Question 1

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.The increase in domestic producer surplus as a result of the tariff is equal to the area

Accepted Answer

The increase in domestic producer surplus due to the tariff is represented by area C, which is the area between the domestic supply curve and the world price line, up to the quantity produced domestically after the tariff is imposed.

Question 2

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.Without the tariff in place,the United States consumes

Accepted Answer

The answer of Figure 19-2
  Suppose the U.S. government...

Question 3

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.With the tariff in place,the United States produces

Accepted Answer

The correct answer is 15 million pounds of rice. With the tariff in place, the domestic production increases to the point where the domestic supply curve intersects the world price plus tariff line, which is at 15 million pounds.

Question 4

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.With the tariff in place,the United States consumes

Accepted Answer

With the tariff imposed, the price of rice in the United States increases from $0.60 to $1.00 per pound. This creates a new domestic supply curve (S+T) that is $0.40 higher than the original supply curve (S). As a result, the quantity supplied domestically increases from 9 million to 31 million pounds. At the same time, the quantity demanded decreases from 42 million to 31 million pounds due to the higher price. Therefore, the United States consumes 31 million pounds of rice with the tariff in place.

Question 5

Which of the following is the best example of a quota?

Accepted Answer

A quota is a limit on the quantity of goods that can be imported from a foreign country. Option B is the only one that fits this definition. A subsidy (option A) is a form of financial aid given to businesses or industries to help them compete with foreign producers, but it is not a quota. A fee on imported products (option C) is a tariff, not a quota. A tax on all tires sold (option D) is not a quota either, as it does not limit the quantity of imported tires.

Question 6

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.Without the tariff in place,the United States produces

Accepted Answer

Without the tariff, the United States produces 9 million pounds of rice, as indicated by the production level before the tariff is applied in the figure.

Question 7

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

Accepted Answer

The answer of An agreement negotiated by two countries that...

Question 8

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.If the tariff was replaced by a quota which limited rice imports to 16 million pounds,the amount of additional revenue received by rice importers would equal

Accepted Answer

The answer of Figure 19-2
  Suppose the U.S. government...

Question 9

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.With the tariff in place,the United States

Accepted Answer

With the tariff in place, the price of imported rice in the United States is higher than the world price. This makes it more expensive for US consumers to buy imported rice, so they will demand less of it. As a result, the United States will import less rice.

Question 10

A tariff

Accepted Answer

A tariff is a tax on imported goods, which raises the price of the foreign goods and makes them less attractive to domestic consumers compared to the cheaper domestic goods. This can lead to a decrease in demand for the imported goods, which hurts the suppliers of those goods (foreign producers). However, it can also lead to a decrease in competition, which allows domestic producers to raise their prices, making domestic consumers worse off as they have to pay higher prices. Therefore, A (makes domestic consumers worse off) is the best choice.

Question 11

The main purpose of most tariffs and quotas is to

Accepted Answer

Tariffs and quotas are typically imposed to protect domestic industries by reducing foreign competition. By increasing the cost of imported goods, tariffs make domestic goods more competitive. Quotas, which limit the amount of foreign goods that can be imported, also reduce foreign competition and protect domestic industries. These trade barriers aim to shield domestic industries from foreign competition, giving them a competitive advantage in the market, ultimately reducing the foreign competition that domestic firms face.

Question 12

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

Accepted Answer

Voluntary export restraints refer to an agreement between the exporting and importing countries where the foreign producers limit their exports to a specific country. This is done to avoid the imposition of other types of trade barriers such as tariffs or quotas. It is a way to manage trade relations between countries while limiting negative economic impacts on either side.

Question 13

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.The loss in domestic consumer surplus as a result of the tariff is equal to the area

Accepted Answer

The loss in domestic consumer surplus as a result of the tariff is equal to the area C + D + E + F. This is because the tariff raises the price of rice in the domestic market, reducing the quantity demanded and causing a reduction in consumer surplus. The area B represents government revenue from the tariff, not a loss in domestic consumer surplus.

Question 14

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.The tariff causes domestic consumption of rice

Accepted Answer

The tariff causes the domestic price of rice to rise to P+T. As the price of rice increases, the quantity demanded decreases and the quantity supplied increases. The decrease in quantity demanded is greater than the increase in quantity supplied, resulting in a decrease in domestic consumption of rice by 11 million pounds.

Question 15

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.In the market for steel,the "Buy American" provision would ________ the price of steel in the United States and ________ the quantity of steel demanded in the United States.

Accepted Answer

The "Buy American" provision would increase the price of steel in the United States because it limits the supply of steel available for purchase to U.S.-made goods, meaning there is less competition and potential for lower prices from foreign imports. This would decrease the quantity of steel demanded in the United States because higher prices would cause consumers and businesses to either reduce their consumption of steel or seek out cheaper alternatives.

Question 16

Which of the following is the best example of a voluntary export restraint?

Accepted Answer

A voluntary export restraint is when a country voluntarily restricts its exports to another country. In this scenario, the Korean government is voluntarily limiting the number of cell phones that the United States can import from Korea. A and D are not examples of voluntary export restraints, as they involve restrictions or fees imposed by the importing country, rather than the exporting country. B is not an example of a voluntary export restraint, as it involves a subsidy granted by the U.S. government to domestic producers, rather than a restriction on exports by a foreign government.

Question 17

Which of the following is the best example of a quota?

Accepted Answer

A quota is a limit on the quantity of a certain product that can be imported or exported. In this case, the limit is imposed on the number of sport utility vehicles that can be imported from Japan.

Question 18

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.The tariff revenue collected by the government equals the area

Accepted Answer

The tariff revenue collected by the government equals the amount of tariff times the quantity of imports, which is represented by the rectangular area of E in the figure. Therefore, the correct answer is B.

Question 19

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.As a result of the tariff,domestic producers increase their quantity supplied by

Accepted Answer

The answer of Figure 19-2
  Suppose the U.S. government...

Question 20

A quota

Accepted Answer

A quota restricts the supply of foreign goods, which leads to a decrease in competition for domestic producers. As a result, they can charge higher prices and enjoy higher profits. However, this comes at the expense of domestic consumers who have to pay higher prices for the same goods. Therefore, a quota makes domestic producers better off but everyone else, including domestic consumers, worse off.

Quiz 19: Comparative Advantage, International Trade, and Exchange Rates

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.The increase in domestic producer surplus as a result of the tariff is equal to the area

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.Without the tariff in place,the United States consumes

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.With the tariff in place,the United States produces

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.With the tariff in place,the United States consumes

Which of the following is the best example of a quota?

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.Without the tariff in place,the United States produces

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.With the tariff in place,the United States

A tariff

The main purpose of most tariffs and quotas is to

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.The loss in domestic consumer surplus as a result of the tariff is equal to the area

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.The tariff causes domestic consumption of rice

Which of the following is the best example of a voluntary export restraint?

Which of the following is the best example of a quota?

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.The tariff revenue collected by the government equals the area

Figure 19-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.As a result of the tariff,domestic producers increase their quantity supplied by

A quota