Question 1

Figure: The Home Monopolist's Market  (Figure: The Home Monopolist's Market) The graph shows a home
Monopolist market with the imposition of a tariff.The deadweight loss
Due to the tariff is:

Accepted Answer

The deadweight loss caused by the tariff is the area of the triangle between the original supply curve, the new supply curve after the tariff, and the demand curve. Calculating the area of the triangle, the deadweight loss is $2,450, which is the answer choice C.

Question 2

Figure: Supply and Demand at Home  (Figure: Supply and Demand at Home) With a quota of 200 units,
What would be the total quantity available to consumers in a home
Monopoly situation?

Accepted Answer

The answer of Figure: Supply and Demand at Home ...

Question 3

How does the demand curve facing a home monopolist compare in a
No­trade situation to a situation in which a quota protects the
Monopolist's output?

Accepted Answer

When there is no trade, the demand curve facing the home monopolist shows the maximum price that the buyers are willing to pay for a given quantity of the monopolist's product. However, when a quota is imposed, the monopolist faces a smaller market size and therefore a lower demand for its product. As a result, the quota-protected demand curve lies to the left of the no-trade demand curve. Thus, choice C is the correct answer.

Question 4

When a country imposes a tariff to protect a domestic monopolist from
International competition, it will produce _______ output and charge
_______ in a perfectly competitive domestic industry.

Accepted Answer

The answer of When a country imposes a tariff to...

Question 5

With a home monopolist, the imposition of a tariff results in:

Accepted Answer

The answer of With a home monopolist, the imposition of...

Question 6

For a home monopolist, a quota allows the firm to charge
_______________ the tariff.

Accepted Answer

With a quota, the home monopolist limits the amount of imports that can come into the country, creating a shortage in the domestic market. This allows the firm to charge a higher price than the international (tariff) price because consumers have no other choice but to purchase from the domestic monopolist.

Question 7

Figure: The Home Monopolist's Market  (Figure: The Home Monopolist's Market) The graph shows a home
Monopolist market with the imposition of a tariff.After the imposition
Of the tariff, the home monopolist saw an increase in production of
______ and the producer surplus increased by ________.

Accepted Answer

The answer of Figure: The Home Monopolist's Market  (Figure:...

Question 8

(Figure: Supply and Demand at Home) With a quota of 200 units,
What would be the price in a home monopoly situation?

Accepted Answer

The answer of  (Figure: Supply and Demand at Home)...

Question 9

The WTO has encouraged nations to replace their import quotas with
Tariffs.Why?

Accepted Answer

The answer of The WTO has encouraged nations to replace...

Question 10

(Figure: Supply and Demand at Home) In the situation illustrated by
The figure, the monopoly firm's quantity produced after a quota is
Imposed ________, thus leading to a worse situation for the
Employees of the firm compared with a free­trade situation.

Accepted Answer

When a quota is imposed, the monopoly firm's quantity produced decreases as it is now restricted to a certain amount. This leads to a worse situation for the employees as there may be layoffs or reduced wages due to the decrease in production. In a free-trade situation, the firm may have produced more, leading to more employment opportunities and potentially higher wages.

Question 11

(Figure: Supply and Demand at Home) How many units will be
Imported after the quota is imposed?

Accepted Answer

The answer of  (Figure: Supply and Demand at Home)...

Question 12

When the monopoly firm is able to charge a higher price, the amount
Of ________ also increases, thus magnifying the importing nation's
__________.

Accepted Answer

The correct answer is A because when a monopoly firm is able to charge a higher price, the amount of quota rents also increases, thus magnifying the importing nation's losses.

Question 13

When the home country is small, how will an increase in a tariff
Protecting a home monopolist affect the home country's demand
Curve?

Accepted Answer

When the home country is small, an increase in a tariff protecting a home monopolist will lead to an upward parallel shift in the demand curve. This is because the tariff will make the imported good more expensive, which will increase the demand for the domestically produced good.

Question 14

Figure: Supply and Demand at Home  (Figure: Supply and Demand at Home) With a quota of 200 units,
What would be the price if the home market were competitive?

