Question 1

When a nation exports a good,its total surplus ________,and when it imports a good,its total surplus ________.

Accepted Answer

A) increases;increases 
B) decreases;decreases 
C) increases;decreases 
D) decreases;increases 
E) does not change;does not change

Question 2

Based on the figure above,as a result of international trade,consumer surplus

Accepted Answer

A) increases by $150 million. 
B) decreases by $150 million. 
C) increases by $90 million. 
D) decreases by $90 million. 
E) remains unchanged.

Question 3

If the United States imposed a quota on the amount of salmon imported from Chile,the result would be ________ salmon prices in the United States and ________ in the quantity of salmon demanded in the United States.

Accepted Answer

A) higher;an increase 
B) higher;a decrease 
C) lower;an increase 
D) lower;a decrease 
E) higher;no change

Question 4

With no international trade,the U.S.price of wheat is lower than the world price of wheat.This indicates that the United States ________ a comparative advantage in the production of wheat and with international trade,the United States will ________ wheat.

Accepted Answer

A) has;export 
B) has;not trade 
C) has;import 
D) does not have;export 
E) might have;export

Question 5

When a nation exports a good,its consumer surplus ________,and its producer surplus ________.

Accepted Answer

A) increases;increases 
B) decreases;decreases 
C) increases;decreases 
D) decreases;increases 
E) does not change;increases

Question 6

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.

Question 7

If the United States negotiates a voluntary export restraint with international sugar producing nations,then

Accepted Answer

A) U.S.sugar buyers pay a lower price for sugar. 
B) U.S.sugar producers produce a smaller quantity. 
C) imports of sugar increase. 
D) the U.S.government collects less revenue than if it imposed a tariff on sugar. 
E) the foreign governments collect more revenue than if a tariff is imposed on sugar.

Question 8

Most t-shirts bought by Americans are made in Asia.U.S.consumers of t-shirts buy these t-shirts because

Accepted Answer

A) they pay a higher price for t-shirts made in Asia than they would for similar shirts made in the United States. 
B) they pay a lower price for t-shirts made in Asia than they would for similar shirts made in the United States. 
C) they must buy some goods or services produced in Asia. 
D) by so doing they are helping preserve U.S.jobs producing t-shirts. 
E) they know that the United States has a comparative advantage in wearing t-shirts.

Question 9

Why are the losers from free international trade not fully compensated for their losses?

Accepted Answer

A) The amount of compensation needed would bankrupt the government. 
B) The people who claim to lose are also the same ones who benefit. 
C) Identifying all losers and the size of their losses is extremely difficult. 
D) No one actually loses from international trade. 
E) The losers are foreigners.

Question 10

-The above figure shows the U.S.market for replacement cell phone batteries.The U.S.government collects tariff revenue of ________ on each battery imported.

Accepted Answer

A) $4 
B) $14 
C) $12 
D) $6 
E) $2

Question 11

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

Accepted Answer

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

Question 12

When a nation starts importing a good or service,domestic 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 imports is needed to determine if employment increases,decreases,or does not change. 
E) might change,but more information about what the country exports is needed to determine if employment increases,decreases,or does not change.

Question 13

When the United States imposes a tariff on an imported good,the

Accepted Answer

A) price of the good in the United States falls. 
B) quantity of the good purchased in the United States decreases. 
C) quantity of the good produced in the United States decreases. 
D) outcome becomes more efficient. 
E) amount imported increases.

Question 14

Which of the following is true?
I.Comparative advantage drives international trade.
Ii.Compared to a no-trade situation,in a market with imports,producer surplus is larger.
Iii.Tariffs lower the domestic price of imported goods.

Accepted Answer

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

Question 15

The United States exports a good if its no-trade U.S.price is ________ its world price.With international trade,U.S.production of the good ________ compared to the level of no-trade production.

Accepted Answer

A) higher than;does not change 
B) higher than;increases 
C) lower than;increases 
D) the same as;increases 
E) the same as;does not change

Question 16

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

Accepted Answer

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

Question 17

When a tariff is imposed on a good,domestic consumers of the good ________ and domestic producers of the good ________.

Accepted Answer

A) win;lose 
B) lose;win 
C) win;win 
D) lose;lose 
E) lose;neither win nor lose

Question 18

Based on the figure above,international trade leads to

Accepted Answer

A) a net gain of surplus of $60 million. 
B) a net loss of surplus of $60 million. 
C) a net gain of surplus of $90 million. 
D) a net loss of surplus of $90 million. 
E) no net gain or loss of surplus.

Question 19

Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations.However,are there any losers from such a policy change?

Accepted Answer

The answer of Economics demonstrates that opening up unrestricted free...

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.

Exam 8: Global Markets in Action

When a nation exports a good,its total surplus ,and when it imports a good,its total surplus .

Based on the figure above,as a result of international trade,consumer surplus

If the United States imposed a quota on the amount of salmon imported from Chile,the result would be salmon prices in the United States and in the quantity of salmon demanded in the United States.

With no international trade,the U.S.price of wheat is lower than the world price of wheat.This indicates that the United States a comparative advantage in the production of wheat and with international trade,the United States will wheat.

When a nation exports a good,its consumer surplus ,and its producer surplus .