Question 1

As a result of an increase in tariffs, imports decrease and government revenue increases.

Accepted Answer

A) True 
 B)False  True

Question 2

Hiring foreign labor and producing in other countries is an example of offshoring.

Accepted Answer

A) True 
 B)False  True

Question 3

In 2006, the European Union tariff on imported bananas from Latin America was €176 a ton. Suppose 2.5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the tariff revenue in 2007?

Accepted Answer

A)  €445,000,000 
B)  €528,000,000 
C)  €440,000,000 
D)  €375,000,000 
A)  €445,000,000 
B)  €528,000,000 
C)  €440,000,000 
D)  €375,000,000 A

Question 4

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

Accepted Answer

A)  decreases; lowers 
B)  decreases; raises 
C)  increases; lowers 
D)  increases; raises 
A)  decreases; lowers 
B)  decreases; raises 
C)  increases; lowers 
D)  increases; raises

Question 5

Tariffs and import quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good.

Accepted Answer

A) True 
 B)False

Question 6

When a foreign firm sells its exports at a lower price than its cost of production, the firm is

Accepted Answer

A)  imposing an economies of scale cost. 
B)  dumping. 
C)  avoiding a tariff. 
D)  competing in an infant industry. 
A)  imposing an economies of scale cost. 
B)  dumping. 
C)  avoiding a tariff. 
D)  competing in an infant industry.

Question 7

The figure shows the market for shirts in the United States, where D is the U.S demand curve and S is the U.S. supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt.
-In the figure above, with the tariff the United States imports ________ million shirts per year.

Accepted Answer

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

Question 8

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter.
-In the figure above, international trade ________ producer surplus in the United States by ________.

Accepted Answer

A)  decreases; $2.88 billion 
B)  decreases; $1.92 billion 
C)  increases; $4.8 billion 
D)  increases; $3.6 billion 
A)  decreases; $2.88 billion 
B)  decreases; $1.92 billion 
C)  increases; $4.8 billion 
D)  increases; $3.6 billion

Question 9

Suppose sugar is exported from a nation. In the sugar market who does NOT benefit from the exports?

Accepted Answer

A)  domestic consumers 
B)  domestic producers 
C)  workers in the industry 
D)  foreign consumers 
A)  domestic consumers 
B)  domestic producers 
C)  workers in the industry 
D)  foreign consumers

Question 10

The fundamental force that drives international trade is

Accepted Answer

A)  absolute advantage. 
B)  importation duties and tariffs. 
C)  export licenses. 
D)  comparative advantage. 
A)  absolute advantage. 
B)  importation duties and tariffs. 
C)  export licenses. 
D)  comparative advantage.

Question 11

U.S. producer surplus ________ when the United States imports a good and U.S. producer surplus ________ when the United States exports a good.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 12

Import quotas ________ the price of imported goods and ________ the quantity consumed in the nation imposing the quota.

Accepted Answer

A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease 
A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease

Question 13

Which of the following is a TRUE statement?

Accepted Answer

A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition. 
A)  Everyone benefits from free trade. 
B)  Only exporters benefit from trade. 
C)  All producers benefit from trade and but not all consumers benefit. 
D)  Free trade harms domestic producers of goods that face import competition.

Question 14

If the United States imposes a tariff on $1 per imported shirt, the tariff will

Accepted Answer

A)  raise the price of a shirt to U.S. consumers. 
B)  benefit U.S. shirt producers. 
C)  decrease imports of shirts into the United States. 
D)  all of the above 
A)  raise the price of a shirt to U.S. consumers. 
B)  benefit U.S. shirt producers. 
C)  decrease imports of shirts into the United States. 
D)  all of the above

Question 15

-The United States imports cheese from a variety of countries. The table above gives the domestic supply of, and demand for, cheese in the United States. The world price of cheese is $12 per pound, and trade is unrestricted.
a) How many pounds of cheese are consumed in the United States?
b) How many pounds of cheese are produced in the United States?
c) How many pounds of cheese are imported into the United States?
If a $3 per pound tariff is imposed,
d) How many pounds of cheese are consumed in the United States?
e) How many pounds of cheese are produced in the United States?
f) How many pounds of cheese are imported into the United States?
g) How much will the U.S. government collect in tariff revenue?
h) Who benefits from the tariff? Who loses?

