Quiz 7: Global Markets in Action

Goods and services that we buy from other countries are our A)quota goods. B)exports. C)imports. D)normal goods. E)comparative goods and services.

The goods and services we sell to people in other countries are our A)normal goods. B)quota goods. C)exports. D)imports. E)inferior goods.

The fundamental force that drives international trade is A)absolute advantage. B)tariffs. C)the balance of trade. D)export advantage. E)comparative advantage.

The fundamental force that drives international trade is A)comparative advantage. B)absolute advantage. C)government revenue. D)low wage rates in developing economies. E)exploitation of developing economies.

A country A)imports those goods in which it has a comparative advantage. B)exports those goods in which it has a comparative advantage. C)imports goods produced in countries with lower wage rates. D)exports goods produced by domestic industries with low wages relative to its trading partners. E)exports those goods in which it has an absolute advantage.

Canada has a comparative advantage in producing airplanes if A)it can produce airplanes at a lower dollar cost than another country. B)it can produce a larger quantity of airplanes than another country. C)it has a larger quantity of skilled aviation workers than another country. D)it can produce airplanes at a higher opportunity cost than another country. E)it can produce airplanes at a lower opportunity cost than another country.

Prior to international trade,if the price of good X is lower in country A than in country B, A)country B has an absolute advantage in the production of good X. B)country B has a comparative advantage in the production of good X. C)country A has an absolute advantage in the production of good X. D)country A has a comparative advantage in the production of good X. E)country B should stop producing good X.

Which of the following statements about Canada's international trade in 2016 is correct? A)The value of Canada's imports exceeded the value of Canada's exports. B)The value of Canada's exports was about 45 percent of the value of total expenditure in Canada. C)Canada imported only goods. D)Canada was the world's second largest trader. E)Canada exported only goods.

Canada has a comparative advantage in producing hardwood if the Canadian price of hardwood before international trade is A)equal to the world price. B)greater than the world price. C)falling. D)at least double the world price. E)less than the world price.

Compared to the situation before international trade,after Canada exports a good,production in Canada ________ and consumption in Canada ________. A)increases;increases B)increases;decreases C)decreases;increases D)decreases;decreases E)increases;does not change

Compared to the situation before international trade,after Canada imports a good,production in Canada ________ and consumption in Canada ________. A)increases;increases B)increases;decreases C)decreases;increases D)decreases;decreases E)does not change;increases

Which of the following is a Canadian service export? A)a Canadian buys dinner while travelling in Switzerland B)a Swiss buys dinner while travelling in Canada C)a Canadian buys a clock made in Switzerland D)a Swiss buys a computer made in Canada E)a Canadian buys a Canadian computer in Switzerland

Refer to the table below to answer the following questions. Table 7.1.1 Glazeland's Doughnut Market -Table 7.1.1 shows Glazeland's doughnut market before international trade.Glazeland opens up to international trade.If the world price is $0.60 a doughnut then Glazeland will produce ________ doughnuts and will ________ doughnuts. A)2 million;import 3 million B)4 million;import 1 million C)4 million;export 1 million D)5 million;import 3 million E)5 million;export 3 million

Refer to the table below to answer the following questions. Table 7.1.1 Glazeland's Doughnut Market -Table 7.1.1 shows Glazeland's doughnut market before international trade.Glazeland opens up to international trade.If the world price is $0.40 a doughnut then Glazeland will produce ________ doughnuts and will ________ doughnuts. A)3 million;import 3 million B)3 million;export 3 million C)4 million;import 1 million D)4 million;export 1 million E)6 million;export 3 million

Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.If Canada did not trade with the rest of the world,then the equilibrium price of lumber would be ________ in Canada than the rest of the world,and the equilibrium price of wine would be ________ in Canada than the rest of the world. A)lower;higher B)higher;lower C)higher;higher D)lower;lower E)the same or lower;the same or higher

Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.Canada has a comparative advantage in producing ________.The rest of the world has a comparative advantage in producing ________. A)lumber;wine B)wine;lumber C)wine;wine D)lumber;lumber E)lumber and wine;lumber and wine

In one year,Brazil exported more than 1.8 billion kilograms of coffee to the rest of the world.We can conclude that A)Brazil has comparative advantage in coffee production. B)Brazil has an absolute advantage in coffee production. C)the rest of the world has a comparative advantage in coffee production. D)the rest of the world has an absolute advantage in coffee production. E)Brazil's government has placed a tariff on coffee.

