Question 1

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would domestic consumers purchase?
A)10 million
B)28 million
C)34 million
D)40 million

Accepted Answer

The point where the world price intersects with the domestic supply and demand curves shows the quantity of peanuts that would be consumed in the absence of a quota. At the world price, domestic consumers would demand 40 million pounds of peanuts.

Question 2

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.What is the area of consumer surplus after the imposition of the quota?
A)A + G + H
B)G + H + E + I+ J + M
C)G + H
D)A

Accepted Answer

The answer of  Since 1953 the United States has...

Question 3

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.Without the quota,the domestic price of peanuts equals the world price which is $2.00 per pound.What is the quantity of peanuts demanded by domestic consumers in the absence of a quota?
A)10 million pounds
B)28 million pounds
C)30 million pounds
D)40 million pounds

Accepted Answer

The answer of  Since 1953 the United States has...

Question 4

Which of the following is the best example of a quota?
A)a limit imposed on the number of sport utility vehicles that the United States can import from Japan
B)a subsidy granted by the U.S.government to domestic sport utility vehicle manufacturers so they can compete more effectively with foreign sport utility vehicle manufacturers
C)a tax placed on all sport utility vehicles sold in the domestic market
D)a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States

Accepted Answer

A quota is a limit on the quantity of a particular good that can be imported into a country. In this case, the limit on the number of sport utility vehicles that the United States can import from Japan is an example of a quota.

Question 5

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.With a quota in place,what is the quantity consumed in the domestic market?
A)10 million pounds
B)28 million pounds
C)34 million pounds
D)40 million pounds

Accepted Answer

The answer of  Since 1953 the United States has...

Question 6

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.What is the area that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?
A)I + J
B)E + I + J + M
C)I + J + K+ L
D)G + H + I + J

Accepted Answer

The area that represents revenue to foreign producers who are granted permission to sell in the U.S. market when there is a quota is represented by the rectangle IJKL, which includes the quota rent (I+J) and the additional revenue earned from selling the remaining quota (K+L). Therefore, the best choice is C, which includes I+J+K+L.

Question 7

Which of the following is the best example of a voluntary export restraint?
A)a limit imposed by the U.S.government on the number of cell phones that the United States can import from Korea
B)a subsidy granted by the U.S.government to domestic cell phone manufacturers so they can compete more effectively with foreign cell phone manufacturers
C)a limit set by the Korean government on the number of cell phones that the United States can import from Korea.
D)a $50 per-cell phone fee imposed on all cell phones imported into the United States

Accepted Answer

A voluntary export restraint (VER) is a trade restriction voluntarily imposed by a country on its own exports. In this case, the Korean government is limiting the number of cell phones it exports to the United States. Option A is a limit imposed by the U.S. government, not a voluntary restraint by Korea. Option B is a subsidy, not a restraint. Option D is a tariff or tax, not a VER.

Question 8

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
A)agree to meet specific quality standards required by the importing country.
B)limit their exports to a country.
C)pay a tax on all products they export.
D)must agree to import an equal quantity of products that they export.

Accepted Answer

Voluntary export restraints involve foreign producers voluntarily limiting their exports to a particular country, usually in order to avoid more restrictive trade barriers being imposed by the importing country. This is not about quality standards, taxes, or import requirements, so options A, C, and D are incorrect.

Question 9

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would be imported?
A)16 million
B)28 million
C)30 million
D)40 million

Accepted Answer

The answer of  Since 1953 the United States has...

Question 10

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would domestic producers supply?
A)10 million
B)28 million
C)30 million
D)40 million

Accepted Answer

The answer of  Since 1953 the United States has...

Question 11

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would be imported?
A)16 million
B)24 million
C)30 million
D)40 million

Accepted Answer

Without the quota, the supply curve would shift to the right until it intersected with the demand curve at point E, which represents a quantity of 30 million pounds of peanuts imported.

Question 12

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.What is the area that represents the deadweight loss as a result of the quota?
A)G + H
B)G + H + I + J
C)E + I + J + M
D)E + M

Accepted Answer

The answer of  Since 1953 the United States has...

Question 13

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.
A)increase;increase
B)increase;decrease
C)decrease;increase
D)decrease;decrease

Accepted Answer

The "Buy American" provision would increase the price of steel in the United States because it limits the supply of steel available to be purchased with stimulus money, resulting in a higher demand for domestically produced steel. However, this provision would decrease the quantity of steel demanded in the United States because it would make imported steel more expensive and less attractive to consumers. Therefore, there would be a decrease in the quantity demanded of steel in the domestic market.

Question 14

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.Without the quota,the domestic price of peanuts equals the world price which is $2.00 per pound.What is the quantity of peanuts supplied by domestic producers in the absence of a quota?
A)10 million pounds
B)28 million pounds
C)30 million pounds
D)40 million pounds

Accepted Answer

The answer of  Since 1953 the United States has...

Question 15

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.With a quota in place,what is the quantity supplied by domestic producers?
A)8 million pounds
B)10 million pounds
C)16 million pounds
D)18 million pounds

Accepted Answer

With the quota in place, domestic producers are able to supply 18 million pounds of peanuts, which is the level at which the domestic price is equal to the world price plus the tariff.

Question 16

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.What is the area of domestic producer surplus after the imposition of a quota?
A)B
B)B + C
C)B + E + I + J + M
D)E + I + J + M

Accepted Answer

After the imposition of the quota, the domestic producer surplus is the area B. This is because the quota reduces the amount of imports, causing the domestic price to increase. As a result, domestic producers benefit from a higher price, represented by the increase in producer surplus in area B. The other areas (C, E, I, J, M) represent the loss of consumer surplus and deadweight loss.

Question 17

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
A)a non-tariff trade barrier.
B)an export quota.
C)an import quota.
D)a voluntary export restraint.

Accepted Answer

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

Question 18

The main purpose of most tariffs and quotas is to
A)raise revenue for the government.
B)reduce the prices consumers pay for goods and services.
C)reduce the foreign competition that domestic firms face.
D)improve the quality of goods and services imported into the country.

Accepted Answer

Tariffs and quotas are designed to protect domestic industries from competition with foreign competitors, thereby reducing the amount of foreign goods that enter the market. This reduces the competition that domestic firms face, allowing them to charge higher prices and increase their profits. The main objective is to safeguard domestic industries and jobs, rather than to raise revenue or reduce prices for consumers.

Question 19

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.What is the area of domestic producer surplus without a quota?
A)C
B)C + B
C)A + B + C
D)A + B + C + D

Accepted Answer

The answer of  Since 1953 the United States has...

Question 20

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 U.S.steel market,the "Buy American" provision in the 2009 stimulus package would
A)convert some consumer surplus to deadweight loss.
B)transfer some deadweight loss to producer surplus.
C)transfer some producer surplus to consumer surplus.
D)reduce the producer surplus received by foreign manufacturers.

Accepted Answer

The answer of The "Buy American" provision in the 2009...

Quiz 9: Comparative Advantage and the Gains From International Trade

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would domestic consumers purchase?

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area of consumer surplus after the imposition of the quota?

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

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.With a quota in place,what is the quantity consumed in the domestic market?

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area that represents revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

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

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

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would be imported?

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would domestic producers supply?

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.If there was no quota,how many pounds of peanuts would be imported?

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area that represents the deadweight loss as a result of the quota?

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.With a quota in place,what is the quantity supplied by domestic producers?

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area of domestic producer surplus after the imposition of a quota?

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

The main purpose of most tariffs and quotas is to

Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area of domestic producer surplus without a quota?

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 U.S.steel market,the "Buy American" provision in the 2009 stimulus package would