Question 1

In poorer countries, free trade ________ the demand for labour in these countries and ________ the wages paid in these countries.

Accepted Answer

A) decreases; lowers 
B) decreases; raises 
C) increases; lowers 
D) increases; raises 
E) increases the supply and decreases; lowers 
A) decreases; lowers 
B) decreases; raises 
C) increases; lowers 
D) increases; raises 
E) increases the supply and decreases; lowers D

Question 2

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

Accepted Answer

A) avoiding import quotas. 
B) increasing its gains from trade. 
C) dumping. 
D) engaging in learning-by-doing. 
E) exploiting a comparative advantage. 
A) avoiding import quotas. 
B) increasing its gains from trade. 
C) dumping. 
D) engaging in learning-by-doing. 
E) exploiting a comparative advantage. C

Question 3

Choose the correct statement.

Accepted Answer

A) Exports include goods and services. 
B) Imports include goods but not services. 
C) Imports include services but not goods. 
D) Exports include goods but not services. 
E) Exports include services but not goods. 
A) Exports include goods and services. 
B) Imports include goods but not services. 
C) Imports include services but not goods. 
D) Exports include goods but not services. 
E) Exports include services but not goods. A

Question 4

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Accepted Answer

A) an import quota. 
B) dumping. 
C) a voluntary export restraint. 
D) a tariff. 
E) a sales tax. 
A) an import quota. 
B) dumping. 
C) a voluntary export restraint. 
D) a tariff. 
E) a sales tax.

Question 5

Refer to the figure below to answer the following questions.
   
Figure 7.2.1
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In Figure 7.2.1, international trade ________ producer surplus in Canada by ________.

Accepted Answer

A) increases; $320 million 
B) decreases; $192 million 
C) increases; $192 million 
D) decreases; $320 million 
E) decreases; $256 million 
A) increases; $320 million 
B) decreases; $192 million 
C) increases; $192 million 
D) decreases; $320 million 
E) decreases; $256 million

Question 6

Refer to the figure below to answer the following questions.
   
Figure 7.2.1
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In Figure 7.2.1, with international trade, Canadians buy ________ million shirts per year.

Accepted Answer

A) 48 
B) 32 
C) 16 
D) 24 
E) 56 
A) 48 
B) 32 
C) 16 
D) 24 
E) 56

Question 7

The introduction of a tariff ________ consumer surplus and ________ total surplus.

Accepted Answer

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

Question 8

Refer to the figure below to answer the following questions.
   
Figure 7.3.1
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. Canada imposes a tariff on imported shirts of $4 per shirt.
-Refer to Figure 7.3.1.Canadian producers' ________ from the tariff is ________.

Accepted Answer

A) loss; $32 million 
B) loss; $64 million 
C) gain; $80 million 
D) gain; $128 million 
E) gain; $64 million 
A) loss; $32 million 
B) loss; $64 million 
C) gain; $80 million 
D) gain; $128 million 
E) gain; $64 million

Question 9

Use the information below to answer the following questions.
Fact 7.3.1
Before 1995, trade between Canada and Mexico was subject to tariffs. In 1995, Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed.
-Refer to Fact 7.3.1.With the removal of the tariffs, the quantity of Canadian imports from Mexico ________, and the quantity of Canadian exports to Mexico ________.

Accepted Answer

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

Question 10

A country opens up to trade.In an import industry, surplus has been redistributed from

Accepted Answer

A) producers to consumers. 
B) consumers to producers. 
C) government to consumers. 
D) producers to government. 
E) government to producers. 
A) producers to consumers. 
B) consumers to producers. 
C) government to consumers. 
D) producers to government. 
E) government to producers.

Question 11

Refer to the figure below to answer the following questions.
   
Figure 7.3.1
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. Canada imposes a tariff on imported shirts of $4 per shirt.
-Refer to Figure 7.3.1.Canadian consumers' ________ from the tariff is ________.

Accepted Answer

A) loss; $176 million 
B) gain; $64 million 
C) loss; $80 million 
D) gain; $128 million 
E) gain; $176 million 
A) loss; $176 million 
B) gain; $64 million 
C) loss; $80 million 
D) gain; $128 million 
E) gain; $176 million

Question 12

Refer to the figure below to answer the following questions.
   
Figure 7.3.1
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. Canada imposes a tariff on imported shirts of $4 per shirt.
-Refer to Figure 7.3.1.With the tariff, Canada imports ________ million shirts per year.

Accepted Answer

A) 24 
B) 8 
C) 32 
D) 16 
E) 40 
A) 24 
B) 8 
C) 32 
D) 16 
E) 40

Question 13

In a market that moves from a situation of no trade to a situation where a good is imported, in the importing country the price of the good ________, and producer surplus ________.

Accepted Answer

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

Question 14

If Canada imposes a tariff on imported steel, the tariff

Accepted Answer

A) raises the Canadian price of imported steel. 
B) decreases the Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) increases Canadian consumer surplus. 
A) raises the Canadian price of imported steel. 
B) decreases the Canadian production of steel. 
C) increases the total Canadian consumption of steel. 
D) decreases employment in the Canadian steel industry. 
E) increases Canadian consumer surplus.