Choose the correct statement. A)Exports include goods and services. B)Imports include goods but not services. C)Imports include services but not goods. D)Exports include goods but not services. E)Exports include services but not goods.

Suppose that the world price of eggs is $1 a dozen,Canada does not trade internationally,and the equilibrium price of eggs in Canada is $3 a dozen.Then Canada begins to trade internationally. The price of eggs in Canada ________.Canadian consumers buy ________ eggs. A)rises;more B)rises;less C)falls;more D)falls;less E)rises;the same quantity of

Suppose that the world price of eggs is $1 a dozen,Canada does not trade internationally,and the equilibrium price of eggs in Canada is $3 a dozen.Then Canada begins to trade internationally. Canadian farmers produce ________ eggs.Canada ________ eggs. A)more;imports B)more;exports C)less;exports D)less;imports E)the same quantity of;imports

Refer to the table below to answer the following questions. Table 7.1.2 -Table 7.1.2 shows a country's demand and supply schedules for a good.At what world price would the country import this good? A)at exactly $8 a unit B)any price above $8 a unit C)a price of $10 a unit D)a price of $20 a unit E)a price below $8 a unit

Refer to the table below to answer the following questions. Table 7.1.2 -Table 7.1.2 shows a country's demand and supply schedules for a good.Suppose the world price is $4 a unit.The country A)imports 20 units. B)exports 20 units. C)imports 10 units. D)exports 10 units. E)imports 30 units.

A market is open to international trade.At the world price,the quantity demanded is 150 units and the quantity supplied is 200 units.This country will A)import 50 units. B)export 200 units. C)import 150 units. D)import 200 units. E)export 50 units.

Refer to the table below to answer the following question. Table 7.1.3 -Table 7.1.3 shows a country's demand and supply schedules for a good.At what world price would the country export this good? A)at only $8 a unit B)any price below $8 C)a price of $6 a unit D)a price of $4 a unit E)any price above $8 a unit

Refer to the figure below to answer the following questions. Figure 7.1.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt. -In Figure 7.1.1,with international trade,Canadians buy ________ million shirts per year. A)48 B)32 C)16 D)24 E)56

Refer to the figure below to answer the following questions. Figure 7.1.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt. -In Figure 7.1.1,with international trade,________ million shirts per year are produced in Canada. A)48 B)32 C)20 D)56 E)16

Refer to the figure below to answer the following questions. Figure 7.1.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt. -In Figure 7.1.1,with international trade,Canada ________ million shirts per year. A)imports 32 B)imports 48 C)exports 16 D)exports 32 E)imports 16

Refer to the figure below to answer the following questions. Figure 7.1.2 The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter. -In Figure 7.1.2,with international trade,Canadian firms buy ________ helicopters per year. A)240 B)480 C)720 D)360 E)600

Refer to the figure below to answer the following questions. Figure 7.1.2 The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter. -In Figure 7.1.2,with international trade,________ helicopters per year are produced in Canada. A)360 B)480 C)720 D)240 E)600

Refer to the figure below to answer the following questions. Figure 7.1.2 The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter. -In Figure 7.1.2,Canada ________ helicopters per year. A)exports 480 B)exports 720 C)imports 480 D)imports 240 E)exports 240

Consider a country that sells some of its goods as exports.Who does NOT benefit? A)domestic consumers B)domestic producers C)workers in the domestic industry D)foreign consumers E)suppliers to the domestic industry

Who benefits from imports? A)domestic consumers B)domestic producers C)foreign consumers D)domestic workers in the industry E)suppliers to the domestic industry

A country opens up to trade and becomes an importer of some good.Consumer surplus on that good ________,and producer surplus on that good ________. A)increases;decreases B)decreases;decreases C)decreases;increases D)increases;increases E)increases;does not change

A country opens up to trade.In an import industry,surplus is redistributed from A)producers to consumers. B)consumers to producers. C)government to consumers. D)producers to government. E)government to producers.

A country opens up to trade and becomes an exporter of a good.Consumer surplus ________ and producer surplus ________. A)decreases;increases B)increases;decreases C)remains unchanged;decreases D)remains unchanged;increases E)decreases;decreases

A country opens up to trade.In an export industry,surplus is redistributed from A)consumers to producers. B)producers to consumers. C)producers to government. D)government to consumers. E)government to producers.

