Question 1

Of the following,who is harmed by a tariff?

Accepted Answer

A)  domestic buyers of the good or service 
B)  the overall domestic economy 
C)  the foreign exporter of the good or service 
D)  domestic producers of the good or service 
E)  Both answers A and B are correct. 
A)  domestic buyers of the good or service 
B)  the overall domestic economy 
C)  the foreign exporter of the good or service 
D)  domestic producers of the good or service 
E)  Both answers A and B are correct.

Question 2

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

Accepted Answer

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

Question 3

Imports ________ consumer surplus,________ producer surplus,and ________ total surplus.

Accepted Answer

A)  decrease; decrease; decrease 
B)  increase; increase; increase 
C)  increase; decrease; decrease 
D)  increase; decrease; increase 
E)  decrease; increase; increase 
A)  decrease; decrease; decrease 
B)  increase; increase; increase 
C)  increase; decrease; decrease 
D)  increase; decrease; increase 
E)  decrease; increase; increase

Question 4

The imposition of tariffs on Korean steel has led to ________ in imports of Korean steel to the United States and ________ the price of steel in the United States.

Accepted Answer

A)  no change; raised 
B)  a decrease; raised 
C)  an increase; lowered 
D)  a decrease; no change in 
E)  an increase; raised 
A)  no change; raised 
B)  a decrease; raised 
C)  an increase; lowered 
D)  a decrease; no change in 
E)  an increase; raised

Question 5

Economists argue for free trade in import markets because

Accepted Answer

A)  all consumers and producers benefit from importing goods. 
B)  the gains to the U.S. producers outweigh the losses to the U.S. consumers. 
C)  the gains to the U.S. consumers outweigh the losses to the U.S. producers. 
D)  no one is made worse off by importing goods. 
E)  importing goods decreases total surplus. 
A)  all consumers and producers benefit from importing goods. 
B)  the gains to the U.S. producers outweigh the losses to the U.S. consumers. 
C)  the gains to the U.S. consumers outweigh the losses to the U.S. producers. 
D)  no one is made worse off by importing goods. 
E)  importing goods decreases total surplus.

Question 6

As a result of importing a good,domestic consumers ________ the quantity consumed and the price of the good ________.

Accepted Answer

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

Question 7

If a nation imports a good that can be domestically produced,what happens to the quantity consumed of the good and why?

Accepted Answer

A)  The quantity consumed increases because the market price decreases. 
B)  The quantity consumed decreases because the market price increases. 
C)  The quantity consumed remains constant because the price is unchanged. 
D)  The quantity consumed increases because the nation produces more of the good. 
E)  The quantity consumed decreases because the market price decreases. 
A)  The quantity consumed increases because the market price decreases. 
B)  The quantity consumed decreases because the market price increases. 
C)  The quantity consumed remains constant because the price is unchanged. 
D)  The quantity consumed increases because the nation produces more of the good. 
E)  The quantity consumed decreases because the market price decreases.

Question 8

After NAFTA was signed,the United States allowed more tomatoes to be imported from Mexico.What happened to the price of tomatoes in the United States when the United States allowed more tomatoes to be imported?

Accepted Answer

The price

Question 9

How do imports affect sellers' producer surplus?

Accepted Answer

Producer surplus decreases.It

Question 10

-The above figure shows the U.S.market for 1 carat diamonds.With free trade,U.S.production of diamonds is equal to ________ diamonds.When the quota illustrated in the figure is in place,U.S.production is equal to ________ diamonds.

Accepted Answer

A)  100,000; 300,000 
B)  100,000; 500,000 
C)  300,000; 100,000 
D)  300,000; 500,000 
E)  900,000; 700,000 
A)  100,000; 300,000 
B)  100,000; 500,000 
C)  300,000; 100,000 
D)  300,000; 500,000 
E)  900,000; 700,000

Question 11

Currently,the United States has a quota on the amount of sugar that is allowed to be imported into the United States.What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S.consumption and U.S.production of sugar?

Accepted Answer

If the quota is removed,the pr

Question 12

What is the infant-industry argument for protection from international trade?

Accepted Answer

A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability. 
A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability.

Question 13

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,international trade leads to

Accepted Answer

A)  a net gain in surplus of $12.5 billion. 
B)  a net loss of surplus of $12.5 billion. 
C)  a net gain in surplus of $27.5 billion. 
D)  a net loss of surplus of $15 billion. 
E)  no net gain or loss of surplus. 
A)  a net gain in surplus of $12.5 billion. 
B)  a net loss of surplus of $12.5 billion. 
C)  a net gain in surplus of $27.5 billion. 
D)  a net loss of surplus of $15 billion. 
E)  no net gain or loss of surplus.

Question 14

-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.

Accepted Answer

A)  700,000; 300,000 
B)  500,000; 500,000 
C)  300,000; 500,000 
D)  300,000; 700,000 
E)  500,000; 700,000 
A)  700,000; 300,000 
B)  500,000; 500,000 
C)  300,000; 500,000 
D)  300,000; 700,000 
E)  500,000; 700,000

Question 15

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.
-In the figure above,U.S.consumers buy ________ airplanes per year at ________ million per airplane.

Accepted Answer

A)  200; $150 
B)  400; $100 
C)  700; $150 
D)  400; $150 
E)  200; $100 
A)  200; $150 
B)  400; $100 
C)  700; $150 
D)  400; $150 
E)  200; $100

Question 16

If the United States imports purses,then the quantity of purses produced in the United States will ________ and the quantity of purses purchased by consumers in the United States will ________.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  not change; increase 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  not change; increase

Question 17

What is the dumping argument for protection from international trade?

