Econ 2302 International Trade Quiz

Answer the next question on the basis of the following production possibilities tables for two countries. Which of the following would be feasible terms for trade between Latalia and Trombonia?

4 tons of beans for 1 ton of pork

When a quota on a product is eliminated, the ones who benefit the most are the

domestic consumers of the product.

A tariff is a

tax

A tariff can best be described as

an excise tax on an imported good

Use the following table for Country X to answer the next question. Column 1 of the table is the world price of a product. Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the quantity supplied domestically (Qsd). If Country X opens itself up to international trade, at what world price will it begin exporting some units of the product? Assume the small-country model is applicable.

any price above $3.00

Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question. After trade, at a world price of Pw, the net loss of producer surplus equals area(s)

B + C.

Answer the next question based on the data provided in the tables below regarding the production possibilities for rice and corn for two hypothetical nations, Wat and Xat. The mutually beneficial terms of trade will be

between 3 and 5 units of rice for 1 unit of corn.

Quotas on an imported product

hurt domestic consumers of the product.

To answer the next question, use the following graph showing the domestic demand and supply curves for a specific standardized product in a particular nation. If the world price for this product is $0.50, this nation will experience a domestic

shortage of 160 units, which it will meet with 160 units of imports.

If the U.S. government were to impose a quota on wristwatches imported from Switzerland, then the

total quantity of wristwatches (domestic and imported) consumed would decline as prices rise.