Econ 1113 -

Brazil and Colombia can both produce either bananas or coffee. Brazil can produce either 16 pounds of coffee and 0 pounds of bananas or 64 pounds of bananas and 0 pounds of coffee. Colombia can produce either 20 pounds of coffee and 0 pounds of bananas or 40 pounds of bananas and 0 pounds of coffee. The opportunity cost of producing 1 pound of bananas for Colombia is ______ pounds of coffee.

0.5

Kate has a 20-square-foot plot of land in her backyard that she uses to grow tomatoes and lettuce. Every square foot of land can produce either 5 tomatoes or 3 heads of lettuce each summer. Her neighbor, Jim, has a 30-square-foot plot of land that has a lot more shade than Kate's, which is better for lettuce but worse for tomatoes. Every square foot of Jim's land can produce either 3 tomatoes or 6 heads of lettuce. Propose terms of trade that will benefit both Kate and Jim: 1 head of lettuce = X tomatoes

0.5T < X < 1.67T

Suppose that both countries open up to trade, and the United States and India decide to trade 1 tractor for 3 pounds of rice (1T = 3R) and that India needs 3 tractors. India's gains from trade are ______. The United States' gains from trade are ______. Suppose that both countries open up to trade, and the United States and India decide to trade 1 tractor for 3 pounds of rice (1T = 3R) and that India needs 3 tractors. India's gains from trade are ______. The United States' gains from trade are ______.

1 tractor and 1 pound of rice; 1 tractor and 1 pound of rice

A numerical limit on the amount of a good that can be imported is a(n)

1. domestic market w no international trade 2. market w quota 3. free trade market

Consider the market for butter shown in the graph. The quota rent is $_____

15

The federal income tax was established in . (Enter the year.)

1913

Brazil and Colombia can both produce either bananas or coffee. Brazil can produce either 16 pounds of coffee and 0 pounds of bananas or 64 pounds of bananas and 0 pounds of coffee. Colombia can produce either 20 pounds of coffee and 0 pounds of bananas or 40 pounds of bananas and 0 pounds of coffee The opportunity cost of producing 1 pound of coffee for Colombia is ______ pounds of bananas.

2

Consider the market for cotton shown in the graph. As the graph indicates, in the absence of international trade, the domestic price of cotton would be $1 per pound. If the market is opened to international trade, the price would decrease to the world price of $0.40 per pound. Suppose domestic producers dislike the low price of $0.40 per pound and would prefer that it increase to $0.60 per pound. With the quota in place, ______ tons would be produced domestically.

300

Brazil and Colombia can both produce either bananas or coffee. Brazil can produce either 16 pounds of coffee and 0 pounds of bananas or 64 pounds of bananas and 0 pounds of coffee. Colombia can produce either 20 pounds of coffee and 0 pounds of bananas or 40 pounds of bananas and 0 pounds of coffee.

4

Now suppose South Africa opens up to trade, as in the small-country model. South Africa will ______ gasoline at a price ______

4

Both the United States and India produce two goods: tractors and rice. The United States can produce either 8 tractors or 16 pounds of rice. India can produce either 4 tractors or 20 pounds of rice. Suppose the United States and India do not trade with each other, production is characterized by constant opportunity costs, and each country uses half of its resources for tractor production and half for rice production. The United States will produce ______. India will produce ______.

4 tractors and 8 pounds of rice; 2 tractors and 10 pounds of rice

Consider the market for cotton shown in the graph. As the graph indicates, in the absence of international trade, the domestic price of cotton would be $1 per pound. If the market is opened to international trade, the price would decrease to the world price of $0.40 per pound. Suppose domestic producers dislike the low price of $0.40 per pound and would prefer that it increase to $0.80 per pound. With the quota in place, ______ tons would be produced domestically.

400

Consider the domestic market for oil shown in the graph. Suppose the world price of oil is $60 per barrel. With a tariff of $20 per barrel, the tariff revenue collected by the government is $______ million. ______ is generated by the tariff.