Refer to the figure below to answer the following questions. Figure 7.2.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt. -In Figure 7.2.1,if the economy moves from no trade to international trade,consumer surplus in Canada ________ by ________. A)increases;$320 million B)decreases;$192 million C)increases;$192 million D)decreases;$320 million E)increases;$576 million

Refer to the figure below to answer the following questions. Figure 7.2.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt. -In Figure 7.2.1,if the economy moves from no trade to international trade,producer surplus in Canada ________ by ________. A)increases;$320 million B)decreases;$192 million C)increases;$192 million D)decreases;$320 million E)decreases;$256 million

Refer to the figure below to answer the following questions. Figure 7.2.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt. -In Figure 7.2.1,if the economy moves from no trade to international trade,total surplus in Canada ________ by ________. A)increases;$128 million B)decreases;$192 million C)increases;$320 million D)decreases;$256 million E)decreases;$128 million

Refer to the figure below to answer the following questions. Figure 7.2.2 The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter. -In Figure 7.2.2,if the economy moves from no trade to international trade,consumer surplus in Canada ________ by ________. A)decreases;$2.88 billion B)decreases;$1.92 billion C)increases;$2.88 billion D)increases;$4.8 billion E)increases;$1.92 billion

Refer to the figure below to answer the following questions. Figure 7.2.2 The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter. -In Figure 7.2.2,if the economy moves from no trade to international trade,producer surplus in Canada ________ by ________. A)decreases;$2.88 billion B)decreases;$1.92 billion C)increases;$4.8 billion D)increases;$3.6 billion E)decreases;$4.8 billion

Refer to the figure below to answer the following questions. Figure 7.2.2 The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter. -In Figure 7.2.2,if the economy moves from no trade to international trade,total surplus in Canada ________ by ________. A)decreases;$2.56 billion B)increases;$4.8 billion C)decreases;$3.6 billion D)decreases;$1.92 billion E)increases;$1.92 billion

Canada's producer surplus ________ when Canada imports a good,and Canada's producer surplus ________ when Canada exports a good. A)increases;increases B)increases;decreases C)decreases;increases D)decreases;decreases E)does not change;does not change

When Canada exports a good,Canada's consumer surplus ________ and Canada's total surplus ________. A)increases;increases B)increases;decreases C)increases;increases or decreases depending on the change in producer surplus D)decreases;decreases E)decreases and Canada's producer surplus increases;does not change

When Canada exports a good,the ________ in Canada's consumer surplus is ________ the increase in Canada's producer surplus. A)increase;smaller than B)increase;larger than C)decrease;smaller than D)decrease;equal to E)decrease;larger than

Canada exports athletic coaching services and imports computer tech support.The price of athletic coaching services in Canada is ________ with international trade than without international trade.As a result of trade in athletic coaching services,the Canadian producer surplus from athletic coaching services ________. A)higher;does not change B)lower;increases C)lower;decreases D)higher;increases E)higher;decreases

Canada exports athletic coaching services and imports computer tech support.The price of computer tech support in Canada is ________ with international trade than without international trade.As a result of trade in computer tech support,the Canadian producer surplus from computer tech support ________. A)higher;increases B)lower;decreases C)lower;does not change D)higher;decreases E)lower;increases

Refer to the figure below to answer the following question. Figure 7.2.3 -Refer to Figure 7.2.3.The graph shows the market for shoes in Canada.The world price of a pair of shoes is $20.Moving from a situation of no international trade to a situation of free international trade,Canadian consumer surplus ________ and Canadian producer surplus ________. A)increases by area A + B;decreases by area B B)increases by area B;decreases by area B C)increases by area A;decreases by area B D)decreases by area A + B;increases by area B E)decreases by area B;increases by area A

Refer to the figure below to answer the following question. Figure 7.2.4 -Refer to Figure 7.2.4.The graph shows the demand for shoes in Brazil,D_B,the supply of shoes produced in Brazil,S_B,and the market equilibrium in Brazil when it does not trade internationally.If the world price of a pair of shoes is $20 and Brazil opens up and trades internationally,producer surplus in Brazil ________ and consumer surplus in Brazil ________. A)increases by area C + D;decreases by area C B)increases by area C;decreases by area C and a deadweight loss equal to area D arises C)increases by area D;decreases by area D D)decreases by area C;increases by area C + D E)decreases by area C + D;increases by area C

In one year,Brazil exported more than 1.8 billion kilograms of coffee to the rest of the world.We can conclude that A)Brazil's coffee producers lose from this trade. B)coffee consumers in the rest of the world lose from this trade. C)Brazil's coffee consumers lose from this trade. D)coffee producers in the rest of the world gain from this trade. E)the deadweight loss in Brazil's coffee market is large and growing.

