Question 1

Which of the following is TRUE about the economic policy of"protectionism"?

Accepted Answer

A) It raises prices of foreign goods in domestic markets. 
B) It restricts competitive forces in domestic markets. 
C) It can be achieved through quotas and tariffs. 
D) All of these statements are correct. 
A) It raises prices of foreign goods in domestic markets. 
B) It restricts competitive forces in domestic markets. 
C) It can be achieved through quotas and tariffs. 
D) All of these statements are correct. D

Question 2

Protectionism protects domestic industries from thecompetitive forces exerted by foreign firms.

Accepted Answer

A) True 
 B)False  True

Question 3

Removing tariffs and quotas will ensure that goods are sold bythe low-cost producers and increase the sum of consumer andproducer surplus.

Accepted Answer

A) True 
 B)False  True

Question 4

(Figure: A Tariff on Imports) Refer to the figure. Suppose thegovernment intervenes with a $2 tariff; the total cost of thetariff to the citizens in that country is:

Accepted Answer

A) $350 million. 
B) $400 million. 
C) $550 million. 
D) $700 million. 
A) $350 million. 
B) $400 million. 
C) $550 million. 
D) $700 million.

Question 5

Trade increases competition for domestic producers andresults in lower prices of domestic goods.

Accepted Answer

A) True 
 B)False

Question 6

Economic growth requires:

Accepted Answer

A) job destruction. 
B) trade barriers. 
C) government intervention. 
D) job creation. 
A) job destruction. 
B) trade barriers. 
C) government intervention. 
D) job creation.

Question 7

Figure: Foreign Trade   (Figure: Foreign Trade) Refer to the figure. What is the dollarvalue of the consumer surplus that consumers could gain if thetrade restriction were removed?

Accepted Answer

A) $35,000 
B) $22,500 
C) $30,000 
D) $25,000 
A) $35,000 
B) $22,500 
C) $30,000 
D) $25,000

Question 8

Because of pressure from the United States, the garmentindustry in Bangladesh dismissed 30,000 to 50,000 childlaborers. This action:

Accepted Answer

A) was very beneficial, for most of the children returned to school full time. 
B) resulted in many of the children turning to prostitution, street begging, or working in jobs with even worse working
Conditions. 
C) led to a civil uprising in Bangladesh, claiming the lives of almost 4,000 of these children. 
D) None of the answers is correct. 
A) was very beneficial, for most of the children returned to school full time. 
B) resulted in many of the children turning to prostitution, street begging, or working in jobs with even worse working
Conditions. 
C) led to a civil uprising in Bangladesh, claiming the lives of almost 4,000 of these children. 
D) None of the answers is correct.

Question 9

Economic benefits to tariffs and import quotas include: morejobs in the protected industry, lower prices to consumers, andincreased gains from trade.

Accepted Answer

A) True 
 B)False

Question 10

(Figure: Foreign Trade Market) Refer to the figure. What isthe dollar value of wasted resources as a result of prohibitingtrade in this market?

Accepted Answer

A) $10,000 
B) $4,000 
C) $7,500 
D) $6,000 
A) $10,000 
B) $4,000 
C) $7,500 
D) $6,000

Question 11

(Figure: Foreign Trade) Refer to the figure. What quantitywould be traded in the absence of any international trade?

Accepted Answer

A) 600 
B) 1,400 
C) 1,000 
D) 800 
A) 600 
B) 1,400 
C) 1,000 
D) 800

Question 12

Which of the following statements is TRUE?
I. If the United States bans the importation of bananas,consumer surplus will decrease
II.If the United States bans the importation of bananas,producer surplus will decrease
III. If the United States bans the importation of bananas, itwill produce bananas at a cost exceeding their world purchaseprice.

Accepted Answer

A) I, II, and III 
B) I and II only 
C) I and III only 
D) II and III only 
A) I, II, and III 
B) I and II only 
C) I and III only 
D) II and III only

Question 13

One of the costs of protectionism is:

Accepted Answer

A) increases in total national output. 
B) a reduction in the variety of goods in domestic markets. 
C) greater competition. 
D) lower opportunity costs of domestic production. 
A) increases in total national output. 
B) a reduction in the variety of goods in domestic markets. 
C) greater competition. 
D) lower opportunity costs of domestic production.

Question 14

Figure: Foreign Trade   (Figure: Foreign Trade) Refer to the figure. What is the dollarvalue of the deadweight loss created as a result of prohibitingtrade in this market?

Accepted Answer

A) $2,500 
B) $10,000 
C) $7,500 
D) $5,000 
A) $2,500 
B) $10,000 
C) $7,500 
D) $5,000

Question 15

The U.S. government restricting the quantity of sugar importsinto the country is an example of a(n):

Accepted Answer

A) trade quota. 
B) embargo. 
C) trade settlement. 
D) market hanger. 
A) trade quota. 
B) embargo. 
C) trade settlement. 
D) market hanger.

Question 16

Why does economic growth require job destruction?

Accepted Answer

A) Economic growth requires international trade, which has been proven to cause short-term job loss. 
B) Economic growth comes from creating and producing goods that use resources more productively, causing job loss in
Industries that use out-dated technology.(True Answer
)Correct 
C) Excessive job creation can destroy economic growth. 
D) When economic growth occurs, there are not enough resources left over for worker retraining and re-education
Programs. 
A) Economic growth requires international trade, which has been proven to cause short-term job loss. 
B) Economic growth comes from creating and producing goods that use resources more productively, causing job loss in
Industries that use out-dated technology.(True Answer
)Correct 
C) Excessive job creation can destroy economic growth. 
D) When economic growth occurs, there are not enough resources left over for worker retraining and re-education
Programs.

