ECO2013

Refer to Figure 7-3. What is the value of domestic producer surplus without a quota?

$15.75 million

Refer to Table 7-6. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many belts will Estonia gain compared to the "without trade" numbers?

10

Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 7-3 illustrates the impact of the quota. Refer to Figure 7-3. If there was no quota, how many pounds of peanuts would domestic producers supply?

30 million

Refer to Table 7-6. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many swords will Estonia consume?

75

Figure 7-1 shows the U.S. demand and supply for leather footwear. Refer to Figure 7-1. Suppose the government allows imports of leather footwear into the United States. What will be the quantity of imports?

Q0

Figure 7-1 shows the U.S. demand and supply for leather footwear. Refer to Figure 7-1. Suppose the government allows imports of leather footwear into the United States. The market price falls to $24. What area represents consumer surplus?

R+S+T+U

Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food. Rob and Bill spent one day each fishing and picking berries. The table lists the pounds of output Rob and Bill produced. Refer to Table 7-1. Use the table above to select the statement that accurately interprets the data in the table.

Rob has a comparative advantage in catching fish.

Governments sometimes erect barriers to trade other than tariffs and quotas. Which of the following is not an example of this type of trade barrier?

a requirement that the employees of domestic firms that engage in foreign trade pay income taxes

A tax imposed by a government on imports of a good into a country is called

a tariff.

Despite the Obama administration's support of the Trans-Pacific Partnership (TPP), the AFL-CIO labor union has argued that the TPP will not

protect the environment. ensure safe imports. create jobs.

Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 7-2 shows the impact of this tariff. Refer to Figure 7-2. Without the tariff in place, the United States consumes

45 million pounds of coffee.

Madison and Austin own Cafe Ole'. Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour.Refer to Table 7-2. Select the statement that accurately interprets the data in the table.

Austin has a comparative advantage in making empanadas.

Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food. Rob and Bill spent one day each fishing and picking berries. The table lists the pounds of output Rob and Bill produced. Refer to Table 7-1. Use the table above to select the statement that accurately interprets the data in the table.

Bill has a comparative advantage in picking berries.

Mateo and Celeste produce custom saddles and spurs. Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.Refer to Table 7-3. Select the statement that accurately interprets the data in the table.

Mateo has a greater opportunity cost than Celeste for making saddles.

Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall.

South Korea

Dumping refers to

selling a product for a price below its cost of production.

A quota is

a limit placed on the quantity of goods that can be imported into a country.

Trade that is within a country or between countries is based on the principle of

comparative advantage.

Twenty-nine countries in Europe have formed the European Union (EU). After the EU was formed it

eliminated all tariffs among its member countries.

Domestically produced goods and services sold to other countries are referred to as

exports.

In order to avoid the imposition of other types of trade barriers, foreign producers will sometimes agree to limit their exports to a country. What are these types of agreements called?

voluntary export restraints

Whenever a buyer and a seller agree to trade, both must believe they will be made better off

whether the buyer and seller live in the same city or different countries.

Figure 7-1 shows the U.S. demand and supply for leather footwear. Refer to Figure 7-1. Under autarky, the producer surplus is area Group of answer choices

S + V

Which of the following is the best example of a quota?

a limit on the quantity of residential air conditioners that can be imported from a foreign country

U.S. factories produce ________ of the shoes New Balance sells in the United States.

about 25 percent

Imports are goods and services bought domestically

but produced in other countries.

Members of Congress promising to support each other's legislation is known as

logrolling.

Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 7-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.Refer to Table 7-6. Prior to trade, what was the opportunity cost to produce 1 belt in Morocco?

1 sword

Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 7-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.Refer to Table 7-6. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many swords will Morocco consume?

75

Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food. Rob and Bill spent one day each fishing and picking berries. The table lists the pounds of output Rob and Bill produced. Refer to Table 7-1. Use the table above to select the statement that accurately interprets the data in the table.

Bill has an absolute advantage in picking berries and Rob has an absolute advantage in catching fish.

Mateo and Celeste produce custom saddles and spurs. Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.Refer to Table 7-3. Select the statement that accurately interprets the data in the table.

Celeste has an absolute advantage in making saddles.

Which of the following statements is false?

Exports benefit trading countries because exports create jobs. Imports do not benefit trading countries because they result in a loss of jobs.

Madison and Austin own Cafe Ole'. Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour.Refer to Table 7-2. Select the statement that accurately interprets the data in the table.

Madison has an absolute advantage in making empanadas and tacos.

Mateo and Celeste produce custom saddles and spurs. Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.Refer to Table 7-3. Select the statement that accurately interprets the data in the table.

Neither Mateo nor Celeste has an absolute advantage in making spurs.

Refer to Figure 7-1. Suppose the government allows imports of leather footwear into the United States. What will be the quantity demanded?

Q2

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of the following would explain this pattern of trade?

Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter.

Which of the following statements is false?

Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall.

Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

criticize; causes losses to; eliminates

International trade

helps consumers but hurts firms that are less efficient than their foreign competitors.

Eliminating trade barriers does all of the following except

lowers incomes.

If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

opportunity

Free trade refers to trade between countries`

that is without restrictions.