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Exam 8: Trade

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Exam 1: The Principles and Practice of Economics103 Questionsadd course
Exam 2: Economic Methods and Economic Questions94 Questionsadd course
Exam 3: Optimization: Doing the Best You Can94 Questionsadd course
Exam 4: Demand, supply, and Equilibrium185 Questionsadd course
Exam 5: Consumers and Incentives187 Questionsadd course
Exam 6: Sellers and Incentives261 Questionsadd course
Exam 7: Perfect Competition and the Invisible Hand251 Questionsadd course
Exam 8: Trade264 Questionsadd course
Exam 9: Externalities and Public Goods223 Questionsadd course
Exam 10: The Government in the Economy: Taxation and Regulation244 Questionsadd course
Exam 11: Markets for Factors of Production237 Questionsadd course
Exam 12: Monopoly295 Questionsadd course
Exam 13: Game Theory and Strategic Play199 Questionsadd course
Exam 14: Oligopoly and Monopolistic Competition264 Questionsadd course
Exam 15: Trade-Offs Involving Time and Risk147 Questionsadd course
Exam 16: The Economics of Information119 Questionsadd course
Exam 17: Auctions and Bargaining123 Questionsadd course
Exam 18: Social Economics111 Questionsadd course
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Scenario: Suppose the world price is $2 per bushel, and U.S. wheat growers are dissatisfied with the level of wheat imports into the United States. They lobby Congress for a $1 per bushel tariff on imported wheat. The following figure shows the U.S. wheat market. Scenario: Suppose the world price is $2 per bushel, and U.S. wheat growers are dissatisfied with the level of wheat imports into the United States. They lobby Congress for a $1 per bushel tariff on imported wheat. The following figure shows the U.S. wheat market. -Refer to the scenario above.The deadweight loss arising from the tariff is represented by which area? -Refer to the scenario above.The deadweight loss arising from the tariff is represented by which area?

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Question 1
Correct Answer:
Verified

D

How can national security be threatened when a nation engages in free trade and specializes on the basis of comparative advantage?

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Question 2
Correct Answer:
Verified

Free trade is based on comparative advantage and specialization.A country specializes in the production of a good in which it has a comparative advantage.Hence,when a nation engages in free trade,resources that are required for strengthening the defense of a country are likely to be guided toward the production of goods that have an export potential.Moreover,specialization may cause a nation to import military weaponry if it does not have a comparative advantage in its production.If a conflict develops with the country from which such weapons are being imported,it is unlikely that the country will continue to export weapons.This will hamper the ability of a country to preserve its integrity in times of war and thus act as a threat to national security.

Which of the following is a tool used for protectionism?

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Question 3
Correct Answer:
Verified

C

The figures below show markets for solar panels and textiles in Banana Republic. Pwₒᵣld is the world price in each market. The figures below show markets for solar panels and textiles in Banana Republic. Pwₒᵣld is the world price in each market. -Refer to the figures above.When Banana Republic opens up to international trade,consumers overall would be better off if ________. -Refer to the figures above.When Banana Republic opens up to international trade,consumers overall would be better off if ________.

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Question 4

Scenario: Suppose the world price is $2 per bushel, and U.S. wheat growers are dissatisfied with the level of wheat imports into the United States. They lobby Congress for a $1 per bushel tariff on imported wheat. The following figure shows the U.S. wheat market. Scenario: Suppose the world price is $2 per bushel, and U.S. wheat growers are dissatisfied with the level of wheat imports into the United States. They lobby Congress for a $1 per bushel tariff on imported wheat. The following figure shows the U.S. wheat market. -Refer to the scenario above.The increase in producer surplus caused by the imposition of the tariff is given by what area in the figure? -Refer to the scenario above.The increase in producer surplus caused by the imposition of the tariff is given by what area in the figure?

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Question 5

The figure below shows production possibilities curves for tomatoes and oranges in two prefectures in a country. The figure below shows production possibilities curves for tomatoes and oranges in two prefectures in a country. -Refer to the figure above. Suppose that Prefecture A produces at point W, while Prefecture B produces at point X. Could there be gains from trade (Prefecture A sells tomatoes to Prefecture B, and Prefecture B sells oranges to Prefecture B)? Why or why not? -Refer to the figure above. Suppose that Prefecture A produces at point W, while Prefecture B produces at point X. Could there be gains from trade (Prefecture A sells tomatoes to Prefecture B, and Prefecture B sells oranges to Prefecture B)? Why or why not?