Question 17

Which, if any, of the following conditions for efficient marketfunctioning do tariffs and quotas violate?
i. demanders with the highest willingness to pay purchase thesupply of goodsII. producers with the lowest costs produce and sell the supplyof goodsIII. the sum of consumer and producer surplus is maximized

Accepted Answer

A) I only 
B) II and III only 
C) I, II, and III 
D) III only 
A) I only 
B) II and III only 
C) I, II, and III 
D) III only

Question 18

Which of the following statements describes reasons why freetrade is beneficial for the United States?

Accepted Answer

A) Free trade increases consumer surplus for imported goods that are cheaper than U.S.goods. 
B) Free trade directs U.S.resources to those goods and services for which the United States has a comparative
Advantage. 
C) Through specialization the U.S.and its trading partners can use the same overall amount of resources to produce and
Consume a larger amount of goods. 
D) All of these statements are correct. 
A) Free trade increases consumer surplus for imported goods that are cheaper than U.S.goods. 
B) Free trade directs U.S.resources to those goods and services for which the United States has a comparative
Advantage. 
C) Through specialization the U.S.and its trading partners can use the same overall amount of resources to produce and
Consume a larger amount of goods. 
D) All of these statements are correct.

Question 19

A tariff benefits domestic producers but hurts domesticconsumers.

Accepted Answer

A) True 
 B)False

Question 20

Economists consider tariffs to be:

Accepted Answer

A) necessary. 
B) beneficial to domestic consumers. 
C) harmful to domestic producers. 
D) obstacles that reduce gains from trade.(True Answer )Correct 
A) necessary. 
B) beneficial to domestic consumers. 
C) harmful to domestic producers. 
D) obstacles that reduce gains from trade.(True Answer )Correct

Which of the following is TRUE about the economic policy of"protectionism"?

Protectionism protects domestic industries from thecompetitive forces exerted by foreign firms.

Removing tariffs and quotas will ensure that goods are sold bythe low-cost producers and increase the sum of consumer andproducer surplus.

(Figure: A Tariff on Imports) Refer to the figure. Suppose thegovernment intervenes with a $2 tariff; the total cost of thetariff to the citizens in that country is:

Trade increases competition for domestic producers andresults in lower prices of domestic goods.

Economic growth requires:

Figure: Foreign Trade (Figure: Foreign Trade) Refer to the figure. What is the dollarvalue of the consumer surplus that consumers could gain if thetrade restriction were removed?

Because of pressure from the United States, the garmentindustry in Bangladesh dismissed 30,000 to 50,000 childlaborers. This action:

Economic benefits to tariffs and import quotas include: morejobs in the protected industry, lower prices to consumers, andincreased gains from trade.

(Figure: Foreign Trade Market) Refer to the figure. What isthe dollar value of wasted resources as a result of prohibitingtrade in this market?

(Figure: Foreign Trade) Refer to the figure. What quantitywould be traded in the absence of any international trade?

One of the costs of protectionism is:

Figure: Foreign Trade (Figure: Foreign Trade) Refer to the figure. What is the dollarvalue of the deadweight loss created as a result of prohibitingtrade in this market?

The U.S. government restricting the quantity of sugar importsinto the country is an example of a(n):

Why does economic growth require job destruction?

Which of the following statements describes reasons why freetrade is beneficial for the United States?

A tariff benefits domestic producers but hurts domesticconsumers.

Economists consider tariffs to be:

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters

Exam 9: Monopoly

Which of the following is TRUE about the economic policy of"protectionism"?

Protectionism protects domestic industries from thecompetitive forces exerted by foreign firms.

Removing tariffs and quotas will ensure that goods are sold bythe low-cost producers and increase the sum of consumer andproducer surplus.

(Figure: A Tariff on Imports) Refer to the figure. Suppose thegovernment intervenes with a $2 tariff; the total cost of thetariff to the citizens in that country is:

Trade increases competition for domestic producers andresults in lower prices of domestic goods.

Economic growth requires:

Figure: Foreign Trade (Figure: Foreign Trade) Refer to the figure. What is the dollarvalue of the consumer surplus that consumers could gain if thetrade restriction were removed?

Because of pressure from the United States, the garmentindustry in Bangladesh dismissed 30,000 to 50,000 childlaborers. This action:

Economic benefits to tariffs and import quotas include: morejobs in the protected industry, lower prices to consumers, andincreased gains from trade.

(Figure: Foreign Trade Market) Refer to the figure. What isthe dollar value of wasted resources as a result of prohibitingtrade in this market?

(Figure: Foreign Trade) Refer to the figure. What quantitywould be traded in the absence of any international trade?

One of the costs of protectionism is:

Figure: Foreign Trade (Figure: Foreign Trade) Refer to the figure. What is the dollarvalue of the deadweight loss created as a result of prohibitingtrade in this market?

The U.S. government restricting the quantity of sugar importsinto the country is an example of a(n):

Why does economic growth require job destruction?

Which of the following statements describes reasons why freetrade is beneficial for the United States?

A tariff benefits domestic producers but hurts domesticconsumers.

Economists consider tariffs to be:

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters