Question 1

When governments specify the maximum amount of a good that may be imported in a given period of time,they are establishing a

Accepted Answer

A)  tariff. 
B)  quota. 
C)  dynamic tariff. 
D)  tax. 
E)  dumping limit. 
A)  tariff. 
B)  quota. 
C)  dynamic tariff. 
D)  tax. 
E)  dumping limit.

Question 2

Of the following,which group is hurt by a tariff?

Accepted Answer

A)  domestic producers of the good 
B)  foreign consumers of the good 
C)  domestic consumers of the good 
D)  domestic government 
E)  foreign government 
A)  domestic producers of the good 
B)  foreign consumers of the good 
C)  domestic consumers of the good 
D)  domestic government 
E)  foreign government

Question 3

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 4

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

Accepted Answer

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

Question 5

The world price of steel is $100 a ton.Before international trade,the price of steel in India is $60 a ton.If India begins trading internationally,the price of steel in India ________ and steel mills in India ________ the quantity they produce.

Accepted Answer

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

Question 6

-The above figure shows the U.S.market for wheat.With international trade,consumer surplus is equal to ________.

Accepted Answer

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

Question 7

How does a tariff affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

Accepted Answer

A tariff raises the price of the good.As

Question 8

-The above figure shows the U.S.market for flip-flops.With international trade,the equilibrium price in the United States is ________ and the United States ________ flip-flops.

Accepted Answer

A)  $12; imports 
B)  $12; does not trade 
C)  $12; exports 
D)  $14; imports 
E)  $14; does not trade 
A)  $12; imports 
B)  $12; does not trade 
C)  $12; exports 
D)  $14; imports 
E)  $14; does not trade

Question 9

Of the following,who gains with a quota?

Accepted Answer

A)  domestic buyers of the good or service 
B)  the importer of the good or service 
C)  the foreign exporter of the good or service 
D)  the government of the importing nation 
E)  the government of the exporting nation 
A)  domestic buyers of the good or service 
B)  the importer of the good or service 
C)  the foreign exporter of the good or service 
D)  the government of the importing nation 
E)  the government of the exporting nation

Question 10

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

Accepted Answer

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

Question 11

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba

Question 12

If the world price of a good is below the no-trade domestic price,a country

Accepted Answer

A)  will benefit from exporting the good. 
B)  will benefit from importing the good. 
C)  cannot benefit from trade. 
D)  has a comparative advantage in the production of that good. 
E)  will not engage in trade for that good. 
A)  will benefit from exporting the good. 
B)  will benefit from importing the good. 
C)  cannot benefit from trade. 
D)  has a comparative advantage in the production of that good. 
E)  will not engage in trade for that good.

Question 13

Since the mid-1970s,the average U.S.tariff rate is

Accepted Answer

A)  less than 5 percent. 
B)  between 6 percent and 15 percent. 
C)  between 16 percent and 25 percent. 
D)  between 26 percent and 35 percent. 
E)  larger than 36 percent. 
A)  less than 5 percent. 
B)  between 6 percent and 15 percent. 
C)  between 16 percent and 25 percent. 
D)  between 26 percent and 35 percent. 
E)  larger than 36 percent.

Question 14

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade,the equilibrium price is ________ per battery and when there is international trade the equilibrium price is ________ per battery.

Accepted Answer

A)  $16; $14 
B)  $14; $12 
C)  $12; $14 
D)  $12; $16 
E)  $16; $12 
A)  $16; $14 
B)  $14; $12 
C)  $12; $14 
D)  $12; $16 
E)  $16; $12

Question 15

Which of the following methods of restricting trade does NOT create a deadweight loss?

Accepted Answer

A)  a tariff 
B)  a quota 
C)  a voluntary export restraint 
D)  Both answers A and B are correct. 
E)  None of the above answers is correct because all the methods create a deadweight loss 
A)  a tariff 
B)  a quota 
C)  a voluntary export restraint 
D)  Both answers A and B are correct. 
E)  None of the above answers is correct because all the methods create a deadweight loss

Question 16

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

Accepted Answer

A)  save domestic jobs 
B)  national security 
C)  anti-dumping 
D)  infant-industry 
E)  penalizing lax environmental standards 
A)  save domestic jobs 
B)  national security 
C)  anti-dumping 
D)  infant-industry 
E)  penalizing lax environmental standards

Question 17

As a result of U.S.tariffs on fishnets produced in other nations,the quantity of fishnets purchased in the United States has

Accepted Answer

A)  not been affected. 
B)  increased. 
C)  decreased but not to zero. 
D)  fallen to zero. 
E)  probably changed, but whether it has increased or decreased is ambiguous. 
A)  not been affected. 
B)  increased. 
C)  decreased but not to zero. 
D)  fallen to zero. 
E)  probably changed, but whether it has increased or decreased is ambiguous.