A country moves from a situation of no trade to a situation where a good is exported.In the exporting country the price of the good ________,and producer surplus ________. A)rises;increases B)falls;decreases C)does not change;increases D)does not change;decreases E)rises;decreases

A country moves from a situation of no trade to a situation where a good is imported.In the importing country the price of the good ________,and producer surplus ________. A)rises;increases B)falls;decreases C)does not change;increases D)does not change;decreases E)rises;decreases

A country moves from a situation of no trade to a situation where it exports a good.Which of the following does not occur in the market for this good in the exporting country? A)Deadweight loss increases. B)Consumer surplus decreases. C)Producer surplus increases. D)Workers in the domestic industry gain. E)Total surplus increases.

A country moves from a situation of no trade to a situation where it imports a good.Which of the following does not occur in the market for this good in the importing country? A)Deadweight loss decreases. B)Consumer surplus increases. C)Producer surplus decreases. D)Workers in the domestic industry lose. E)Total surplus increases.

International trade benefits the A)exporting country but not the importing country. B)importing country but not the exporting country. C)government of the importing country. D)government of the exporting country. E)exporting country and the importing country.

A tariff is a tax that is imposed by the ________ country when an ________ good crosses its international boundary. A)exporting;imported B)importing;exported C)exporting;exported D)importing;imported E)importing or exporting;imported or exported

A tax that is imposed by the importing country when an imported good crosses its international boundary is called A)an import quota. B)an income tax. C)a voluntary export restraint. D)a tariff. E)a sales tax.

Tariffs and import quotas differ in that A)one is a form of trade restriction,while the other is not. B)one is a tax,while the other is a limit. C)one is imposed by the government,while the other is imposed by the private sector. D)one is legal,while the other is not. E)one increases imports,while the other decreases imports.

Tariffs and import quotas both result in A)lower levels of domestic production. B)the domestic government gaining revenue. C)lower levels of imports. D)higher levels of domestic consumption. E)the elimination of deadweight loss.

If Canada imposes a tariff on imported cars, A)Canada's demand curve for cars shifts rightward. B)Canada's demand curve for cars shifts leftward. C)Canada's supply curve of cars shifts rightward. D)Canada's supply curve of cars shifts leftward. E)the price of a car in Canada rises but neither Canada's demand curve nor Canada's supply curve shifts.

Which of the following statements concerning tariffs is NOT true? A)A tariff results in a deadweight loss. B)A tariff creates revenue for the government. C)A tariff decreases international trade. D)A tariff leaves the price of imports unchanged. E)A tariff decreases consumer surplus.

If a country imposes a tariff on an imported good,the tariff ________ the price in the importing country and ________ the quantity of imports. A)raises;increases B)raises;does not change C)lowers;does not change D)lowers;increases E)raises;decreases

A tariff imposed by Canada on Japanese cars ________ the price of cars in Canada and ________ the quantity of Japanese cars imported into Canada. A)raises;increases B)raises;decreases C)lowers;increases D)lowers;decreases E)raises;does not change

Choose the statement that is incorrect.If Canada imposes a tariff of $1 per imported shirt,the tariff A)raises the price of a shirt paid by Canadian consumers. B)benefits Canadian shirt producers. C)decreases imports of shirts into Canada. D)creates a deadweight loss. E)increases total surplus.

If Canada imposes a tariff on imported steel,the tariff A)raises the Canadian price of imported steel. B)decreases the Canadian production of steel. C)increases the total Canadian consumption of steel. D)decreases employment in the Canadian steel industry. E)increases Canadian consumer surplus.

Suppose the country of Mooland imposes tariffs on imported beef from the country of Aqualand.As a result of the tariffs,the A)price of beef in Mooland falls. B)quantity of beef exported by Mooland increases. C)quantity of beef imported by Mooland decreases. D)quantity of beef imported by Mooland increases. E)price of beef in Mooland does not change.