Accepted Answer

With a quota of 200 units, the quantity demanded in the home market would exceed the quantity supplied, leading to an increase in the price of the product. The equilibrium price before the quota was imposed was $20. Between the two prices following the quota, the price in a competitive market would be $23, where the demand curve intersects the supply curve at a quantity of 200. Therefore, the best choice is B.

Question 15

Comparing a tariff levied on an import where the home firm is a
Monopoly to a situation where the home firms are competitive, we
Find:

Accepted Answer

The answer of Comparing a tariff levied on an import...

Question 16

(Figure: The Home Monopolist's Market) The graph shows a home
Monopolist market with the imposition of a tariff.Because of the tariff,
The home government collects ______ in tariff revenue.

Accepted Answer

The tariff revenue is calculated by the area of the shaded rectangle, which is (140 - 100) x 40 = $1,600 per unit. With 2 units being sold, the total tariff revenue collected by the home government is $1,600 x 2 = $3,200. Therefore, the correct answer is option B.

Question 17

(Figure: Supply and Demand at Home) Suppose the world price is
$18, which line in the graph describes the "new" demand curve for the
Monopolist after a quota is imposed?

Accepted Answer

When a quota is imposed, the monopolist can only sell a limited amount of goods in the domestic market. This reduces the quantity demanded at any given price, shifting the demand curve leftward. Hence, line B accurately describes the new demand curve for the monopolist after the quota is imposed.

Question 18

What will happen to profits and domestic prices when a quota is used
To protect a domestic monopolist from international competition?

Accepted Answer

When a quota is used to protect a domestic monopolist, it limits foreign competition, allowing the monopolist to increase prices due to reduced supply, leading to higher profits and higher domestic prices.

Question 19

How do the deadweight losses of a tariff differ when the domestic
Industry is perfectly competitive from when it is a monopoly?

Accepted Answer

The answer of How do the deadweight losses of a...

Question 20

Figure: Supply and Demand at Home  (Figure: Supply and Demand at Home) Which line describes the new
MR curve after the quota is imposed?

Accepted Answer

The new MR curve will be the horizontal line at the price equal to the quota rent (PQ) because the domestic producer can sell all the output produced at the quota price due to the restriction on imports. The equilibrium quantity will decrease to Q2, and the domestic producer surplus will increase to the shaded area A + B + C + D. Therefore, the best choice is to impose the quota if the goal is to protect domestic producers from import competition. However, this policy will generate deadweight loss (area E) because it prevents mutually beneficial trades between domestic consumers and foreign producers at the lower world price.

Quiz 9: International Agreements: Trade, Labor, and the Environment

Figure: The Home Monopolist's Market (Figure: The Home Monopolist's Market) The graph shows a home Monopolist market with the imposition of a tariff.The deadweight loss Due to the tariff is:

Figure: Supply and Demand at Home (Figure: Supply and Demand at Home) With a quota of 200 units, What would be the total quantity available to consumers in a home Monopoly situation?

How does the demand curve facing a home monopolist compare in a Notrade situation to a situation in which a quota protects the Monopolist's output?

When a country imposes a tariff to protect a domestic monopolist from International competition, it will produce _ output and charge _ in a perfectly competitive domestic industry.

With a home monopolist, the imposition of a tariff results in:

For a home monopolist, a quota allows the firm to charge _______________ the tariff.

Figure: The Home Monopolist's Market (Figure: The Home Monopolist's Market) The graph shows a home Monopolist market with the imposition of a tariff.After the imposition Of the tariff, the home monopolist saw an increase in production of and the producer surplus increased by __.

(Figure: Supply and Demand at Home) With a quota of 200 units, What would be the price in a home monopoly situation?

The WTO has encouraged nations to replace their import quotas with Tariffs.Why?

(Figure: Supply and Demand at Home) In the situation illustrated by The figure, the monopoly firm's quantity produced after a quota is Imposed ________, thus leading to a worse situation for the Employees of the firm compared with a freetrade situation.

(Figure: Supply and Demand at Home) How many units will be Imported after the quota is imposed?

When the monopoly firm is able to charge a higher price, the amount Of also increases, thus magnifying the importing nation's __.

When the home country is small, how will an increase in a tariff Protecting a home monopolist affect the home country's demand Curve?

Figure: Supply and Demand at Home (Figure: Supply and Demand at Home) With a quota of 200 units, What would be the price if the home market were competitive?

