Question 1

A country exports a good if

Accepted Answer

A)  it has a high opportunity cost of production. 
B)  the world price of the good is below the country's no-trade equilibrium price. 
C)  the world price of the good is above the country's no-trade equilibrium price. 
D)  the quantity demanded of the good in the country is greater than the quantity supplied at the world price. 
E)  it cannot import the good. 
A)  it has a high opportunity cost of production. 
B)  the world price of the good is below the country's no-trade equilibrium price. 
C)  the world price of the good is above the country's no-trade equilibrium price. 
D)  the quantity demanded of the good in the country is greater than the quantity supplied at the world price. 
E)  it cannot import the good.

Question 2

A quota is

Accepted Answer

A)  a tax on imports. 
B)  a specified minimum amount that must be imported. 
C)  a specified maximum amount that can be imported. 
D)  a tariff on exports. 
E)  the minimum amount that domestic firms can dump. 
A)  a tax on imports. 
B)  a specified minimum amount that must be imported. 
C)  a specified maximum amount that can be imported. 
D)  a tariff on exports. 
E)  the minimum amount that domestic firms can dump.

Question 3

After a tariff is imposed,consumers must pay a price equal to the

Accepted Answer

A)  world market price. 
B)  domestic equilibrium price when there is no trade. 
C)  world market price plus the tariff. 
D)  world market price less the tariff. 
E)  domestic equilibrium price when there is no trade plus the tariff. 
A)  world market price. 
B)  domestic equilibrium price when there is no trade. 
C)  world market price plus the tariff. 
D)  world market price less the tariff. 
E)  domestic equilibrium price when there is no trade plus the tariff.

Question 4

-The above figure shows the U.S.market for 1 carat diamonds.The free trade,the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure,the price in the United States is equal to ________.

Accepted Answer

A)  $4,000; $2,000 
B)  $2,000; $3,000 
C)  $4,000; $3,000 
D)  $2,000; $2,000 
E)  $2,000; $4,000 
A)  $4,000; $2,000 
B)  $2,000; $3,000 
C)  $4,000; $3,000 
D)  $2,000; $2,000 
E)  $2,000; $4,000

Question 5

Most t-shirts bought by Americans are made in Asia.As a result of free trade,the production of t-shirts in America

Accepted Answer

A)  has increased. 
B)  has stayed the same. 
C)  has decreased. 
D)  has been taken over by the government. 
E)  might change, but more information about what else the United States imports is needed to determine if U.S. production increased, decreased, or did not change. 
A)  has increased. 
B)  has stayed the same. 
C)  has decreased. 
D)  has been taken over by the government. 
E)  might change, but more information about what else the United States imports is needed to determine if U.S. production increased, decreased, or did not change.

Question 6

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,producer surplus

Accepted Answer

A)  increases by $15 billion. 
B)  decreases by $15 billion. 
C)  increases by $27.5 billion. 
D)  decreases by $12.5 billion. 
E)  remains unchanged. 
A)  increases by $15 billion. 
B)  decreases by $15 billion. 
C)  increases by $27.5 billion. 
D)  decreases by $12.5 billion. 
E)  remains unchanged.

Question 7

Which of the following is true?
i.Compared to a no-trade situation,in a market with exports,consumer surplus is larger.
ii.Tariffs decrease consumer surplus.
iii.Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

Accepted Answer

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

Question 8

-The figure above shows the U.S.demand and U.S.supply curves for cherries.At a world price of $2 per pound once international trade occurs,the total imports of cherries to the United States from other nations equals

Accepted Answer

A)  200,000 pounds. 
B)  400,000 pounds. 
C)  600,000 pounds. 
D)  800,000 pounds. 
E)  0 pounds. 
A)  200,000 pounds. 
B)  400,000 pounds. 
C)  600,000 pounds. 
D)  800,000 pounds. 
E)  0 pounds.

Question 9

How do imports affect buyers' consumer surplus?

Accepted Answer

Consumer surplus increases.It

Question 10

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,the United States ________ airplanes per year.

Accepted Answer

A)  imports 500 
B)  exports 500 
C)  exports 400 
D)  imports 400 
E)  exports 200 
A)  imports 500 
B)  exports 500 
C)  exports 400 
D)  imports 400 
E)  exports 200

Question 11

Briefly define a tariff and a quota.Do any of these methods restrict trade without harming domestic consumers?

Accepted Answer

Governments restrict trade through the u

Question 12

The ________ are hurt by importing a good.

Accepted Answer

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

Question 13

A nation will import a good if its no-trade,domestic

Accepted Answer

A)  price is equal to the world price. 
B)  price is less than the world price. 
C)  price is greater than the world price. 
D)  quantity is less than the world quantity. 
E)  quantity is greater than the world quantity. 
A)  price is equal to the world price. 
B)  price is less than the world price. 
C)  price is greater than the world price. 
D)  quantity is less than the world quantity. 
E)  quantity is greater than the world quantity.

