Micro Quiz #9

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A $33, with 200 tricycles produced in this country and another 320 tricycles imported.

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A the decrease in consumer surplus caused by the tariff

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B D+F

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B B+C

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C Decreases the number of roses imported by 200

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus. True or False

False

When a government imposes a tariff on a product, the domestic price will equal the world price. True or False

False

The history of the textile industry raises important questions for economic policy. True or False

True

When a country allows trade and becomes an importer of silk, which of the following is not a consequence? -The gains of the winners exceed the losses of the losers. - The price received by domestic producers of silk increases. -The price paid by domestic consumers of silk decreases. -The price received by domestic producers of silk decreases.

B The price received by domestic producers of silk increases.

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach? - A multilateral approach can reduce trade restrictions abroad as well as at home. - A multilateral approach has the potential to result in freer trade. -A multilateral approach requires the agreement of two or more nations. - A multilateral approach may have political advantages.

C A multilateral approach requires the agreement of two or more nations

Scenario 9-1 ​ For a small country called Boxland, the equation of the domestic demand curve for cardboard is QD = 380 − 2P, where QD represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is QS = -60 + 3P, where QS represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. Refer to Scenario 9-1. Suppose the world price of cardboard is $139. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, -domestic producers of cardboard become better off and domestic consumers of cardboard become better off. -domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. -domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. - domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.

C domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.

What is the fundamental basis for trade among nations? -Shortages or surpluses in nations that do not trade -Misguided economic policies -Absolute advantage - Comparative advantage

D Comparative Advantage

The General Agreement on Tariffs and Trade (GATT) was initiated in response to -an increase in exports of low-priced goods from developing countries to developed countries. -the replacement of manufacturing jobs with service jobs in developed countries. -economic dislocations caused by the North American Free Trade Agreement (NAFTA) in the 1990s. -high tariffs imposed during the Great Depression of the 1930s.

D high tariffs imposed during the Great Depression of the 1930s

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition. True or False

False

​If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade. True or False

True