Question 1

A tariff is a

Accepted Answer

A) tax imposed on domestic producers of export goods. 
B) legal limit on the amount of a good that can be imported. 
C) tax imposed on imported goods. 
D) legal limit on the amount of a good that can be produced by foreign owners of a firm located in a host country. 
A) tax imposed on domestic producers of export goods. 
B) legal limit on the amount of a good that can be imported. 
C) tax imposed on imported goods. 
D) legal limit on the amount of a good that can be produced by foreign owners of a firm located in a host country.

Question 2

Exhibit 34-3  
-Refer to Exhibit 34-3.The world price is PW.If a tariff is imposed,the price rises to PW + T.Because of the tariff,producers' surplus is __________ by an amount equal to the area of __________.

Accepted Answer

A) increased;1 + 2 
B) decreased;1 
C) increased;3 + 4 
D) increased;1 
E) decreased;3 
A) increased;1 + 2 
B) decreased;1 
C) increased;3 + 4 
D) increased;1 
E) decreased;3

Question 3

As a result of a quota,both consumers' surplus and producers' surplus fall.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following conditions makes it most likely for a quota to be imposed?

Accepted Answer

A) The benefits of the quota are spread over many and the costs are concentrated on a few. 
B) The benefits of the quota are spread over many and the costs are spread over many. 
C) The benefits of the quota are spread over few and the costs are spread over many. 
D) The benefits of the quota are spread over few and the costs are spread over few. 
E) There is not enough information to answer the question. 
A) The benefits of the quota are spread over many and the costs are concentrated on a few. 
B) The benefits of the quota are spread over many and the costs are spread over many. 
C) The benefits of the quota are spread over few and the costs are spread over many. 
D) The benefits of the quota are spread over few and the costs are spread over few. 
E) There is not enough information to answer the question.

Question 5

Which of the following statements is false?

Accepted Answer

A) As a result of a quota,consumers' surplus falls. 
B) As a result of a tariff,producers' surplus rises. 
C) As a result of a tariff,consumers' surplus falls. 
D) As a result of a quota,producers' surplus rises. 
E) none of the above 
A) As a result of a quota,consumers' surplus falls. 
B) As a result of a tariff,producers' surplus rises. 
C) As a result of a tariff,consumers' surplus falls. 
D) As a result of a quota,producers' surplus rises. 
E) none of the above

Question 6

Exhibit 34-7  
-Refer to Exhibit 34-7.Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).The government collects tariff revenue on good X in the amount of

Accepted Answer

A) $100 
B) $200 
C) $250 
D) $300 
E) There is not enough information to answer this question. 
A) $100 
B) $200 
C) $250 
D) $300 
E) There is not enough information to answer this question.

Question 7

Exhibit 34-11  
-Refer to Exhibit 34-11.PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed.The tariff results in a net loss to society equal to area(s)

Accepted Answer

A) DBE + FCG. 
B) EBCF. 
C) DBE + EBCF. 
D) FCG + EBCF. 
E) none of the above 
A) DBE + FCG. 
B) EBCF. 
C) DBE + EBCF. 
D) FCG + EBCF. 
E) none of the above

Question 8

Raquel,who earns $900 a week,bought a television set and gained $70 consumers' surplus.What price did she pay for the good?

Accepted Answer

A) $40 
B) $830 
C) $160 
D) $5 
E) There is not enough information to answer the question. 
A) $40 
B) $830 
C) $160 
D) $5 
E) There is not enough information to answer the question.

Question 9

The answer is: "A reduction in consumers' surplus." What is the question?

Accepted Answer

A) What is an effect of a rise in price? 
B) What is an effect of a tariff? 
C) What is an effect of a quota? 
D) a and b 
E) a,b,and c 
A) What is an effect of a rise in price? 
B) What is an effect of a tariff? 
C) What is an effect of a quota? 
D) a and b 
E) a,b,and c

Question 10

The law of comparative advantage can be used to explain why many couples divide up their household duties along gender lines.

