Chapter 9 EC 210 quizzes

b. raises the domestic price of the imported good above the world price

A tariff a. lowers the domestic price of the exported good below the world price. b. raises the domestic price of the imported good above the world price. c. lowers the domestic price of the imported good below the world price. d. keeps the domestic price of the exported good the same as the world price.

b. increases the domestic quantity supplied

A tariff on a product a. results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus. b. increases the domestic quantity supplied c. increases the domestic quantity demanded. d. enhances the economic well-being of the domestic economy.

c. have more firms with domestic market power

Countries that restrict foreign trade are likely to a. forgo the additional surplus that trade allows, but will probably enjoy economies of scale. b. forgo the additional surplus that trade allows, but will have a lower rate of unemployment. c. have more firms with domestic market power d. forgo the additional surplus that trade allows, but will be compensated by a higher rate of technological change.

a. comparative advantage

Patterns of trade among nations are primarily determined by a. comparative advantage b. differences in the income elasticity of demand among nations. c. cultural considerations. d. political considerations.

a. all of the above are correct

Suppose France subsidizes French wheat farmers, while Germany offers no subsidy to German wheat farmers. As a result of the French subsidy, sales of French wheat to Germany a. all of the above are correct b. increase the consumer surplus of German buyers of wheat. c. may prompt German farmers to invoke the unfair-competition argument. d. increase the total surplus of the German people.

b. will import oranges

Suppose Haiti has an absolute advantage over other countries in producing oranges, but other countries have a comparative advantage over Haiti in producing oranges. If trade in oranges is allowed, Haiti a. will export oranges. b. will import oranges c. would have nothing to gain either from exporting or importing oranges. d. will either export oranges or export oranges, but it is not clear from the given information.

b. harm the unties states as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes a. benefit the United States as a whole, because they generate revenue for the government. In addition, because the goods are priced below cost, the taxes do not harm domestic consumers. b. harm the united states as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue c. harm the united states as a whole, because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue. d. benefit the United States as a whole, because they generate revenue for the government and increase producer surplus.

c. the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good

When a country allows trade and becomes an exporter of a good, a. the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good. b. the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good. c. the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good d. the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good.

a. $27 and 400

a. $27 and 400 b. $21 and 600. c. $27 and 800. d. $21 and 400

c. $2,400

a. $3,200 b. $1,600 c. $2,400 d. $3,600

d. $2250

a. $375 b. $8700 c. $2000 d. $2250

d. P1 and Q4

a. P2 and Q2 b. P2 and Q3 c. P1 and Q1 d. P1 and Q4

c. A+B

a. A b. A + B + C + D +E + F c. A+B d. A + C + G

c. higher than that country's domestic price without trade.

A country has a comparative advantage in a product if the world price is a. lower than the country's domestic price without trade b. not subject to manipulation by organizations that govern international trade. c. higher than that country's domestic price without trade. d. equal to that country's domestic price without trade.

a. the world price exceeds the domestic price of the good that prevailed before international trade was allowed

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and a. the world price exceeds the domestic price of the good that prevailed before international trade was allowed b. other countries have a comparative advantage, relative to the country in question, in producing the good. c. the country becomes an importer of the good as a result. d. total surplus does not change as a result

d. a tariff raises revenue for that country's government, while an import quota does not

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that: a. tariff raises total surplus, while an import quota does not b. an import quota has no effect on consumer surplus, while a tariff decreases consumer surplus c. an import quota has no effect on producer surplus, while a tariff decreases produce surplus d. a tariff raises revenue for that country's government, while an import quota does not

c. revenue is raised for the domestic government

Import quotas and tariffs produce some common results. Which of the following is not one of those common results? a. total surplus in the domestic country falls b. producer surplus in the domestic country increase c. Revenue is raised for the domestic government. d. The domestic country experiences a deadweight loss.

c. the negative effects of third world exports on U.S. wages may be increasing

In a 2007 New York Times article Paul Krugman wrote that a. there are social gains to the U.S. from free trade. b. the infant-industry argument works well as an argument in favor of protection for the U.S. steel industry. c. the negative effects of third world exports on U.S. wages may be increasing d. high wage countries account for a growing share of U.S. imports of manufactured goods.

c. consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50

Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible? a. Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150. b. Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50. c. consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50 d. Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50.

a. at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country.

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then a. at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country. b. that country becomes an exporter of pistachios. c. All of the above are correct d. that country has a comparative advantage in producing pistachios.

c. importing steel and the price per ton in Russia decreased to $650

The world price of a ton of steel is $650. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began a. importing steel and the price per ton in Russia remained at $1,000. b. exporting steel and the price per ton in Russia remained at $1,000. c. importing steel and the price per ton in Russia decreased to $650 d. exporting steel and the price per ton in Russia decreased to $650.

a. consumer surplus decreases and the total surplus decreases in the market for that good.

When a country that imports a particular good imposes a tariff on that good, a. consumer surplus decreases and total surplus decreases in the market for that good. b. consumer surplus decreases and total surplus increases in the market for that good. c. consumer surplus increases and total surplus increases in the market for that good. d. consumer surplus increases and total surplus decreases in the market for that good.

d. producer surplus increases and total surplus decreases in the market for the good.

When a country that imports a particular good imposes a tariff on that good, a. producer surplus increases and total surplus increases in the market for that good. b. producer surplus decreases and total surplus decreases in the market for that good. c. producer surplus decreases and total surplus increases in the market for that good. d. producer surplus increases and total surplus decreases in the market for that good.

b. 800 and 400

a. 400 and 600 b. 800 and 400 c. 600 and 400 d. 400 and 800

d. has a comparative disadvantage relative to other countries in the production of cars and it will import cars

a. has a comparative advantage relative to other countries in the production of cars and it will import cars. b. has a comparative disadvantage relative to other countries in the production of cars and it will export cars. c. has a comparative advantage relative to other countries in the production of cars and it will export cars. d. has a comparative disadvantage relative to other countries in the production of cars and it will import cars

d. export 1,500 units of rice

a. import 1,500 units of rice. b. import 1,000 units of rice. c. export 1,000 units of rice d. export 1,500 units of rice

c. consumers will gain more than producers will lose

a. producers and consumers will both lose equally b. producers and consumers will both gain equally c. consumers will gain more than producers will lose d. producers will gain more than consumers will lose

d. the decrease in consumer surplus caused by the tariff

a. the decreases in total surplus caused by the tariff b. the deadweight loss of the tariff plus government revenue raised by the tariff c. the deadweight loss of the tariff minus government revenue raised by the tariff. d. the decrease in consumer surplus caused by the tariff