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

The answer is: "The difference between the price buyers pay for a good and the maximum or highest price they would have paid for the good." This is the definition for

A tariff raises the price of the product on which the tariff has been placed,decreases consumers' surplus,increases producers' surplus,and generates tariff revenue for the government.

The ability to produce a good at a lower opportunity cost than others is called a(n)__________ advantage.

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).Americans purchase ______ units of good X from U.S.producers and import _______ units of good X from abroad.

The term outsourcing is used to describe work done for a company by individuals working for another company in a different country.

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 P_W.At this price,producers' surplus equals the area of

Describe who benefits and who loses from tariffs and from quotas.What is the major difference between the effects of a quota and the effects of a tariff?

Alexander Hamilton used the infant-industry argument to support trade restrictions.

Exhibit 34-12 -Refer to Exhibit 34-12.P_W is the price that exists in a free world market.A quota is imposed and imports are Q₄ - Q₃.Importers gain revenues equal to the area __________.

It is necessary for government officials to analyze cost data to determine what their country should specialize in producing.

If,at the world price,domestic producers are producing and selling 100 units of a good,then at the world price plus tariff it follows that

One of the arguments in favor of trade restrictions is the foreign export subsidies argument.

Exhibit 34-7 -Refer to Exhibit 34-7.The world price of good X is $15.Under a policy of free trade,the U.S.production of good X would be

Two major exports for the United States are

Exhibit 34-6 -Refer to Exhibit 34-6.Which of the following terms of trade would both countries agree on?

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.As a result of the tariff,producers' surplus __________ by the area __________.

International trade exists because countries

The answer is: "It allows the inhabitants of a country to consume at a level beyond its production possibilities frontier." What is the question?

The effects of tariffs and quotas are: a(n)__________ in the prices of imported goods to domestic consumers,and a(n)__________ in imports.

The situation where a country can produce a good at a lower opportunity cost than another country is called a(n)__________ advantage.