Accepted Answer

A) True 
 B)False

Question 11

The difference between the highest amount a buyer would be willing to pay for a good and the amount she actually pays for it is

Accepted Answer

A) producers' surplus. 
B) consumers' surplus. 
C) marginal revenue. 
D) marginal utility. 
A) producers' surplus. 
B) consumers' surplus. 
C) marginal revenue. 
D) marginal utility.

Question 12

Consumers' surplus is the difference between the price

Accepted Answer

A) sellers receive for a good and the maximum price they would have paid for the good. 
B) sellers receive for a good and the minimum price for which they could have sold the good. 
C) buyers pay for a good and the maximum price they would have paid for the good. 
D) buyers pay for a good and the minimum price for which they would have sold the good. 
A) sellers receive for a good and the maximum price they would have paid for the good. 
B) sellers receive for a good and the minimum price for which they could have sold the good. 
C) buyers pay for a good and the maximum price they would have paid for the good. 
D) buyers pay for a good and the minimum price for which they would have sold the good.

Question 13

A quota on imported avocadoes ______________ the price of avocadoes,_____________ consumers' surplus for avocado buyers,_______________ producers' surplus of avocado growers and __________________ tariff revenue.Because the loss to _____________ is more than the gain to ___________________,there is a net loss to society.

Accepted Answer

A) raises;increases;decreases;generates;producers;consumers and government 
B) lowers;increases;decreases;does not generate;producers;consumers 
C) raises;increases;decreases;does not generate;consumers;producers and importers 
D) raises;decreases;increases;generates;consumers;producers and government 
A) raises;increases;decreases;generates;producers;consumers and government 
B) lowers;increases;decreases;does not generate;producers;consumers 
C) raises;increases;decreases;does not generate;consumers;producers and importers 
D) raises;decreases;increases;generates;consumers;producers and government

Question 14

Exhibit 34-2  
-Refer to Exhibit 34-2.The U.S.demand and supply for a good are shown.Under a policy of free trade,the world price is PW.If there is a policy change such that imports are prohibited,the price becomes PN.U.S.producers are better off if imports are __________;specifically,their producers' surplus changes by area __________.

Accepted Answer

A) permitted;PWDE 
B) permitted;PN BDPW 
C) prohibited;BDC 
D) prohibited;PNBDPW 
A) permitted;PWDE 
B) permitted;PN BDPW 
C) prohibited;BDC 
D) prohibited;PNBDPW

Question 15

Exhibit 34-3  
-Refer to Exhibit 34-3.The world price is PW.If a tariff is imposed the price rises to PW + T.Because of the tariff,consumers' surplus is reduced by an amount equal to the area of

Accepted Answer

A) 1 + 2 + 3. 
B) 1 + 2. 
C) 1 + 2 + 3 + 4. 
D) 3 + 4. 
E) 2 + 3 + 4. 
A) 1 + 2 + 3. 
B) 1 + 2. 
C) 1 + 2 + 3 + 4. 
D) 3 + 4. 
E) 2 + 3 + 4.

Question 16

If countries 1 and 2 produce only two goods,A and B,and they have the same opportunity cost for the production of good A (and thus good B),then

Accepted Answer

A) each country will specialize in the production of one good and engage in trade. 
B) neither country will specialize in the production of a good,but both will engage in trade. 
C) one country will specialize in the production of a good,and both will engage in trade. 
D) neither country will specialize in the production of a good,and there will be no incentive for trade. 
A) each country will specialize in the production of one good and engage in trade. 
B) neither country will specialize in the production of a good,but both will engage in trade. 
C) one country will specialize in the production of a good,and both will engage in trade. 
D) neither country will specialize in the production of a good,and there will be no incentive for trade.