Accepted Answer

A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability. 
A)  Domestic firms must be protected until they gain a comparative advantage. 
B)  Any firm necessary in wartime must be protected. 
C)  Foreign producers selling below cost to drive domestic firms bankrupt must be stopped. 
D)  Domestic jobs must be protected from competition from low-paid foreign workers. 
E)  Foreigners selling products in the economy limit the nation's diversity and stability.

Question 18

The difference between a tariff and a quota is that the revenue from the tariff goes to the

Accepted Answer

A)  domestic consumer. 
B)  domestic producer. 
C)  domestic government. 
D)  foreign producers. 
E)  foreign government. 
A)  domestic consumer. 
B)  domestic producer. 
C)  domestic government. 
D)  foreign producers. 
E)  foreign government.

Question 19

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

Accepted Answer

A)  consumer; total 
B)  consumer; consumer 
C)  producer; producer 
D)  producer; total 
E)  total; consumer 
A)  consumer; total 
B)  consumer; consumer 
C)  producer; producer 
D)  producer; total 
E)  total; consumer

Question 20

During the past 70 years,the peak average tariff rate in the United States stemmed from the

Accepted Answer

A)  creation of GATT in the middle of the 1940s. 
B)  Kennedy Administration in the early 1960s. 
C)  Uruguay round of GATT in the 1980s. 
D)  Smoot-Hawley Tariff Act in the early 1930s. 
E)  Clinton-Bush tariff of 2000-2001. 
A)  creation of GATT in the middle of the 1940s. 
B)  Kennedy Administration in the early 1960s. 
C)  Uruguay round of GATT in the 1980s. 
D)  Smoot-Hawley Tariff Act in the early 1930s. 
E)  Clinton-Bush tariff of 2000-2001.

Of the following,who is harmed by a tariff?

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

Imports consumer surplus, producer surplus,and total surplus.

The imposition of tariffs on Korean steel has led to in imports of Korean steel to the United States and the price of steel in the United States.

Economists argue for free trade in import markets because

As a result of importing a good,domestic consumers the quantity consumed and the price of the good .

If a nation imports a good that can be domestically produced,what happens to the quantity consumed of the good and why?

After NAFTA was signed,the United States allowed more tomatoes to be imported from Mexico.What happened to the price of tomatoes in the United States when the United States allowed more tomatoes to be imported?

How do imports affect sellers' producer surplus?

-The above figure shows the U.S.market for 1 carat diamonds.With free trade,U.S.production of diamonds is equal to diamonds.When the quota illustrated in the figure is in place,U.S.production is equal to diamonds.

Currently,the United States has a quota on the amount of sugar that is allowed to be imported into the United States.What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S.consumption and U.S.production of sugar?

What is the infant-industry argument for protection from international trade?

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,international trade leads to

-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.

If the United States imports purses,then the quantity of purses produced in the United States will and the quantity of purses purchased by consumers in the United States will .

What is the dumping argument for protection from international trade?

The difference between a tariff and a quota is that the revenue from the tariff goes to the

When a nation exports a good,its surplus increases and its surplus increases.

During the past 70 years,the peak average tariff rate in the United States stemmed from the

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

Of the following,who is harmed by a tariff?

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

Imports ________ consumer surplus,________ producer surplus,and ________ total surplus.

The imposition of tariffs on Korean steel has led to ________ in imports of Korean steel to the United States and ________ the price of steel in the United States.

Economists argue for free trade in import markets because

As a result of importing a good,domestic consumers ________ the quantity consumed and the price of the good ________.

If a nation imports a good that can be domestically produced,what happens to the quantity consumed of the good and why?

After NAFTA was signed,the United States allowed more tomatoes to be imported from Mexico.What happened to the price of tomatoes in the United States when the United States allowed more tomatoes to be imported?

How do imports affect sellers' producer surplus?

-The above figure shows the U.S.market for 1 carat diamonds.With free trade,U.S.production of diamonds is equal to ________ diamonds.When the quota illustrated in the figure is in place,U.S.production is equal to ________ diamonds.

Currently,the United States has a quota on the amount of sugar that is allowed to be imported into the United States.What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S.consumption and U.S.production of sugar?

What is the infant-industry argument for protection from international trade?

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,international trade leads to

-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.

If the United States imports purses,then the quantity of purses produced in the United States will ________ and the quantity of purses purchased by consumers in the United States will ________.

What is the dumping argument for protection from international trade?

The difference between a tariff and a quota is that the revenue from the tariff goes to the

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

During the past 70 years,the peak average tariff rate in the United States stemmed from the

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

Imports consumer surplus, producer surplus,and total surplus.

The imposition of tariffs on Korean steel has led to in imports of Korean steel to the United States and the price of steel in the United States.

As a result of importing a good,domestic consumers the quantity consumed and the price of the good .

-The above figure shows the U.S.market for 1 carat diamonds.With free trade,U.S.production of diamonds is equal to diamonds.When the quota illustrated in the figure is in place,U.S.production is equal to diamonds.

-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.

If the United States imports purses,then the quantity of purses produced in the United States will and the quantity of purses purchased by consumers in the United States will .

When a nation exports a good,its surplus increases and its surplus increases.