Exam 21: Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

Exhibit 34-8 -Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).The removal of the $100 per ton tariff would cause a(n)__________ in imports of __________ million tons.

Exhibit 34-6 -Refer to Exhibit 34-6.The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country B.

It is argued that certain industries should be protected from foreign competition because they are needed to secure the United States from foreign aggression.This argument is called the __________ argument.

The sale of goods abroad at a price below their cost and below the price charged in the domestic market is called

The effects of a quota include:

The national defense argument has been used in the past to justify trade restrictions by firms in the peanut industry and the pottery industry.

Which of the following is not an argument for trade restrictions?

The effect of a tariff is

With a quota,the __________ is greater than the __________.

Exhibit 34-8 -Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).Consumers' surplus is equal to the area __________ while producers' surplus is equal to the area __________.

Arguments made against free trade include all of the following except

The national defense argument for trade protectionism holds that

"New industries need to be protected or they won't have the opportunity to grow up." This is a statement of the __________ argument for trade restrictions.

Countries tend to specialize in the production of goods in which they have a comparative advantage because

Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States.Smith is

Exhibit 34-11 -Refer to Exhibit 34-11.P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed.Tariff revenues equal the area

Comparative advantage is the ability to produce a good at a lower opportunity cost than others.

The national defense argument for trade restriction holds that

List and describe three arguments that help to explain why nations sometimes restrict trade.Does everyone agree with these arguments?

The answer is: "A tax on imports." What is the question?