Chapter 19 Quiz

If this figure represents the market for oil and the country imposes no tariffs on international trade, domestic consumption will be:

1,300 units.

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.

Which of the following is an example of the Lincoln Fallacy?

Pennsylvania workers are as productive growing oranges as they are growing potatoes

Which duo were famous (infamous?) for raising US tariffs during the Great Depression??

Smoot-Hawley

Which "Account" keeps track of the US imports of goods and services?

The Current Account

If the world price for the good in this figure 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.

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.

Trade restrictions based on national security concerns:

might be beneficial in certain cases, like vaccinations.

In most cases, trade restrictions will:

save some jobs and destroy other jobs.

If the government eliminated tariffs:

the gains in consumer surplus would outweigh the losses in producer surplus.

Government sometimes supports protectionist tariffs because:

the losses are spread over millions of consumers so the cost per consumer is small.

What is the size of the tariff in this figure?

$3

The primary cause of the US trade deficit is:

Too little savings in the US

Which of the following statements is TRUE about the removal of trade barriers?

Consumers benefit while some suppliers are harmed.

Which of the following is NOT a result of a tariff on imports?

Domestic production (output) decreases

What is the primary way that the US pays for its imported goods and services?

Exporting capital assets

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

Batiste's petition asked the French legislature for protection from which of the following?

The sun

Which statement provides an explanation for tariffs decreasing market efficiency?

The supply of goods is not produced by the lowest-cost suppliers.