Question 1

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

Accepted Answer

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

Question 2

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

Accepted Answer

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

Question 3

Because the United States has ________ advantage compared to China in producing airplanes,China can buy airplanes from the United States at a ________ opportunity cost than that at which China can produce them.

Accepted Answer

A)  comparative; lower 
B)  comparative; higher 
C)  absolute; lower 
D)  absolute; higher 
E)  None of the above because China will produce airplanes and sell them to the United States. 
A)  comparative; lower 
B)  comparative; higher 
C)  absolute; lower 
D)  absolute; higher 
E)  None of the above because China will produce airplanes and sell them to the United States.

Question 4

If a quota is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will ________ and U.S.producer surplus from shrimp will ________.

Accepted Answer

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

Question 5

Which of the following is an argument that is used for protection from free trade?
i.the national security argument
ii.the infant-industry argument
iii.the dumping argument

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 6

A country will export a good if it

Accepted Answer

A)  can sell the good to a foreigner at a higher price than the no-trade domestic price. 
B)  can sell the good to a foreigner at a lower price than the no-trade domestic price. 
C)  can dump the good on the world market. 
D)  has a high opportunity cost of production. 
E)  is impossible to import the good. 
A)  can sell the good to a foreigner at a higher price than the no-trade domestic price. 
B)  can sell the good to a foreigner at a lower price than the no-trade domestic price. 
C)  can dump the good on the world market. 
D)  has a high opportunity cost of production. 
E)  is impossible to import the good.

Question 7

If a nation can produce a good or service at the lowest opportunity cost,then it

Accepted Answer

A)  can sell the product at a lower price than other nations. 
B)  does not want to export the good because the low cost means it makes only a low profit. 
C)  is best for the nation to not trade the good internationally. 
D)  will definitely import the good because it can beat other countries' prices. 
E)  might export or import the good, depending on whether or not it has a comparative advantage in the production of the good. 
A)  can sell the product at a lower price than other nations. 
B)  does not want to export the good because the low cost means it makes only a low profit. 
C)  is best for the nation to not trade the good internationally. 
D)  will definitely import the good because it can beat other countries' prices. 
E)  might export or import the good, depending on whether or not it has a comparative advantage in the production of the good.

Question 8

-The figure above shows the U.S.demand and the U.S.supply curves of canned peaches.
a.In the absence of trade,what is price of canned peaches in the United States?
b.In the absence of trade,what is the level of production in the United States?
c.If the world price of canned peaches is $1 a can and the United States engages in trade,does the United States import or export canned peaches?
d.If the world price of canned peaches is $1 a can and the United States engages in trade,what is the quantity produced in the United States and what is the quantity consumed? What is the quantity imported or exported?
e.If the world price of canned peaches is $2 a can and the United States engages in trade,does the United States import or export canned peaches?
f.If the world price of canned peaches is $2 a can and the United States engages in trade,what is the quantity produced in the United States and what is the quantity consumed? What is the quantity imported or exported?

Accepted Answer

a.In the absence of trade,the price is $

Question 9

-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.

Accepted Answer

A)  $16; exports 
B)  $14; exports 
C)  $14; imports 
D)  $16; imports 
E)  $14; does not trade 
A)  $16; exports 
B)  $14; exports 
C)  $14; imports 
D)  $16; imports 
E)  $14; does not trade

Question 10

-The table above has the domestic demand and domestic supply schedules for a good.If the world price of the good is $10 and international trade occurs,then according to the table

Accepted Answer

A)  domestic production is higher before trade than after trade. 
B)  the country imports 16 units a day. 
C)  the country imports 6 units a day. 
D)  the country exports 6 units a day. 
E)  the country exports 22 units a day. 
A)  domestic production is higher before trade than after trade. 
B)  the country imports 16 units a day. 
C)  the country imports 6 units a day. 
D)  the country exports 6 units a day. 
E)  the country exports 22 units a day.

Question 11

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 12

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to ________ batteries per year.When a $2 tariff is in place,U.S.production is equal to ________ batteries per year.

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 13

What is the national security argument to support 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 14

-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 15

If the government decides to impose a new tariff on orange juice from Brazil,the tariff would lead to ________ the tariff revenue collected by the U.S.government.

Accepted Answer

A)  no change in 
B)  an increase in 
C)  a decrease in 
D)  an elimination of 
E)  making illegal 
A)  no change in 
B)  an increase in 
C)  a decrease in 
D)  an elimination of 
E)  making illegal

Question 16

International trade is definitely in the social interest if

Accepted Answer

A)  consumer surplus increases. 
B)  producer surplus increases. 
C)  consumer surplus does not decreases. 
D)  producer surplus does not decreases. 
E)  total surplus increases. 
A)  consumer surplus increases. 
B)  producer surplus increases. 
C)  consumer surplus does not decreases. 
D)  producer surplus does not decreases. 
E)  total surplus increases.

Question 17

-The above figure shows the U.S.market for replacement cell phone batteries.Suppose the U.S.government imposes the tariff illustrated in the figure.The tariff is equal to ________ and the price U.S.consumers pay ________ compared to the price paid when there was free trade.

