quiz 15

Refer to Exhibit 34-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports). The government collects tariff revenues on sugar imports in the amount of __________ million.

$500

Refer to Exhibit 34-10. Danielle's opportunity cost of mowing the lawn is

2.00 clean houses.

Refer to Exhibit 34-9. For country Y, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

2/3

Refer to Exhibit 34-9. In the no specialization-no trade case, suppose country X produces and consumes 100 units of good A and 20 units of good B. Country Y produces and consumes 20 units of good A and 60 units of good B. If the two countries specialize and trade, and the actual amounts traded are 125 units of good A for 25 units of good B, how many more units of good A will country X consume by specializing and trading?

75

Refer to Exhibit 34-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports). Consumers' surplus is equal to the area __________ while producers' surplus is equal to the area __________.

A + B; C + G

Refer to Exhibit 34-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. The tariff results in a net loss to society equal to area(s)

DBE + FCG.

Refer to Exhibit 34-12. PW is the price that exists in a free world market. A quota is imposed and imports are Q4 - Q3. Importers gain revenues equal to the area __________.

GHJK

Refer to Exhibit 34-12. PW is the price that exists in a free world market. With the imposition of a quota that limits imports to Q4 - Q3, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

LGK + JHI.

Refer to Exhibit 34-12. PW is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q4 - Q3, price will rise to

P1.

Refer to Exhibit 34-11. If the world price (PW) is operational in the market, then U.S. imports equal

Q2 - Q1.

Raquel, who earns $900 a week, bought a television set and gained $70 consumers' surplus. What price did she pay for the good?

There is not enough information to answer the question.

Refer to Exhibit 34-9. Which of the following statements is true?

a, b, and c

The answer is: "A tax on imports." What is the question?

c and d

The difference between the highest amount a buyer would be willing to pay for a good and the amount she actually pays for it is

consumers' surplus.

Refer to Exhibit 34-1. Country A is the lower opportunity cost producer of

good X.

Refer to Exhibit 34-3. The world price is PW. If a tariff is imposed, the price rises to PW + T. Because of the tariff, producers' surplus is __________ by an amount equal to the area of __________.

increased; 1

One country has a comparative advantage over another country in the production of a good if it

is a lower opportunity cost producer of the good.

Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Smith is

making the mistake of believing that high wages mean high costs.

Refer to Exhibit 34-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area

none of the above

Refer to Exhibit 34-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is PW. If there is a policy change such that imports are prohibited, the price becomes PN. U.S. producers are better off if imports are __________; specifically, their producers' surplus changes by area __________.

prohibited; PNBDPW