Comparing a tariff levied on an import where the home firm is a Monopoly to a situation where the home firms are competitive, we Find:

(Figure: The Home Monopolist's Market) The graph shows a home Monopolist market with the imposition of a tariff.Because of the tariff, The home government collects ______ in tariff revenue.

(Figure: Supply and Demand at Home) Suppose the world price is $18, which line in the graph describes the "new" demand curve for the Monopolist after a quota is imposed?

What will happen to profits and domestic prices when a quota is used To protect a domestic monopolist from international competition?

How do the deadweight losses of a tariff differ when the domestic Industry is perfectly competitive from when it is a monopoly?

Figure: Supply and Demand at Home (Figure: Supply and Demand at Home) Which line describes the new MR curve after the quota is imposed?

Quiz 9: International Agreements: Trade, Labor, and the Environment

Figure: The Home Monopolist's Market (Figure: The Home Monopolist's Market) The graph shows a home Monopolist market with the imposition of a tariff.The deadweight loss Due to the tariff is:

Figure: Supply and Demand at Home (Figure: Supply and Demand at Home) With a quota of 200 units, What would be the total quantity available to consumers in a home Monopoly situation?

How does the demand curve facing a home monopolist compare in a No­trade situation to a situation in which a quota protects the Monopolist's output?

When a country imposes a tariff to protect a domestic monopolist from International competition, it will produce _______ output and charge _______ in a perfectly competitive domestic industry.

With a home monopolist, the imposition of a tariff results in:

For a home monopolist, a quota allows the firm to charge _______________ the tariff.

Figure: The Home Monopolist's Market (Figure: The Home Monopolist's Market) The graph shows a home Monopolist market with the imposition of a tariff.After the imposition Of the tariff, the home monopolist saw an increase in production of ______ and the producer surplus increased by ________.

(Figure: Supply and Demand at Home) With a quota of 200 units, What would be the price in a home monopoly situation?

The WTO has encouraged nations to replace their import quotas with Tariffs.Why?

(Figure: Supply and Demand at Home) In the situation illustrated by The figure, the monopoly firm's quantity produced after a quota is Imposed ________, thus leading to a worse situation for the Employees of the firm compared with a free­trade situation.

(Figure: Supply and Demand at Home) How many units will be Imported after the quota is imposed?

When the monopoly firm is able to charge a higher price, the amount Of ________ also increases, thus magnifying the importing nation's __________.

When the home country is small, how will an increase in a tariff Protecting a home monopolist affect the home country's demand Curve?

Figure: Supply and Demand at Home (Figure: Supply and Demand at Home) With a quota of 200 units, What would be the price if the home market were competitive?

Comparing a tariff levied on an import where the home firm is a Monopoly to a situation where the home firms are competitive, we Find:

(Figure: The Home Monopolist's Market) The graph shows a home Monopolist market with the imposition of a tariff.Because of the tariff, The home government collects ______ in tariff revenue.

(Figure: Supply and Demand at Home) Suppose the world price is $18, which line in the graph describes the "new" demand curve for the Monopolist after a quota is imposed?

What will happen to profits and domestic prices when a quota is used To protect a domestic monopolist from international competition?

How do the deadweight losses of a tariff differ when the domestic Industry is perfectly competitive from when it is a monopoly?

Figure: Supply and Demand at Home (Figure: Supply and Demand at Home) Which line describes the new MR curve after the quota is imposed?

How does the demand curve facing a home monopolist compare in a Notrade situation to a situation in which a quota protects the Monopolist's output?

When a country imposes a tariff to protect a domestic monopolist from International competition, it will produce _ output and charge _ in a perfectly competitive domestic industry.

Figure: The Home Monopolist's Market (Figure: The Home Monopolist's Market) The graph shows a home Monopolist market with the imposition of a tariff.After the imposition Of the tariff, the home monopolist saw an increase in production of and the producer surplus increased by __.

(Figure: Supply and Demand at Home) In the situation illustrated by The figure, the monopoly firm's quantity produced after a quota is Imposed ________, thus leading to a worse situation for the Employees of the firm compared with a freetrade situation.

When the monopoly firm is able to charge a higher price, the amount Of also increases, thus magnifying the importing nation's __.