Reducing a tariff ________ the domestic production of the good and ________ the total domestic consumption of the good. A)increases;increases B)increases;decreases C)decreases;increases D)decreases;decreases E)does not change;increases

Increasing a tariff ________ the domestic quantity consumed of the good and ________ the domestic production of the good. A)increases;increases B)increases;decreases C)decreases;increases D)decreases;decreases E)decreases;does not change

Tariffs A)generate revenue for consumers. B)generate revenue for the government. C)encourage domestic consumers to buy more imports. D)encourage domestic producers to produce less. E)lower prices for consumers.

Canada imports cars from Japan.If Canada imposes a tariff on cars imported from Japan,Canadian A)consumers will lose and Japanese producers will gain. B)tariff revenue will equal the loss of Canadian consumer surplus. C)consumers will lose and Canadian producers will gain. D)car manufacturers will gain revenue equal to the revenue lost by Japanese car manufacturers. E)producers will lose and Japanese consumers will gain.

A Canadian tariff imposed on items that can be produced more cheaply abroad A)benefits Canadians by making these goods cheaper. B)makes the goods more expensive in foreign markets. C)creates a deadweight loss. D)equalizes the cost of production between Canada and foreign producers. E)increases total surplus.

A tariff is imposed on a good.This ________ the quantity supplied and ________ the quantity demanded in the importing country. A)increases;decreases B)increases;does not change C)increases;increases D)decreases;decreases E)decreases;increases

A tariff is imposed on a good.This ________ producer surplus and ________ total surplus in importing country. A)increases;does not change B)increases;increases C)decreases;increases D)decreases;decreases E)increases;decreases

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.With the tariff,Canadians buy ________ million shirts per year. A)48 B)32 C)16 D)24 E)40

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.With the tariff,Canada imports ________ million shirts per year. A)24 B)8 C)32 D)16 E)40

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.The tariff ________ Canada's imports of shirts by ________ million shirts per year. A)decreases;16 B)decreases;8 C)increases;8 D)increases;4 E)increases;16

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.The tariff ________ the domestic production of shirts in Canada by ________ per year. A)increases;8 million B)decreases;16 million C)increases;4 million D)decreases;8 million E)increases;24 million

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.The Canadian government's revenue from the tariff is ________. A)$64 million B)$32 million C)$128 million D)$48 million E)$480 million

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.Canadian consumers' ________ from the tariff is ________. A)loss;$176 million B)gain;$64 million C)loss;$80 million D)gain;$128 million E)gain;$176 million

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.Canadian producers' ________ from the tariff is ________. A)loss;$32 million B)loss;$64 million C)gain;$80 million D)gain;$128 million E)gain;$64 million

Refer to the figure below to answer the following questions. Figure 7.3.1 The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt. -Refer to Figure 7.3.1.The deadweight loss from the tariff is A)$80 million. B)$16 million. C)zero. D)$64 million. E)$32 million.

Of the following,in which decade were Canada's tariffs at their lowest level? A)2000s B)1970s C)1950s D)1930s E)1890s

An import quota is A)a tariff that is a fixed percentage of the price of a good. B)a tariff that is a fixed dollar amount per unit of a good. C)an agreed upon price for a good to be imported at a specified future date. D)a restriction that specifies the maximum quantity of a good that may be imported in a given time period. E)the same as an export subsidy.

________ specifies the maximum quantity of a good that may be imported in a given period of time. A)An import restriction B)A legislative restriction C)A trade restriction D)An import quota E)An import subsidy

Import quotas A)are the same as tariffs. B)are not used by Canada. C)set the minimum percentage of the value of a product that must consist of imported components. D)benefit society. E)set the maximum number of units of a good that can be imported in a given time period.

An import quota is a A)tariff imposed on goods that are dumped in the country. B)law that prevents ecologically damaging goods from being imported into a country. C)market-imposed balancing factor that keeps prices of imports and exports in equilibrium. D)restriction on the quantity of a specific good that can be imported. E)tax in an international market.

