Chapter 9 Quiz Microeconomics

Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The deadweight loss caused by the tariff is A. $25 B. $50 C. $75 D. $100

B

If the Korean steel industry subsidizes the steel that it sells to the United States, the A. United States should protect its domestic steel industry from this unfair competition. B. harm done to U.S. steel producers from this unfair competition exceeds the gain to U.S. consumers of cheap Korean steel. C. harm done to U.S. steel producers is less than the benefit that accrues to U.S. consumers of steel. D. United States should subsidize the products it sells to Korea.

C

When a country allows trade and becomes an importer of a good, A. consumer surplus and producer surplus both increase. B. consumer surplus and producer surplus both decrease. C. consumer surplus increases and producer surplus decreases. D. consumer surplus decreases and producer surplus increases.

C

A tariff on a product makes A. domestic sellers better off and domestic buyers worse off. B. domestic sellers worse off and domestic buyers worse off. C. domestic sellers better off and domestic buyers better off. D. domestic sellers worse off and domestic buyers better off.

A

Refer to Figure 9-20. Given that Vietnam is a small country, it is apparent from the figure that A. Vietnam will export rice if trade is allowed. B. Vietnam will import rice if trade is allowed. C. Vietnam has nothing to gain either by importing or exporting rice. D. the world price will fall if Vietnam begins to allow its citizens to trade with other countries.

A

When a country allows trade and becomes an exporter of a good, A. domestic producers gain and domestic consumers lose. B. domestic producers lose and domestic consumers gain. C. domestic producers and domestic consumers both gain. D. domestic producers and domestic consumers both lose.

A

Refer to Scenario 9-2. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A. It decreases consumer surplus, increases producer surplus, and decreases total surplus. B. It decreases consumer surplus, increases producer surplus, and increases total surplus. C. It decreases consumer surplus, decreases producer surplus, and decreases total surplus. D. It increases consumer surplus, increases producer surplus, and increases total surplus.

B

Refer to Figure 9-5. Without trade, consumer surplus amounts to A. $810 B. $1620 C. $3240 D. $6480

C

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that A. an import quota has no effect on consumer surplus, while a tariff decreases consumer surplus. B. an import quota has no effect on producer surplus, while a tariff decreases producer surplus. C. a tariff raises total surplus, while an import quota does not. D. a tariff raises revenue for that country's government, while an import quota does not.

D