econ final hw 8

10. (Figure: The Market for Computers) Look at the figure The Market for Computers. In the figure, producer surplus with international trade would be area or areas: A) X + Y + Z. B) W + X + Y. C) X + Y. D) Y.

10. a

If a nation imports a good when the economy is opened to trade, the domestic price of the good will ________ and domestic consumption will ________. A) rise; rise B) rise; fall C) fall; rise D) fall; fall

4. C 5. A 6. D 7. B 8. D 9. B 10. A 11. A 12. A 13. D 14. C 15. A 16. A 17. B 18. D 19. C 20. B

5. (Figure: Domestic Market for Digital Cameras) Look at the figure The Domestic Market for Digital Cameras. Total surplus before international trade is equal to the area: A) A + B + C. B) A + B. C) A + B - D - E. D) A.

5. A

11. When a domestic market begins to export goods to and import goods from a foreign market: A) producers in the exporting industry may be better off. B) consumers of the imported good may be worse off. C) consumers of the exported good may be better off. D) producers in the importing industry are better off.

11. a

12. (Figure: The Market for Laptop Sleeves) Look at the figure The Market for Laptop Sleeves. Identify the area or areas of consumer surplus when a tariff raises the domestic price from the world price to P1. A) A + B B) A + B + C + D + E + F C) A + C + G D) D + F

12. a

13. (Figure: The Market for Laptop Sleeves) Look at the figure The Market for Laptop Sleeves. Identify the area or areas of deadweight loss when a tariff raises the domestic price from the world price to P1. A) A + B B) C + D + E + F C) D + E + F D) D + F

13. d

14. (Figure: The Market for Laptop Sleeves) Look at the figure The Market for Laptop Sleeves. Identify the area or areas of government tax revenue when a tariff raises the domestic price from the world price to P1. A) D + E + F B) D + F C) E D) B

14. c

15. If the United States placed larger tariffs on all textiles, then: A) domestic producer surplus would increase. B) domestic consumer surplus would increase. C) domestic total surplus would increase. D) domestic producer surplus would decrease.

15. a

16. The United States places a tariff on imported Brazilian ethanol. The impact of this tariff on the domestic ethanol market is a ________ domestic price, ________ consumer surplus, and ________ producer surplus. A) higher; less; more B) lower; less; more C) higher; more; less D) higher; less; less

16. a

17. The most likely effects of tariffs and/or quotas are to ________ prices and to ________ consumption of the protected goods in the importing country. A) raise; raise B) raise; lower C) lower; raise D) lower; lower

17. b

18. (Figure: The Market for Calculators) Look at the figure The Market for Calculators. The world price, PW, equals $100. When the economy moves from autarky to free trade, consumer surplus rises by area ________ and producer surplus falls by ________. A) B + K + L; B B) B + C + K + L; B + C + K + L C) B + C+ H + I + K + L; B + C + H + I D) B + C + G + H + I + J + K + L; B + C

18. d

19. (Figure: The Market for Calculators) Look at the figure The Market for Calculators. The world price, PW, equals $100. The government imposes a quota restricting imports to 25 calculators. The domestic price rises to ________ and the quota rent is equal to area ________. A) $120; K + L B) $150; K + H + I + L C) $120; H + I D) $150; G + H + I + J

19. c

2. (Figure: The Market for Roses) Look at the figure The Market for Roses. In the figure, consumer surplus with international trade would be area or areas: A) W + X + Y. B) Z. C) W + X + Z. D) W.

2. C

20. (Figure: The Market for Calculators) Look at the figure The Market for Calculators. The world price, PW, equals $100. The government imposes an import tariff of $20 per calculator. Compared with the free trade situation, the tariff leads to a deadweight loss equal to areas: A) K + L. B) G + J. C) G + H + I + J. D) There is no deadweight loss, since the tariff revenue the government receives offsets any losses.

20. b

3. (Figure: The Market for Roses) Look at the figure The Market for Roses. In the figure, producer surplus with international trade would be area or areas: A) X + Y + Z. B) W + X + Y. C) X + Y. D) Y.

3. D

6. (Figure: Domestic Market for Digital Cameras) Look at the figure The Domestic Market for Digital Cameras. Total surplus after international trade ________ by the area ________. A) rises; B + D + E B) falls; C C) rises; C D) rises; D + E

6. D

(Figure: The Domestic Supply and Demand for SUVs in the United States) Look at the figure The Domestic Supply and Demand for SUVs in the United States. Suppose the world price equals $50,000 and there is free trade. The United States would ________ SUVs. A) import 6 million B) export 6 million C) export 2 million D) import 2 million

7. B

8. (Figure: The Domestic Supply and Demand for SUVs in the United States) Look at the figure The Domestic Supply and Demand for SUVs in the United States. Suppose the world price equals $50,000 and there is free trade. In the United States, consumer surplus would ________ and producer surplus would ________ with free trade.

8. d

9. (Figure: The Market for Computers) Look at the figure The Market for Computers. In the figure, consumer surplus with international trade would be area or areas: A) W + X + Y. B) W. C) Y. D) W + X.

9. b

1. Bangladesh exports shirts, the making of which is labor-intensive, to the United States. The likely source of Bangladesh's comparative advantage in shirts is: A) a hotter climate, which makes it possible to produce shirts outdoors, eliminating the need for factory buildings and hence reducing costs. B) superior production technology. C) that in comparison with the United States, Bangladesh is a labor-abundant country. D) the higher labor productivity in Bangladesh.

c) that in comparison with the United States, Bangladesh is a labor-abundant country.