Question 1

How do imports affect sellers' producer surplus?

Accepted Answer

The answer of How do imports affect sellers' producer surplus?...

Question 2

-The table above has the domestic supply and domestic demand schedules for a product.What is the equilibrium price with no trade? Over what range of prices will the country export the good? Over what range will it import the good? Suppose the world price is $20.What is the quantity demanded,the quantity supplied,and the amount of the good exported or imported?

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-The table above has the domestic supply...

Question 3

After NAFTA was signed,the United States allowed more tomatoes to be imported from Mexico.What happened to the price of tomatoes in the United States when the United States allowed more tomatoes to be imported?

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Question 4

"Tariffs today in the United States are much higher than in the past." Is the previous statement correct or incorrect?

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Question 5

Which of the following is true?
i.Comparative advantage drives international trade.
ii.Compared to a no-trade situation,in a market with imports,producer surplus is larger.
iii.Tariffs lower the domestic price of imported goods.

Accepted Answer

Comparative advantage is a key driver of international trade as it allows countries to specialize in producing goods where they have a lower opportunity cost. In a market with imports, producer surplus is typically smaller, not larger, compared to a no-trade situation. Tariffs generally increase the domestic price of imported goods, not lower it.

Question 6

How do imports affect buyers' consumer surplus?

Accepted Answer

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Question 7

In 2002,President Bush imposed a tariff on imported steel.He did so in response to rent seeking by

Accepted Answer

President Bush imposed a tariff on imported steel in response to rent seeking by the domestic steel producers. The domestic steel producers were asking for protection from cheaper imported steel, which was hurting their profits. The tariff was meant to protect the domestic steel industry and to give them a chance to compete with foreign steel producers.

Question 8

Which of the following is true?
i.When the world price of a good is lower than the price that balances domestic supply and demand,a country gains from exporting the good.
ii.Compared to a no-trade situation,in a market with imports,consumer surplus is larger.
iii.Quotas raise the domestic price of imported goods.

Accepted Answer

When imports are allowed, consumer surplus increases because consumers can buy goods at a lower world price. Quotas restrict the quantity of imports, leading to higher domestic prices for those goods.

Question 9

-Merck,an American pharmaceutical company,produces a vaccination that is used against chicken pox.The table shows the domestic demand for,and supply of,this medication,measured in thousands of doses per day.The world price of this medicine is $24 per dose.
a.With no trade,what is the U.S.price and quantity of the vaccine?
b.At the world price,how many doses are demanded in the United States?
c.At the world price,how many doses are produced in the United States?
d.At the world price,how many doses are exported?

Accepted Answer

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-Merck,an American pharmaceutical company,produces a vaccination that...

Question 10

A few years ago,as oil and gas prices continued to increase,a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil.Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

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Question 11

How do exports affect buyers' consumer surplus?

Accepted Answer

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Question 12

How does a tariff affect the domestic price of the import,the domestic consumption,the domestic production,and the quantity imported?

Accepted Answer

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Question 13

How do exports affect sellers' producer surplus?

Accepted Answer

The answer of How do exports affect sellers' producer surplus?...

Question 14

Which of the following is true?
i.Compared to a no-trade situation,in a market with exports,consumer surplus is larger.
ii.Tariffs decrease consumer surplus.
iii.Trade is restricted because protection brings small losses to a large number of people and large gains to a small number of people.

Accepted Answer

Tariffs decrease consumer surplus by raising prices. Trade restrictions often occur because they benefit a small group significantly, while the costs are spread across a larger group.

Question 15

How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service?

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Question 16

Who gains from imports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from imports?

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Question 17

-The figure above shows the U.S.demand and the U.S.supply curves of canned peaches.
a.In the absence of trade,what is price of canned peaches in the United States?
b.In the absence of trade,what is the level of production in the United States?
c.If the world price of canned peaches is $1 a can and the United States engages in trade,does the United States import or export canned peaches?
d.If the world price of canned peaches is $1 a can and the United States engages in trade,what is the quantity produced in the United States and what is the quantity consumed? What is the quantity imported or exported?
e.If the world price of canned peaches is $2 a can and the United States engages in trade,does the United States import or export canned peaches?
f.If the world price of canned peaches is $2 a can and the United States engages in trade,what is the quantity produced in the United States and what is the quantity consumed? What is the quantity imported or exported?

Accepted Answer

The answer of 
-The figure above shows the U.S.demand and...

Question 18

Who gains from exports? How do they gain? Who loses? How do they lose? Does the overall economy gain or lose from exports?

Accepted Answer

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Question 19

Briefly define a tariff and a quota.Do any of these methods restrict trade without harming domestic consumers?

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Question 20

-The United States imports television sets from Japan.The table above contains the U.S.demand and U.S.supply schedules for television sets.The world price of a television set is $600 per set.
a.With no trade,what is the domestic price and quantity of television sets?
b.At the world price,what is the quantity of sets demanded in the United States?
c.At the world price,how many sets are produced in the United States?
d.At the world price,how many sets are imported into the United States?
e.What is the opportunity cost of producing the 4-millionth television set in the United States? In Japan?

Accepted Answer

The answer of 
-The United States imports television sets from...

Quiz 9: Global Markets in Action