Question 15

Canada's producer surplus ________ when Canada imports a good, and Canada's producer surplus ________ when Canada exports a good.

Accepted Answer

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

Question 16

A Canadian tariff imposed on items that can be produced more cheaply abroad

Accepted Answer

A) benefits Canadians by making these goods cheaper. 
B) makes the goods more expensive in foreign markets. 
C) creates a deadweight loss. 
D) equalizes the cost of production between Canada and foreign producers. 
E) increases total surplus. 
A) benefits Canadians by making these goods cheaper. 
B) makes the goods more expensive in foreign markets. 
C) creates a deadweight loss. 
D) equalizes the cost of production between Canada and foreign producers. 
E) increases total surplus.

Question 17

Use the information below to answer the following questions.
Fact 7.3.1
Before 1995, trade between Canada and Mexico was subject to tariffs. In 1995, Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed.
-Refer to Fact 7.3.1.The quantity of Canadian exports to Mexico has ________, and the Canadian government's tariff revenue from trade with Mexico has ________.

Accepted Answer

A) not changed; not changed 
B) decreased; increased 
C) increased; increased 
D) increased; decreased 
E) increased; not changed 
A) not changed; not changed 
B) decreased; increased 
C) increased; increased 
D) increased; decreased 
E) increased; not changed

Question 18

Rent seeking is one reason why countries choose to

Accepted Answer

A) export and import the same goods. 
B) work for freer trade. 
C) follow the theory of comparative advantage. 
D) hire foreign labour. 
E) restrict trade. 
A) export and import the same goods. 
B) work for freer trade. 
C) follow the theory of comparative advantage. 
D) hire foreign labour. 
E) restrict trade.

Question 19

A country opens up to trade and becomes an importer of some good.Consumer surplus ________, and producer surplus ________.

Accepted Answer

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

Question 20

When considering rent seeking, which of the following is true?

Accepted Answer

A) The anti-free trade group generally will lobby more than the pro-free trade group. 
B) The pro-free trade group generally will lobby more than the anti-free trade group. 
C) Usually only the anti-free trade group is concerned about what is best for society at large. 
D) Only the pro-free trade group is concerned about the government's revenue from tariffs. 
E) Rent seeking is the primary reason why consumers gain from free trade. 
A) The anti-free trade group generally will lobby more than the pro-free trade group. 
B) The pro-free trade group generally will lobby more than the anti-free trade group. 
C) Usually only the anti-free trade group is concerned about what is best for society at large. 
D) Only the pro-free trade group is concerned about the government's revenue from tariffs. 
E) Rent seeking is the primary reason why consumers gain from free trade.

In poorer countries, free trade the demand for labour in these countries and the wages paid in these countries.

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

Choose the correct statement.

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

Refer to the figure below to answer the following questions. Figure 7.2.1 The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. -In Figure 7.2.1, international trade producer surplus in Canada by .

The introduction of a tariff consumer surplus and total surplus.

A country opens up to trade.In an import industry, surplus has been redistributed from

In a market that moves from a situation of no trade to a situation where a good is imported, in the importing country the price of the good , and producer surplus .

If Canada imposes a tariff on imported steel, the tariff

Canada's producer surplus when Canada imports a good, and Canada's producer surplus when Canada exports a good.

A Canadian tariff imposed on items that can be produced more cheaply abroad

Rent seeking is one reason why countries choose to

A country opens up to trade and becomes an importer of some good.Consumer surplus , and producer surplus .

When considering rent seeking, which of the following is true?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 7: Global Markets in Action

In poorer countries, free trade ________ the demand for labour in these countries and ________ the wages paid in these countries.

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of

Choose the correct statement.

A tax that is imposed by the importing country when an imported good crosses its international boundary is called

The introduction of a tariff ________ consumer surplus and ________ total surplus.

A country opens up to trade.In an import industry, surplus has been redistributed from

In a market that moves from a situation of no trade to a situation where a good is imported, in the importing country the price of the good ________, and producer surplus ________.

If Canada imposes a tariff on imported steel, the tariff

Canada's producer surplus ________ when Canada imports a good, and Canada's producer surplus ________ when Canada exports a good.

A Canadian tariff imposed on items that can be produced more cheaply abroad

Rent seeking is one reason why countries choose to

A country opens up to trade and becomes an importer of some good.Consumer surplus ________, and producer surplus ________.

When considering rent seeking, which of the following is true?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

In poorer countries, free trade the demand for labour in these countries and the wages paid in these countries.

The introduction of a tariff consumer surplus and total surplus.

In a market that moves from a situation of no trade to a situation where a good is imported, in the importing country the price of the good , and producer surplus .

Canada's producer surplus when Canada imports a good, and Canada's producer surplus when Canada exports a good.

A country opens up to trade and becomes an importer of some good.Consumer surplus , and producer surplus .