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Question 6

Which of the following represents a good imported to the state of Wyoming?

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Question 7

Which of the following statements is true of the world price of a good?

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Question 8

Which of the following statements best describes absolute advantage?

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Question 9

Which of the following arguments is not an explanation of why it is difficult to compensate losers for the effects of opening an economy to international trade?

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Question 10

The following figure represents various production possibilities curves (PPCs) of economies that produce apples and oranges. The following figure represents various production possibilities curves (PPCs) of economies that produce apples and oranges. -Refer to the figure above.An economy produces apples and oranges.In this economy,the opportunity cost of producing apples and the opportunity cost of producing oranges are both increasing.In the figure,which curve correctly represents the production possibilities frontier of this economy? -Refer to the figure above.An economy produces apples and oranges.In this economy,the opportunity cost of producing apples and the opportunity cost of producing oranges are both increasing.In the figure,which curve correctly represents the production possibilities frontier of this economy?

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Question 11

The table below shows the domestic price of a pair of trousers in four countries. The table below shows the domestic price of a pair of trousers in four countries. -Refer to the table above.If the world price of trousers is $8 per pair,then which of the following statements is true? -Refer to the table above.If the world price of trousers is $8 per pair,then which of the following statements is true?

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Question 12

The following figure depicts four different scenarios in which the blue line represents California's production possibilities curve (PPC) and the red line represents Texas' PPC. These two states trade wine and cloth. The following figure depicts four different scenarios in which the blue line represents California's production possibilities curve (PPC) and the red line represents Texas' PPC. These two states trade wine and cloth. -Refer to the figure above.In what scenario would the terms of trade of cloth for wine be between 1 and 1.25? -Refer to the figure above.In what scenario would the terms of trade of cloth for wine be between 1 and 1.25?

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Question 13

The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2. The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2. -Refer to the figure above.What is the consumer surplus after Lithasia opens up to free trade? -Refer to the figure above.What is the consumer surplus after Lithasia opens up to free trade?

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Question 14

Which of the following correctly identifies an argument against free trade?

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Question 15

Scenario: Norway and Sweden each produce cloudberries (CB) and salted cod (SC). Their production possibilities curves for these two goods are shown below. Scenario: Norway and Sweden each produce cloudberries (CB) and salted cod (SC). Their production possibilities curves for these two goods are shown below. Production Possibilities: Norway and Sweden (thousands of kilos) Opportunity Costs: Norway and Sweden -Refer to the scenario above.________ has the comparative advantage in producing cloudberries,while ________ has the comparative advantage in producing salted cod. Production Possibilities: Norway and Sweden (thousands of kilos) Scenario: Norway and Sweden each produce cloudberries (CB) and salted cod (SC). Their production possibilities curves for these two goods are shown below. Production Possibilities: Norway and Sweden (thousands of kilos) Opportunity Costs: Norway and Sweden -Refer to the scenario above.________ has the comparative advantage in producing cloudberries,while ________ has the comparative advantage in producing salted cod. Opportunity Costs: Norway and Sweden Scenario: Norway and Sweden each produce cloudberries (CB) and salted cod (SC). Their production possibilities curves for these two goods are shown below. Production Possibilities: Norway and Sweden (thousands of kilos) Opportunity Costs: Norway and Sweden -Refer to the scenario above.________ has the comparative advantage in producing cloudberries,while ________ has the comparative advantage in producing salted cod. -Refer to the scenario above.________ has the comparative advantage in producing cloudberries,while ________ has the comparative advantage in producing salted cod.

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Question 16

The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2. The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2. -Refer to the figure above.What is the total surplus before Lithasia opens up to free trade? -Refer to the figure above.What is the total surplus before Lithasia opens up to free trade?

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Question 17

The following table shows the value of exports and imports of four countries in 1990. The following table shows the value of exports and imports of four countries in 1990. -Refer to the table above.Which of the following statements is true? -Refer to the table above.Which of the following statements is true?

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Question 18

Scenario: The domestic supply and demand of a good in the United States is shown in the figure below. Suppose the world price of this good is $4. Suppose the United States is considering levying a $2 tariff per unit on imports of this good. Scenario: The domestic supply and demand of a good in the United States is shown in the figure below. Suppose the world price of this good is $4. Suppose the United States is considering levying a $2 tariff per unit on imports of this good. -Refer to the scenario above.The change in producer surplus after the tariff is ________. -Refer to the scenario above.The change in producer surplus after the tariff is ________.

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Question 19

A world price for a good is ________.

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