Question 14

A quota is a

Accepted Answer

A)  quantitative restriction on an import imposed by the importing country. 
B)  quantitative restriction on an import imposed by the exporting country. 
C)  restriction on how much a customer can buy of a scarce good imposed by the seller. 
D)  tax that is imposed on a good when it crosses an international boundary. 
E)  trade barrier that does not harm domestic consumers of the good or service. 
A)  quantitative restriction on an import imposed by the importing country. 
B)  quantitative restriction on an import imposed by the exporting country. 
C)  restriction on how much a customer can buy of a scarce good imposed by the seller. 
D)  tax that is imposed on a good when it crosses an international boundary. 
E)  trade barrier that does not harm domestic consumers of the good or service.

Question 15

-The above figure shows the U.S.market for 1 carat diamonds.Area B + area D is the

Accepted Answer

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

Question 16

-According to the above table,the country will import the good if the world price is less than ________ and will export the good if the world price is more than ________.

Accepted Answer

A)  $4; $4 
B)  $6; $6 
C)  $8; $4 
D)  $10; $10 
E)  $4; $8 
A)  $4; $4 
B)  $6; $6 
C)  $8; $4 
D)  $10; $10 
E)  $4; $8

Question 17

What is a major reason international trade is restricted?

Accepted Answer

A)  rent seeking 
B)  to allow competition with cheap foreign labor 
C)  to save jobs 
D)  to prevent dumping 
E)  to eliminate monopolies 
A)  rent seeking 
B)  to allow competition with cheap foreign labor 
C)  to save jobs 
D)  to prevent dumping 
E)  to eliminate monopolies

Question 18

International trade benefits

Accepted Answer

A)  only the exporter. 
B)  only the importer. 
C)  both the exporter and the importer. 
D)  neither the exporter nor the importer. 
E)  the exporter at all times and sometimes also the importer. 
A)  only the exporter. 
B)  only the importer. 
C)  both the exporter and the importer. 
D)  neither the exporter nor the importer. 
E)  the exporter at all times and sometimes also the importer.

Question 19

Which of the following is true?
i.When the world price of a good is lower than the price that balances domestic supply and demand,a country gains from exporting the good.
ii.Compared to a no-trade situation,in a market with imports,consumer surplus is larger.
iii.Quotas raise the domestic price of imported goods.

Accepted Answer

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

Question 20

-The above figure shows the U.S.market for wheat.With international trade,the United States exports ________ of wheat.

Accepted Answer

A)  300,000 tons 
B)  500,000 tons 
C)  700,000 tons 
D)  400,000 tons 
E)  None of the above answers is correct because the United States imports wheat. 
A)  300,000 tons 
B)  500,000 tons 
C)  700,000 tons 
D)  400,000 tons 
E)  None of the above answers is correct because the United States imports wheat.

A country exports a good if

A quota is

After a tariff is imposed,consumers must pay a price equal to the

-The above figure shows the U.S.market for 1 carat diamonds.The free trade,the price in the United States for diamonds is equal to and with the quota illustrated in the figure,the price in the United States is equal to .

Most t-shirts bought by Americans are made in Asia.As a result of free trade,the production of t-shirts in America

Which of the following is true? i.Compared to a no-trade situation,in a market with exports,consumer surplus is larger. ii.Tariffs decrease consumer surplus. iii.Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

-The figure above shows the U.S.demand and U.S.supply curves for cherries.At a world price of $2 per pound once international trade occurs,the total imports of cherries to the United States from other nations equals

How do imports affect buyers' consumer surplus?

Briefly define a tariff and a quota.Do any of these methods restrict trade without harming domestic consumers?

The ________ are hurt by importing a good.

A nation will import a good if its no-trade,domestic

A quota is a

-The above figure shows the U.S.market for 1 carat diamonds.Area B + area D is the

-According to the above table,the country will import the good if the world price is less than and will export the good if the world price is more than .

What is a major reason international trade is restricted?

International trade benefits

-The above figure shows the U.S.market for wheat.With international trade,the United States exports ________ of wheat.

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

A country exports a good if

A quota is

After a tariff is imposed,consumers must pay a price equal to the

-The above figure shows the U.S.market for 1 carat diamonds.The free trade,the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure,the price in the United States is equal to ________.

Most t-shirts bought by Americans are made in Asia.As a result of free trade,the production of t-shirts in America

Which of the following is true? i.Compared to a no-trade situation,in a market with exports,consumer surplus is larger. ii.Tariffs decrease consumer surplus. iii.Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

-The figure above shows the U.S.demand and U.S.supply curves for cherries.At a world price of $2 per pound once international trade occurs,the total imports of cherries to the United States from other nations equals

How do imports affect buyers' consumer surplus?

Briefly define a tariff and a quota.Do any of these methods restrict trade without harming domestic consumers?

The ________ are hurt by importing a good.

A nation will import a good if its no-trade,domestic

A quota is a

-The above figure shows the U.S.market for 1 carat diamonds.Area B + area D is the

-According to the above table,the country will import the good if the world price is less than ________ and will export the good if the world price is more than ________.

What is a major reason international trade is restricted?

International trade benefits

-The above figure shows the U.S.market for wheat.With international trade,the United States exports ________ of wheat.

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

-The above figure shows the U.S.market for 1 carat diamonds.The free trade,the price in the United States for diamonds is equal to and with the quota illustrated in the figure,the price in the United States is equal to .

-According to the above table,the country will import the good if the world price is less than and will export the good if the world price is more than .