An import quota directly restricts ________ and are designed to protect domestic ________. A)exports;consumers only B)exports;producers only C)imports;consumers only D)imports;producers only E)imports;producers and consumers

Import quotas ________ the price of imported goods and ________ the quantity consumed in the country imposing the quota. A)raise;increase B)raise;decrease C)lower;increase D)lower;decrease E)raise;do not change

If a government imposes a quota on imports of a popular doll,the price of the doll in the importing country ________ and the quantity purchased in the importing country ________. A)rises;increases B)rises;decreases C)falls;increases D)falls;decreases E)rises;does not change

A key difference between tariffs and import quotas is that A)consumers are hurt with import quotas but not with tariffs. B)consumers are hurt with tariffs but not with import quotas. C)the government receives revenue with a tariff,but the importer makes a profit with an import quota. D)the government receives revenue with an import quota,but the importer makes a profit with a tariff. E)producer surplus increases with a tariff and decreases with an import quota.

Import quotas and tariffs both A)decrease deadweight loss. B)cause a loss of revenue to domestic producers. C)lower prices on imported goods. D)decrease producer surplus. E)restrict foreign trade.

A difference between a quota and a tariff is that A)a tariff generates a higher price than does an import quota. B)a tariff generates a greater reduction in exports than does an import quota. C)an import quota increases profits of domestic producers more than a tariff. D)the government collects revenue from a tariff but does not collect revenue from an import quota. E)an import quota generates a deadweight loss and a tariff does not.

A tariff ________ consumer surplus and an import quota ________ consumer surplus. A)decreases;decreases B)increases;increases C)decreases;increases D)increases;decreases E)does not change;does not change

A tariff ________ the domestic price of the good and an import quota ________ the domestic price of the good. A)lowers;lowers B)lowers;raises C)raises;lowers D)raises;raises E)does not change;does not change

A tariff ________ a deadweight loss and an import quota ________ a deadweight loss. A)creates;creates B)does not create;creates C)creates;does not create D)does not create;does not create E)sometimes creates;always creates

Refer to the table below to answer the following questions. Table 7.3.1 Canada's Market for Widgets -Table 7.3.1 shows the Canadian supply of and demand for widgets.Widgets are available on the world market for $7.If the Canadian government imposes a tariff of $1,the domestic selling price will be ________ and quantity bought in Canada will be ________. A)$6;48 million B)$7;44 million C)$8;16 million D)$8;24 million E)$8;40 million

Refer to the table below to answer the following questions. Table 7.3.1 Canada's Market for Widgets -Table 7.3.1 shows the Canadian supply of and demand for widgets.Widgets are available on the world market for $7.If the Canadian government imposes a tariff of $1,how many widgets will Canada import? A)32 million B)24 million C)16 million D)28 million E)40 million

Refer to the table below to answer the following questions. Table 7.3.1 Canada's Market for Widgets -Table 7.3.1 shows the Canadian supply of and demand for widgets.Widgets are available on the world market for $7.Canadian widget producers convince the government to protect the domestic industry from cheap imports.If the Canadian government sets an import quota of 8 million widgets,the resulting price of a widget in Canada will be ________,and domestic production will be ________. A)$6;40 million B)$7;36 million C)$8;32 million D)$9;28 million E)$10;32 million

A tariff on watches which are imported by Atlantis ________ the price of watches in Atlantis and ________. A)lowers;imports of watches increase B)raises;watch production in Atlantis increases C)raises;watch production in Atlantis decreases D)lowers;watch production in Atlantis increases E)lowers;watch production in Atlantis decreases

The introduction of a tariff ________ consumer surplus and ________ total surplus. A)increases;decreases B)increases;increases C)decreases;does not change D)decreases;decreases E)decreases;increases

Refer to the figure below to answer the following question. Figure 7.3.2 -Refer to Figure 7.3.2.The supply of peanuts in Canada is made up of Canadian grown peanuts and imported peanuts.Initially,Canada engages in free trade in the peanut market.Then Canada puts a quota on peanut imports.The graph shows the Canadian market for peanuts when the Canadian government puts a quota on peanut imports.The Canadian consumer surplus that is redistributed to Canadian producers is ________ and the quota creates a deadweight loss equal to ________. A)area B + C + D + E;zero B)area B + C + F;area D C)area B;area D + E D)area B;area C + E E)area B + C + D;area E + F

Among the following,the domestic government gains the most revenue when it A)imposes an import quota. B)eliminates an import quota. C)encourages freer trade. D)imposes a tariff. E)increases the demand for a domestically-produced good.

If a quota is set at the same quantity of imports that results from a tariff, A)the deadweight loss from the tariff is greater than the deadweight loss from the import quota. B)the deadweight loss from the tariff equals the deadweight loss from the import quota. C)the deadweight loss from the import quota is greater than the deadweight loss from the tariff. D)the government tariff revenue is greater than the importers' profit from the import quota. E)the government tariff revenue is less than the importers' profit from the import quota.

