Chp 25
If this figure represents the market for oil and the country imposes no tariffs on international trade, domestic consumption will be:
1,300 units
What is the dollar value of the deadweight loss created as a result of prohibiting trade in this market?
9,375
Consider the following two statements and select the best answer. I. The national security argument might be a valid argument for trade protection. II. Industries with spillover effects should be protected from foreign competition.
I is likely to be true, and II is likely to be false.
Consider the following statements: I. Relative to a no-trade situation, if the United States exported wheat, the U.S. domestic wheat price would rise and domestic production of wheat would expand. II. Relative to a no-trade situation, international trade causes the prices of all goods to rise.
I is true; II is false.
A $1 tariff results in:
a decrease in imports of 80 million units.
If the world price for a good is higher than the domestic price, a move to free international trade means that the domestic economy will become:
a net exporter of the good.
Enacting a tariff on a good for which the world supply is relatively inelastic and the local demand is relatively elastic results in:
a small deadweight loss and relatively larger tax revenues.
The United States has a comparative advantage in:
goods produced by skilled workers.
China retaliated to the tariffs placed on Chinese goods through President Trump by:
increasing tariffs on soybeans rather than aircrafts because it is easier to find substitute producers of soybeans than aircrafts.
In early 2018, President Trump imposed new tariffs on washing machines produced outside the United States because:
low- to medium-skilled jobs were under pressure from the international production of goods and from the automation of factories.
Trade restrictions based on national security concerns:
might be beneficial in certain cases, like vaccinations.
Because of pressure from the United States, the garment industry in Bangladesh dismissed 30,000 to 50,000 child laborers. This action:
resulted in many of the children turning to prostitution and taking jobs with worse conditions and lower pay.
In most cases, trade restrictions will:
save some jobs and destroy other jobs.
Government sometimes supports protectionist tariffs because:
the losses are spread over millions of consumers so the cost per consumer is small.
The paradox of trade restrictions on countries with child labor is that:
these restrictions aim to reduce child labor, but because they make the countries poorer, they actually cause more child labor.
What is the size of the tariff in this figure?
$3
Which of the following statement(s) is(are) TRUE? I. Protection is much more costly if other countries respond to U.S. tariffs with tariffs of their own. II. When President Trump increased tariffs on thousands of products, other countries retaliated with tariffs of their own. III. Retaliatory tariffs generally affect every industry in a country equally. IV. Retaliatory tariffs can be targeted to do political damage.
All are true
Which of the following statements is TRUE about the removal of trade barriers?
Consumers benefit while some suppliers are harmed.
Which of the following statement(s) is(are) TRUE? I. The price of washing machines increased after tariffs were placed on washing machines. II. The price of dryers increased after tariffs were placed on washing machines. III. Producers increased the price of washing machines less than predicted, but increased the price of dryers to spread the tariff costs over both washing machines and dryers.
I and II only
Which statement(s) is(are) TRUE? I. When U.S. consumers buy lower-priced imports, they have more money to buy other goods, leading to increased jobs in other industries. II. Free trade reduces total employment. III. When foreign producers receive U.S. dollars for their exports, some of these dollars are used to buy U.S. goods and assets, increasing employment in U.S. exporting industries.
I and III only