Accepted Answer

a) 180,000 pounds of cheese are consumed

Question 16

An import quota protects domestic producers by

Accepted Answer

A)  setting a limit on the amount of imports. 
B)  placing a prohibitive tax on imports. 
C)  encouraging competition among domestic producers. 
D)  increasing the total supply of the product. 
A)  setting a limit on the amount of imports. 
B)  placing a prohibitive tax on imports. 
C)  encouraging competition among domestic producers. 
D)  increasing the total supply of the product.

Question 17

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba

Question 18

Quotas and tariffs both

Accepted Answer

A)  decrease deadweight loss. 
B)  restrict foreign trade. 
C)  cause a loss of revenue to domestic producers. 
D)  lower prices on imported goods. 
A)  decrease deadweight loss. 
B)  restrict foreign trade. 
C)  cause a loss of revenue to domestic producers. 
D)  lower prices on imported goods.

Question 19

The winners from a Japanese tariff on imported cars are I. Japanese car producers.
II) Japanese car consumers.
III) the Japanese government.

Accepted Answer

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

Question 20

How does the United States attempt to compensate losers from lower trade restrictions?

Accepted Answer

The U.S. government attempts to compensa

As a result of an increase in tariffs, imports decrease and government revenue increases.

Hiring foreign labor and producing in other countries is an example of offshoring.

In 2006, the European Union tariff on imported bananas from Latin America was €176 a ton. Suppose 2.5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the tariff revenue in 2007?

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

Tariffs and import quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good.

When a foreign firm sells its exports at a lower price than its cost of production, the firm is

Suppose sugar is exported from a nation. In the sugar market who does NOT benefit from the exports?

The fundamental force that drives international trade is

U.S. producer surplus when the United States imports a good and U.S. producer surplus when the United States exports a good.

Import quotas the price of imported goods and the quantity consumed in the nation imposing the quota.

Which of the following is a TRUE statement?

If the United States imposes a tariff on $1 per imported shirt, the tariff will

An import quota protects domestic producers by

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Quotas and tariffs both

The winners from a Japanese tariff on imported cars are I. Japanese car producers. II) Japanese car consumers. III) the Japanese government.

How does the United States attempt to compensate losers from lower trade restrictions?

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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 7: Global Markets in Action

As a result of an increase in tariffs, imports decrease and government revenue increases.

Hiring foreign labor and producing in other countries is an example of offshoring.

In 2006, the European Union tariff on imported bananas from Latin America was €176 a ton. Suppose 2.5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the tariff revenue in 2007?

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

Tariffs and import quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good.

When a foreign firm sells its exports at a lower price than its cost of production, the firm is

Suppose sugar is exported from a nation. In the sugar market who does NOT benefit from the exports?

The fundamental force that drives international trade is

U.S. producer surplus ________ when the United States imports a good and U.S. producer surplus ________ when the United States exports a good.

Import quotas ________ the price of imported goods and ________ the quantity consumed in the nation imposing the quota.

Which of the following is a TRUE statement?

If the United States imposes a tariff on $1 per imported shirt, the tariff will

An import quota protects domestic producers by

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Quotas and tariffs both

The winners from a Japanese tariff on imported cars are I. Japanese car producers. II) Japanese car consumers. III) the Japanese government.

How does the United States attempt to compensate losers from lower trade restrictions?

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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

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

U.S. producer surplus when the United States imports a good and U.S. producer surplus when the United States exports a good.

Import quotas the price of imported goods and the quantity consumed in the nation imposing the quota.