Question 18

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 the government revenue from the tariff is

Accepted Answer

A)  $20 million per year. 
B)  $30 million per year. 
C)  $15 million per year. 
D)  $55 million per year. 
E)  zero. 
A)  $20 million per year. 
B)  $30 million per year. 
C)  $15 million per year. 
D)  $55 million per year. 
E)  zero.

Question 19

If the United States imposes a tariff on foreign chocolate,how are U.S.buyers of chocolate affected?

Accepted Answer

A)  The price they pay for chocolate rises. 
B)  Their demand for chocolate increases because the U.S. production chocolate increases. 
C)  The quantity they consume is unchanged. 
D)  The price they pay for chocolate falls but they consume less chocolate because less is imported. 
E)  The price they pay for chocolate falls and they consume more chocolate. 
A)  The price they pay for chocolate rises. 
B)  Their demand for chocolate increases because the U.S. production chocolate increases. 
C)  The quantity they consume is unchanged. 
D)  The price they pay for chocolate falls but they consume less chocolate because less is imported. 
E)  The price they pay for chocolate falls and they consume more chocolate.

Question 20

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.

When governments specify the maximum amount of a good that may be imported in a given period of time,they are establishing a

Of the following,which group is hurt by a tariff?

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

The world price of steel is $100 a ton.Before international trade,the price of steel in India is $60 a ton.If India begins trading internationally,the price of steel in India and steel mills in India the quantity they produce.

-The above figure shows the U.S.market for wheat.With international trade,consumer surplus is equal to ________.

How does a tariff affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

-The above figure shows the U.S.market for flip-flops.With international trade,the equilibrium price in the United States is and the United States flip-flops.

Of the following,who gains with a quota?

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

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

If the world price of a good is below the no-trade domestic price,a country

Since the mid-1970s,the average U.S.tariff rate is

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade,the equilibrium price is per battery and when there is international trade the equilibrium price is per battery.

Which of the following methods of restricting trade does NOT create a deadweight loss?

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

As a result of U.S.tariffs on fishnets produced in other nations,the quantity of fishnets purchased in the United States has

If the United States imposes a tariff on foreign chocolate,how are U.S.buyers of chocolate affected?

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

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

When governments specify the maximum amount of a good that may be imported in a given period of time,they are establishing a

Of the following,which group is hurt by a tariff?

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

The world price of steel is $100 a ton.Before international trade,the price of steel in India is $60 a ton.If India begins trading internationally,the price of steel in India ________ and steel mills in India ________ the quantity they produce.

-The above figure shows the U.S.market for wheat.With international trade,consumer surplus is equal to ________.

How does a tariff affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

-The above figure shows the U.S.market for flip-flops.With international trade,the equilibrium price in the United States is ________ and the United States ________ flip-flops.

Of the following,who gains with a quota?

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

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

If the world price of a good is below the no-trade domestic price,a country

Since the mid-1970s,the average U.S.tariff rate is

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade,the equilibrium price is ________ per battery and when there is international trade the equilibrium price is ________ per battery.

Which of the following methods of restricting trade does NOT create a deadweight loss?

In the 1950s,crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war.The rationale for this protection is the ________ argument for protection.

As a result of U.S.tariffs on fishnets produced in other nations,the quantity of fishnets purchased in the United States has

If the United States imposes a tariff on foreign chocolate,how are U.S.buyers of chocolate affected?

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

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

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 world price of steel is $100 a ton.Before international trade,the price of steel in India is $60 a ton.If India begins trading internationally,the price of steel in India and steel mills in India the quantity they produce.

-The above figure shows the U.S.market for flip-flops.With international trade,the equilibrium price in the United States is and the United States flip-flops.

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

-The above figure shows the U.S.market for replacement cell phone batteries.When there is no international trade,the equilibrium price is per battery and when there is international trade the equilibrium price is per battery.