40; Deadweight loss

Assume the country of South Africa was closed to international trade, and existed in a state of autarky. In the market for gasoline, equilibrium will occur at a price of ______ rand per liter and ______ million liters of gasoline traded.

5,40

assume the country of South Africa was closed to international trade, and existed in a state of autarky. In the market for gasoline, equilibrium will occur at a price of ______ rand per liter and ______ million liters of gasoline traded.

5,40

he United States and India both produce two goods: tractors and rice. The United States can produce either 8 tractors or 16 pounds of rice. India can produce either 4 tractors or 20 pounds of rice. Suppose that, currently, both the United States and India spend half of their resources producing tractors and half of their resources producing rice. There will be ______ and ______ produced in total.

6 tractors; 18 pounds of rice

If the world price for salt is $40 per ton, and Canada allows free trade, ______ tons of salt would be imported into Canada. Suppose the Canadian government imposes a tariff on salt of $20 per ton. The new price indicating the world price plus the tariff would be __

60; $60/ton

he United States and India both produce two goods: tractors and rice. The United States can produce either 8 tractors or 16 pounds of rice. India can produce either 4 tractors or 20 pounds of rice. Suppose that, currently, both the United States and India spend half of their resources producing tractors and half of their resources producing rice. There will be ______ tractors and ______ pounds of rice produced in total.

6; 18

Multiple Choice Question The United States and India both produce two goods: tractors and rice. The United States can produce either 8 tractors or 16 pounds of rice. India can produce either 4 tractors or 20 pounds of rice. If the United States and India specialize completely in the good for which each has a comparative advantage, then there will be ______ and ______ produced in total.

8 tractors; 20 pounds of rice

With a tariff of $40 per barrel, the tariff revenue collected by the government is $______ million. ______ is generated by the tariff.

80; Deadweight loss

Consider the market for pineapples in Costa Rica shown below where pineapples are in abundant supply. Suppose a lack of transportation means Cost Rica cannot trade with other countries. The consumer surplus for domestic pineapple consumers is represented by area(s) ______. In the absence of international trade, the producer surplus for domestic pineapple producers is represented by area(s) ______.

A + B + C; E + F

Consider the market for bottled water in France. France is the world's largest importer of bottled water, accounting for about one-quarter of global water imports. Given this situation, assume the world price of bottled water is below the domestic price in the French economy, as shown in the graph. Suppose France does not trade with other countries. The area that represents the consumer surplus in the absence of international trade is ______. The area that represents the producer surplus in the absence of international trade is ______.

A; B + E

After the Japanese agreed to voluntary export restrictions,:

Japanese cars were more expensive for U.S. buyers.

Kate has a 20-square-foot plot of land in her backyard that she uses to grow tomatoes and lettuce. Every square foot of land can produce either 5 tomatoes or 3 heads of lettuce each summer. Her neighbor, Jim, has a 30-square-foot plot of land that has a lot more shade than Kate's, which is better for lettuce but worse for tomatoes. Every square foot of Jim's land can produce either 3 tomatoes or 6 heads of lettuce. If Kate and Jim decide to specialize, ______ should produce lettuce and ______ should produce tomatoes

Kate; Jim

When a country is opening up to trade, resources in the economy flow:

When a country is opening up to trade, resources in the economy flow:

As long as the terms of trade:

are between both countries' opportunity costs, trade will benefit both countries.

Free trade is trade:

between nations that is free from barriers.

Suppose the U.S. specializes in producing lumber and its neighbor Canada specializes in producing steel. When they trade with each other:

both countries will likely consume more lumber and steel.

n an economy of two goods, a country cannot have the advantage in both goods.

comparative

When there are barriers to trade

consumers suffer producers gain and total wealth decreases.

Consider the two production possibilities frontiers (PPFs) shown in the graphs. If the two countries do not specialize, Country A would likely _____

coose point Ma

With a quota,:

domestic producers gain because they sell more at higher prices.