Question 17

Exhibit 34-7  
-Refer to Exhibit 34-7.The world price of good X is $15.If imports of good X are legally limited to 30 units,the price of X in the United States would be

Accepted Answer

A) $20. 
B) $25. 
C) $30. 
D) $35. 
E) none of the above 
A) $20. 
B) $25. 
C) $30. 
D) $35. 
E) none of the above

Question 18

One country has a comparative advantage over another country in the production of a good if it

Accepted Answer

A) has a curved production possibilities curve and the other country has a linear production possibilities curve. 
B) has a linear production possibilities curve and the other country has a curved production possibilities curve. 
C) is a lower opportunity cost producer of the good. 
D) has lower fixed costs than the other country. 
A) has a curved production possibilities curve and the other country has a linear production possibilities curve. 
B) has a linear production possibilities curve and the other country has a curved production possibilities curve. 
C) is a lower opportunity cost producer of the good. 
D) has lower fixed costs than the other country.

Question 19

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).Americans purchase __________ million tons of sugar from U.S.producers and import __________ million tons of sugar from abroad.

Accepted Answer

A) 15;10 
B) 15;20 
C) 10;5 
D) 10;15 
E) 10;20 
A) 15;10 
B) 15;20 
C) 10;5 
D) 10;15 
E) 10;20

Question 20

Exhibit 34-7  
-Refer to Exhibit 34-7.The world price of good X is $15.Under a policy of free trade,U.S.consumers will import ___________ units of X from abroad.

Accepted Answer

A) 50 
B) 45 
C) 40 
D) 30 
A) 50 
B) 45 
C) 40 
D) 30

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

A tariff is a

Exhibit 34-3 -Refer to Exhibit 34-3.The world price is PW.If a tariff is imposed,the price rises to PW + T.Because of the tariff,producers' surplus is __________ by an amount equal to the area of __________.

As a result of a quota,both consumers' surplus and producers' surplus fall.

Which of the following conditions makes it most likely for a quota to be imposed?

Which of the following statements is false?

Exhibit 34-7 -Refer to Exhibit 34-7.Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).The government collects tariff revenue on good X in the amount of

Exhibit 34-11 -Refer to Exhibit 34-11.PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed.The tariff results in a net loss to society equal to area(s)

Raquel,who earns $900 a week,bought a television set and gained $70 consumers' surplus.What price did she pay for the good?

The answer is: "A reduction in consumers' surplus." What is the question?

The law of comparative advantage can be used to explain why many couples divide up their household duties along gender lines.

The difference between the highest amount a buyer would be willing to pay for a good and the amount she actually pays for it is

Consumers' surplus is the difference between the price

Exhibit 34-3 -Refer to Exhibit 34-3.The world price is PW.If a tariff is imposed the price rises to PW + T.Because of the tariff,consumers' surplus is reduced by an amount equal to the area of

If countries 1 and 2 produce only two goods,A and B,and they have the same opportunity cost for the production of good A (and thus good B),then

Exhibit 34-7 -Refer to Exhibit 34-7.The world price of good X is $15.If imports of good X are legally limited to 30 units,the price of X in the United States would be

One country has a comparative advantage over another country in the production of a good if it

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).Americans purchase __________ million tons of sugar from U.S.producers and import __________ million tons of sugar from abroad.

Exhibit 34-7 -Refer to Exhibit 34-7.The world price of good X is $15.Under a policy of free trade,U.S.consumers will import ___________ units of X from abroad.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Filters

Exhibit 34-3 -Refer to Exhibit 34-3.The world price is P_W.If a tariff is imposed,the price rises to P_W + T.Because of the tariff,producers' surplus is by an amount equal to the area of .

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.The tariff results in a net loss to society equal to area(s)

Exhibit 34-3 -Refer to Exhibit 34-3.The world price is P_W.If a tariff is imposed the price rises to P_W + T.Because of the tariff,consumers' surplus is reduced by an amount equal to the area of

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).Americans purchase million tons of sugar from U.S.producers and import million tons of sugar from abroad.