Section 5 Chapter 9

A tax on an imported good is called a

tariff

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

A multilateral approach requires the agreement of two or more nations.

What is the fundamental basis for trade among nations?

Comparative advantage

Import quotas and tariffs produce some common results. Which of the following is not one of those common results?

Equal revenue is always raised for the domestic government.

Which of the following is not a commonly-advanced argument for trade restrictions?

The efficiency argument

When a country allows trade and becomes an exporter of a good, which of the following is not a consequence?

The losses of domestic consumers of the good exceed the gains of domestic producers of the good.

When a country that imports a particular good imposes a tariff on that good,

consumer surplus decreases and total surplus decreases in the market for that good.

When a country that imports a particular good imposes an import quota on that good,

consumer surplus decreases and total surplus decreases in the market for that good.

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

if Wheatland were to allow trade, it would import corn.

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

worse off if Colombia doesn't remove the subsidies in response to the threat.