Use the information below to answer the following questions. Fact 7.3.1 Before 1995,trade between Canada and Mexico was subject to tariffs.In 1995,Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed. -Refer to Fact 7.3.1.With the removal of the tariffs,the quantity of Canadian imports from Mexico ________,and the quantity of Canadian exports to Mexico ________. A)increases;decreases B)decreases;decreases C)decreases;increases D)increases;does not change E)increases;increases

Use the information below to answer the following questions. Fact 7.3.1 Before 1995,trade between Canada and Mexico was subject to tariffs.In 1995,Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed. -Refer to Fact 7.3.1.When Canadian tariffs are removed from a good,Canadian consumers of the good ________,and Canadian producers of the good ________. A)gain;lose B)gain;gain C)lose;gain D)lose;lose E)and the Canadian government gain;lose

Use the information below to answer the following questions. Fact 7.3.1 Before 1995,trade between Canada and Mexico was subject to tariffs.In 1995,Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed. -Refer to Fact 7.3.1.The quantity of Canadian exports to Mexico has ________,and the Canadian government's tariff revenue from trade with Mexico has ________. A)not changed;not changed B)decreased;increased C)increased;increased D)increased;decreased E)increased;not changed

Use the information below to answer the following questions. Fact 7.3.2 With free trade between Australia and Canada,Australia would export beef to Canada.But Canada imposes an import quota on Australian beef. -Refer to Fact 7.3.2.If Canada imposes an import quota on Australian beef,the price that Canadian consumers pay for beef will ________ and the quantity of beef produced in Canada will ________. A)not change;decrease B)not change;increase C)rise;not change D)rise;increase E)fall;decrease

Use the information below to answer the following questions. Fact 7.3.2 With free trade between Australia and Canada,Australia would export beef to Canada.But Canada imposes an import quota on Australian beef. -Refer to Fact 7.3.2.Canadian gains from trade will ________ and Australian gains from trade will ________. A)increase;decrease B)decrease;decrease C)decrease;increase D)increase;increase E)not change;not change

Economists usually agree with which of the following arguments that favour protectionism? A)the competition with cheap foreign labour defence B)the job protection defence C)the dumping defence D)the infant-industry defence E)none of the above.Economists generally agree that arguments in favour of protection are flawed.

Which of the following are valid reasons advanced by almost all economists? Protection A)saves jobs. B)prevents rich countries from exploiting developing countries. C)is a good way for governments in developed nations to raise revenue. D)penalizes lax environmental standards. E)Economists would not support any of the above reasons.

Which of the following are reasons economists consider valid for trade protection? I.Protection penalizes countries that have weak environmental standards. II.Protection limits dumping of low-wage jobs into the domestic economy. III.Protection prevents low-wage jobs in foreign countries from lowering wages in Canada. A)I and II B)II and III C)I,II,and III D)I and III E)None of the above

The proposition that protection is necessary to allow an infant industry to grow into a mature industry so that it can compete in world markets is the A)infant-maturity argument. B)infant-industry argument. C)new industry proposition. D)growth proposition. E)dynamic comparative advantage argument.

Dumping occurs when a foreign firm A)pollutes international waters. B)disposes of waste material internationally. C)sells inferior output to foreigners. D)sells its exports at a lower price than its cost of production. E)sells its output at a lower price in a foreign country than in the country where it produces the good.

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars.Pacifica could be accused of A)avoiding import quotas. B)exploiting its absolute advantage. C)dumping. D)engaging in learning-by-doing. E)exploiting its comparative advantage.

When a firms "dumps" some of its output in another country,it A)creates an environmental hazard in the receiving country. B)sells its output abroad at a price lower than it costs to produce the output. C)increases the total level of employment in the importing country. D)is specializing according to comparative advantage. E)creates for itself an absolute advantage.

In the exporting industries of poorer countries,free trade ________ the demand for labour in these industries and ________ the wages paid in these industries. A)decreases;lowers B)decreases;raises C)increases;lowers D)increases;raises E)increases the supply and decreases;lowers

Which of the following statements is true? A)International trade raises wages in developing countries. B)International trade with rich industrial countries forces people in the developing countries to work for lower wages. C)International trade leads to job losses in both import competing industries and exporting industries. D)Unlike other types of international trade,offshore outsourcing does not bring any gains from trade. E)International trade encourages lax environmental standards.