When a country opens its markets to international trade, if the world price is greater than the domestic equilibrium price

domestic quantity supplied will rise so total output increases.

Graphically, total surplus is the entire area between the supply and demand curves from a quantity of zero to the quantity traded.

economic

Consider the market for pineapples in Costa Rica shown below where pineapples are in abundant supply. suppose that Costa Rica opens its market to international trade and that the world price, Pw, is greater than the domestic price, Pe. The consumer surplus for domestic pineapple consumers ______, while the producer surplus for domestic pineapple producers ____

falls; rises

In 2014, the United States imposed tariffs on nine different steel-producing countries because:

firms from these countries were "dumping" their products on the U.S. market.

When a country opens its markets to international trade, if the world price is more than the domestic equilibrium price,:

foreign quantity demanded rises so total output increases.

Consider the market for bananas in Guatemala shown below where bananas are in abundant supply. The net benefit to Guatemala of ______ can be represented as the area ______.

free trade; D

If the government sets a tariff too ,(high/low) there will be so few imports that the government won't collect much money.

high

hen there is a quota, the quota price is (lower/higher) than the world price and the total quantity traded is (lower/highe

higher, lower

Now suppose South Africa opens up to trade, as in the small-country model. South Africa will ______ gasoline at a price _____

import; between 4 and 5 rand per liter

The model and concepts used to develop the economics of __ are similar to those used to illustrate the effects of:

international trade; trade between individuals.

If the government sets a tariff too , the government won't collect enough revenue per unit to add up to much

low

eople in different countries trade among one another to get a (higher/lower) price than they would have to pay for the same produced domestically

lower

Consumer surplus is the difference between the:

maximum price consumers are willing and able to pay for a good or a service and the price they actually pay.

When a country opens up to trade, domestic industries that make products that can be:

mported will contract and industries that have products to export will expand.

In the small-country model,:

opportunity cost is not constant.

When a country is opening up to trade, resources in the economy flow:

oward the goods for which producers have a comparative advantage.

with quota

part of the loss to consumers is captured as quota rents by those who own the rights to the quota.

Consider the two production possibilities frontiers (PPFs) shown in the graphs. If the two countries do specialize, Country A would likely ______, while Country B would likely ____

produce at point CA; produce at point WB

When trade occurs, is created.

profit

A numerical limit on the amount of a good that can be imported is an import

quota

Generally, a(n) is designed to protect or encourage the growth of a specific industry.

quota

Sugar is significantly more expensive in the United States than it is in Mexico and Canada because of the sugar --

quota

here is a(n) on sugar imports in the United States.

quota

The effect of a tariff is to:

reduce imports and increase the domestic price.

Consider the market for bottled water in France. France is the world's largest importer of bottled water, accounting for about one-quarter of global water imports. Given this situation, assume the world price of bottled water is below the domestic price in the French economy, as shown in the graph. Suppose France can import water from other countries. The consumer surplus ______, while the producer surplus ______.

rises; falls

Consider the market for bananas in Guatemala shown below where bananas are in abundant supply. Producers generally ______, while consumers generally ______.

support exports; oppose exports

revenue equals a tariff times the quantity imported. (Use one word for the blank.)

tariff

With a quota,:

the loss to society is represented by the deadweight loss.

Opportunity cost is

the value of the opportunity that you give up when you choose one activity instead of another.

Exchanging currencies is international

trade

As of 2016, more than 15% of all goods and services consumed in the United States were produced abroa

true

Increased access to trade cause more scope for income growth in the country.

true

In the small-country model, each country has a(n) -sloping supply of a product and cost is not consta

up, opportunity

n the small-country model, each country has a(n) -sloping supply of a product and cost is not constant.

up, opportunity

n the 1980s, the U.S. government established a type of import quota called a:

voluntary export restriction.

The price of a good, service, or resource that prevails in the world market is the:

world price