit from trade with countries that have cheap labor. 
E)  avoids trading with countries that have cheap labor. 
A)  needs tariffs to allow us to compete with cheap foreign labor. 
B)  does not need tariffs to allow us to compete with cheap foreign labor. 
C)  should not trade with countries that have cheap labor. 
D)  will not benefit from trade with countries that have cheap labor. 
E)  avoids trading with countries that have cheap labor.

Question 9

The figure above shows the U.S. market for airplanes, where SUS is the domestic supply curve and DUS is the domestic demand curve. The United States trades freely with the rest of the world. The world price of an airplane is $150 million.
-Based on the figure above,as a result of international trade,U.S.domestic production ________ airplanes per year.

Accepted Answer

A)  decreases by 200 
B)  increases by 300 
C)  decreases by 100 
D)  increases by 500 
E)  increases by 200 
A)  decreases by 200 
B)  increases by 300 
C)  decreases by 100 
D)  increases by 500 
E)  increases by 200

Question 10

Goods and services that the United States sells to other nations are called

Accepted Answer

A)  exports. 
B)  imports. 
C)  bartered goods. 
D)  exchanges. 
E)  world goods. 
A)  exports. 
B)  imports. 
C)  bartered goods. 
D)  exchanges. 
E)  world goods.

Question 11

The figure above shows the U.S. market for T-shirts, where SUS is the domestic supply curve and DUS is the domestic demand curve. The world price of a T-shirt is $5. The U.S. government imposes a $2 per unit tariff on imported T-shirts.
-The figure above shows that as a result of the tariff,producer surplus in the United States

Accepted Answer

A)  decreases by $105 million per year. 
B)  increases by $55 million per year. 
C)  decreases by $30 million per year. 
D)  decreases by $20 million per year. 
E)  remains unchanged. 
A)  decreases by $105 million per year. 
B)  increases by $55 million per year. 
C)  decreases by $30 million per year. 
D)  decreases by $20 million per year. 
E)  remains unchanged.

Question 12

A nation will export a good if its

Accepted Answer

A)  no-trade, domestic price is equal to the world price. 
B)  no-trade, domestic price is less than the world price 
C)  no-trade, domestic price is greater than the world price. 
D)  no-trade, domestic quantity is less than the world quantity. 
E)  no-trade, domestic quantity is greater than the world quantity. 
A)  no-trade, domestic price is equal to the world price. 
B)  no-trade, domestic price is less than the world price 
C)  no-trade, domestic price is greater than the world price. 
D)  no-trade, domestic quantity is less than the world quantity. 
E)  no-trade, domestic quantity is greater than the world quantity.

Question 13

How can a domestic producer determine whether or not it has a comparative advantage in the production of a good or service?

Accepted Answer

A)  It cannot. 
B)  by comparing the price it receives to the prices of other domestic producers 
C)  by comparing the price it receives to the world price 
D)  by comparing the quantity it produces to the quantity produced in the world 
E)  by comparing the total domestic quantity to the total world quantity 
A)  It cannot. 
B)  by comparing the price it receives to the prices of other domestic producers 
C)  by comparing the price it receives to the world price 
D)  by comparing the quantity it produces to the quantity produced in the world 
E)  by comparing the total domestic quantity to the total world quantity

Question 14

-The above figure shows the U.S.market for replacement cell phone batteries.Area B + area D is the

Accepted Answer

A)  tariff revenue. 
B)  decrease in consumer surplus due to the tariff. 
C)  deadweight loss from tariff. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff. 
A)  tariff revenue. 
B)  decrease in consumer surplus due to the tariff. 
C)  deadweight loss from tariff. 
D)  increase in producer surplus due to the tariff. 
E)  gain in total surplus due to the tariff.

Question 15

-The above figure shows the U.S.market for wheat.With no international trade,the price of wheat in the United States is ________ per ton.With international trade,the price of wheat in the United States is ________ per ton.

Accepted Answer

A)  $16; $14 
B)  $500; $300 
C)  $14; $16 
D)  $700; $300 
E)  $500; $700 
A)  $16; $14 
B)  $500; $300 
C)  $14; $16 
D)  $700; $300 
E)  $500; $700

Question 16

Imports are defined as the goods and services that we

Accepted Answer

A)  produce and consume in the United States. 
B)  sell to other countries. 
C)  buy from other countries. 
D)  partially produce in both the United States and another country. 
E)  produce abroad using U.S. owned factories and then consume in the United States. 
A)  produce and consume in the United States. 
B)  sell to other countries. 
C)  buy from other countries. 
D)  partially produce in both the United States and another country. 
E)  produce abroad using U.S. owned factories and then consume in the United States.

Question 17

Of the following,________ account(s)for the largest share of imports into the United States.

Accepted Answer

A)  food and drinks 
B)  clothing and footwear 
C)  crude oil 
D)  computers 
E)  chemicals 
A)  food and drinks 
B)  clothing and footwear 
C)  crude oil 
D)  computers 
E)  chemicals

Question 18

Which of the following parties benefits from an import quota but not from a tariff?

Accepted Answer

A)  the domestic government 
B)  domestic producers 
C)  domestic consumers 
D)  the person with the right to import the good 
E)  the foreign government 
A)  the domestic government 
B)  domestic producers 
C)  domestic consumers 
D)  the person with the right to import the good 
E)  the foreign government

Question 19

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

Accepted Answer

The U.S.government attempts to compensat

Question 20

A quota ________ a deadweight loss and a tariff ________ a deadweight loss.

Accepted Answer

A)  creates; creates 
B)  creates; does not create 
C)  does not create; creates 
D)  does not create; does not create 
E)  might create; might create 
A)  creates; creates 
B)  creates; does not create 
C)  does not create; creates 
D)  does not create; does not create 
E)  might create; might create

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

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

Looking at the average tariff rate in the United States since 1930,we see that

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

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

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

The United States

Goods and services that the United States sells to other nations are called

A nation will export a good if its

How can a domestic producer determine whether or not it has a comparative advantage in the production of a good or service?

-The above figure shows the U.S.market for replacement cell phone batteries.Area B + area D is the

-The above figure shows the U.S.market for wheat.With no international trade,the price of wheat in the United States is per ton.With international trade,the price of wheat in the United States is per ton.

Imports are defined as the goods and services that we

Of the following,________ account(s)for the largest share of imports into the United States.

Which of the following parties benefits from an import quota but not from a tariff?

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

A quota a deadweight loss and a tariff a deadweight loss.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 9: Global Markets in Action

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

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

Looking at the average tariff rate in the United States since 1930,we see that

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

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

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

The United States

Goods and services that the United States sells to other nations are called

A nation will export a good if its

How can a domestic producer determine whether or not it has a comparative advantage in the production of a good or service?

-The above figure shows the U.S.market for replacement cell phone batteries.Area B + area D is the

-The above figure shows the U.S.market for wheat.With no international trade,the price of wheat in the United States is ________ per ton.With international trade,the price of wheat in the United States is ________ per ton.

Imports are defined as the goods and services that we

Of the following,________ account(s)for the largest share of imports into the United States.

Which of the following parties benefits from an import quota but not from a tariff?

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

A quota ________ a deadweight loss and a tariff ________ a deadweight loss.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

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

-The above figure shows the U.S.market for wheat.With no international trade,the price of wheat in the United States is per ton.With international trade,the price of wheat in the United States is per ton.

A quota a deadweight loss and a tariff a deadweight loss.