Accepted Answer

A)  $2; decreases 
B)  $14; decreases 
C)  $2; increases 
D)  $12; increases 
E)  $14; increases 
A)  $2; decreases 
B)  $14; decreases 
C)  $2; increases 
D)  $12; increases 
E)  $14; increases

Question 18

Country A imports 1,000 cars per month.After imposing a $50 per car tariff,imports fall to 800 cars per month.How much does Country A's government collect in tariff revenue?

Accepted Answer

A)  $90,000 
B)  $50,000 
C)  $40,000 
D)  $10,000 
E)  $60,000 
A)  $90,000 
B)  $50,000 
C)  $40,000 
D)  $10,000 
E)  $60,000

Question 19

-The above figure shows the U.S.market for chocolate.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 D; area E 
B)  area B + area C + area D; area A + area E 
C)  area A; area E 
D)  area C + area D; area B + area E 
E)  area E; area A + area B + area C + area D 
A)  area A + area B + area C + area D; area E 
B)  area B + area C + area D; area A + area E 
C)  area A; area E 
D)  area C + area D; area B + area E 
E)  area E; area A + area B + area C + area D

Question 20

As a result of U.S.tariffs imposed on wool from New Zealand,the quantity of this wool that is imported has

Accepted Answer

A)  decreased. 
B)  increased a little. 
C)  not changed. 
D)  increased a lot. 
E)  changed but whether it has increased or decreased is ambiguous. 
A)  decreased. 
B)  increased a little. 
C)  not changed. 
D)  increased a lot. 
E)  changed but whether it has increased or decreased is ambiguous.

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

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

Because the United States has advantage compared to China in producing airplanes,China can buy airplanes from the United States at a opportunity cost than that at which China can produce them.

If a quota is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will and U.S.producer surplus from shrimp will .

Which of the following is an argument that is used for protection from free trade? i.the national security argument ii.the infant-industry argument iii.the dumping argument

A country will export a good if it

If a nation can produce a good or service at the lowest opportunity cost,then it

-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.

-The table above has the domestic demand and domestic supply schedules for a good.If the world price of the good is $10 and international trade occurs,then according to the table

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

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to batteries per year.When a $2 tariff is in place,U.S.production is equal to batteries per year.

What is the national security argument to support protection from international trade?

If the government decides to impose a new tariff on orange juice from Brazil,the tariff would lead to ________ the tariff revenue collected by the U.S.government.

International trade is definitely in the social interest if

-The above figure shows the U.S.market for replacement cell phone batteries.Suppose the U.S.government imposes the tariff illustrated in the figure.The tariff is equal to and the price U.S.consumers pay compared to the price paid when there was free trade.

Country A imports 1,000 cars per month.After imposing a $50 per car tariff,imports fall to 800 cars per month.How much does Country A's government collect in tariff revenue?

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

As a result of U.S.tariffs imposed on wool from New Zealand,the quantity of this wool that is imported has

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

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

Because the United States has ________ advantage compared to China in producing airplanes,China can buy airplanes from the United States at a ________ opportunity cost than that at which China can produce them.

If a quota is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will ________ and U.S.producer surplus from shrimp will ________.

Which of the following is an argument that is used for protection from free trade? i.the national security argument ii.the infant-industry argument iii.the dumping argument

A country will export a good if it

If a nation can produce a good or service at the lowest opportunity cost,then it

-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.

-The table above has the domestic demand and domestic supply schedules for a good.If the world price of the good is $10 and international trade occurs,then according to the table

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

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to ________ batteries per year.When a $2 tariff is in place,U.S.production is equal to ________ batteries per year.

What is the national security argument to support protection from international trade?

If the government decides to impose a new tariff on orange juice from Brazil,the tariff would lead to ________ the tariff revenue collected by the U.S.government.

International trade is definitely in the social interest if

-The above figure shows the U.S.market for replacement cell phone batteries.Suppose the U.S.government imposes the tariff illustrated in the figure.The tariff is equal to ________ and the price U.S.consumers pay ________ compared to the price paid when there was free trade.

Country A imports 1,000 cars per month.After imposing a $50 per car tariff,imports fall to 800 cars per month.How much does Country A's government collect in tariff revenue?

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

As a result of U.S.tariffs imposed on wool from New Zealand,the quantity of this wool that is imported has

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

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

Because the United States has advantage compared to China in producing airplanes,China can buy airplanes from the United States at a opportunity cost than that at which China can produce them.

If a quota is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will and U.S.producer surplus from shrimp will .

-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.

-The above figure shows the U.S.market for replacement cell phone batteries.With free trade,U.S.production is equal to batteries per year.When a $2 tariff is in place,U.S.production is equal to batteries per year.

-The above figure shows the U.S.market for replacement cell phone batteries.Suppose the U.S.government imposes the tariff illustrated in the figure.The tariff is equal to and the price U.S.consumers pay compared to the price paid when there was free trade.

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