The argument that protection A)penalizes poor environmental standards is true. B)allows us to compete with cheap foreign wages is true. C)is necessary for infant industries is true. D)saves jobs is flawed. E)prevents rich countries from exploiting poor countries is true.

Which of the following is an explanation for the existence of trade restrictions? A)tariffs generate revenue for the government B)rent seeking C)inefficient quotas D)both A and B E)both A and C

In industrial countries,there is more reliance on ________ as opposed to ________ for government revenue. A)tariffs;tax collection B)import quotas;tariffs C)tariffs;import quotas D)import quotas;tax collection E)tax collection;tariffs

In developing countries,there is more reliance on ________ as opposed to ________ for government revenue. A)tariffs;tax collection B)import quotas;tariffs C)tax collection;tariffs D)tariffs;import quotas E)import quotas;tax collection

Of the groups listed below,which is most likely to lobby for protection? A)workers in the import industry B)workers in the export industry C)consumers in the import industry D)producers in the export industry E)workers and consumers in the import industry

Rent seeking is one reason why countries choose to A)export and import the same goods. B)work for freer trade. C)follow the theory of comparative advantage. D)hire foreign labour. E)restrict trade.

When considering rent seeking,which of the following is TRUE? A)The anti-free trade group generally will lobby more than the pro-free trade group. B)The pro-free trade group generally will lobby more than the anti-free trade group. C)Usually only the anti-free trade group is concerned about what is best for society at large. D)Only the pro-free trade group is concerned about the government's revenue from tariffs. E)Rent seeking is the primary reason why consumers gain from free trade.

One reason that international trade is restricted is that A)the individual gain to parties who benefit from the protection will be much larger than the individual loss to parties who lose. B)the government completely pays the losers from international trade for their losses. C)protectionism benefits consumers. D)the government cannot measure the cost of protectionism. E)tariff revenue raises more income than income taxes in industrial countries.

Usually the removal of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________. A)a few;little B)a few;lot C)many;little D)many;lot E)We can't determine the relative benefits from the removal of trade barriers.

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically,each of whom gains a ________. A)a few;little B)a few;lot C)many;little D)many;lot E)We can't determine the relative benefits from the imposition of trade barriers.

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed on a ________ number of people. A)small;large B)large;small C)small;small D)large;large E)We can't determine the relative number of people who benefit and lose from free trade.

The effects of offshore outsourcing from opening up call centres in India are similar to the effects from A)free trade. B)tariffs. C)import quota. D)voluntary export restraints. E)export subsidies.

Offshore outsourcing occurs when a firm in Canada A)moves its corporate headquarters to another country. B)buys finished goods,components,or services from other firms in other countries. C)buys finished goods,components,or services from other firms in Canada. D)hires Canadian labour and produces in Canada. E)hires foreign workers who work in Canada.

When a Canadian firm implements offshore outsourcing,consumers in Canada ________,and workers in Canada in the industry that is being outsourced ________. A)gain;neither gain nor lose B)lose;lose C)lose;gain D)gain;lose E)gain;gain

The infant industry argument is based on the idea of A)global comparative advantage. B)global absolute advantage. C)tariff maximization. D)learning-by-doing. E)tariff minimization.

Choose the statement that is incorrect. A)Free trade destroys some jobs. B)Imports create jobs for retailers that sell imported goods and for firms that service those goods. C)Imports create income in the rest of the world,some of which is spent on Canadian-made goods and services. D)Free trade brings about a global rationalization of labour. E)Protection saves jobs at a low cost.

Choose the statement that is incorrect. A)Wage differences drive international trade. B)High-wage workers have high productivity. C)International trade can improve the opportunities of people in developing countries and increase their incomes. D)By trading with poor countries,we increase the demand for the goods that these countries produce and increase the demand for their labour. E)Free trade creates some jobs and destroys other jobs.

Choose the statement that is incorrect. A)Gains from trade do not bring gains for every single person. B)Canadians,on average,gain from offshore outsourcing. C)The losers from offshore outsourcing are those who have invested in the human capital to do a specific job that has now gone offshore. D)The costs from offshore outsourcing outweigh the gains. E)Offshore outsourcing brings gains from trade identical to those of any other type of trade.