Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
41
Copyright © 2011 Pearson Education, Inc.
16) Imposing a tariff on a good leads to a ________ in the price of the product and ________ in
imports.
A) rise; an increase
B) rise; a decrease
C) fall; an increase
D) fall; a decrease
E) rise; no change
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: WM
AACSB: Reflective thinking
17) As a result of U.S. tariffs on fishnets produced in other nations, the quantity of fishnets
purchased in the United States has
A) not been affected.
B) increased.
C) decreased but not to zero.
D) fallen to zero.
E) probably changed but whether it has increased or decreased is ambiguous.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: JC
AACSB: Reflective thinking
18) If the United States imposes a tariff on foreign chocolate, how are U.S. buyers of chocolate
affected?
A) The price they pay for chocolate rises.
B) Their demand for chocolate increases because the U.S. production chocolate increases.
C) The quantity they consume is unchanged.
D) The price they pay for chocolate falls but they consume less chocolate because less is
imported.
E) The price they pay for chocolate falls and they consume more chocolate.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: TPS
AACSB: Reflective thinking
42
Copyright © 2011 Pearson Education, Inc.
19) If the United States imposes a tariff on a good, then
A) domestic consumption of the good decreases.
B) foreign consumption of the good decreases.
C) foreign production of the good increases.
D) domestic production of the good decreases.
E) the government makes less revenue than it would have gained if it imposed a quota.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: NAU
AACSB: Reflective thinking
20) When the United States imposes a tariff on an imported good, the
A) price of the good in the United States falls.
B) quantity of the good purchased in the United States decreases.
C) quantity of the good produced in the United States decreases.
D) outcome becomes more efficient.
E) amount imported increases.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: SB
AACSB: Reflective thinking
21) U.S. tariffs on Canadian lumber have led to ________ production of lumber within the
United States.
A) no change in
B) an increase in
C) the elimination of
D) a decrease in
E) making illegal the
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: JC
AACSB: Reflective thinking
43
Copyright © 2011 Pearson Education, Inc.
22) If the government decides to impose a new tariff on orange juice from Brazil, the tariff
would lead to ________ the tariff revenue collected by the U.S. government.
A) no change in
B) an increase in
C) a decrease in
D) an elimination of
E) making illegal
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: JC
AACSB: Reflective thinking
23) The imposition of a tariff will typically ________ government revenue and ________
domestic production of the good.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) increase; not change
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: WM
AACSB: Reflective thinking
24) Country A imports 1,000 cars per month. After imposing a $50 per car tariff, imports fall to
800 cars per month. How much does Country A's government collect in tariff revenue?
A) $90,000
B) $50,000
C) $40,000
D) $10,000
E) $60,000
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: SB
AACSB: Analytical reasoning
44
Copyright © 2011 Pearson Education, Inc.
25) Of the following, which group is hurt by a tariff?
A) domestic producers of the good
B) foreign consumers of the good
C) domestic consumers of the good
D) domestic government
E) foreign government
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: NAU
AACSB: Reflective thinking
26) Of the following, who is harmed by a tariff?
A) domestic buyers of the good or service
B) the overall domestic economy
C) the foreign exporter of the good or service
D) domestic producers of the good or service
E) Both answers A and B are correct.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: TS
AACSB: Reflective thinking
27) If a tariff is imposed on imports of shrimp into the United States, U.S. consumer surplus
from shrimp will ________ and U.S. producer surplus from shrimp will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) increase; not change
Skill: Level 4: Applying models
Section: Checkpoint 9.3
Author: MR
AACSB: Analytical reasoning
45
Copyright © 2011 Pearson Education, Inc.
28) If a tariff is imposed on imports of shrimp into the United States, U.S. consumer surplus
from shrimp will ________ and U.S. total surplus from shrimp will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) increase; not change
Skill: Level 4: Applying models
Section: Checkpoint 9.3
Author: MR
AACSB: Analytical reasoning
29) If a tariff is imposed on imports of shrimp into the United States, U.S. producer surplus from
shrimp will ________ and U.S. total surplus from shrimp will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) increase; not change
Skill: Level 4: Applying models
Section: Checkpoint 9.3
Author: MR
AACSB: Analytical reasoning
30) A tariff makes the total economy
A) better off because it increases the domestic production of the good.
B) better off because it decreases the deadweight loss from international trade.
C) worse off because it creates a deadweight loss.
D) worse off because it creates revenue for the government.
E) worse off because it decreases both domestic consumer surplus and domestic producer
surplus.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: MR
AACSB: Reflective thinking
46
Copyright © 2011 Pearson Education, Inc.
31) Of the following, who gains because of tariffs and why?
A) domestic producers of protected goods because they can sell at a higher price
B) domestic buyers because they can be sure of buying high-quality products
C) foreign producers because they earn more total revenue
D) foreign government because they gain more revenue
E) domestic buyers because they pay a lower price
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: TS
AACSB: Reflective thinking
32) If the United States imposes a tariff on foreign chocolate, how are foreign producers of
chocolate affected?
A) Their supply increases because they have to pay the tariff.
B) They export less to the United States.
C) They earn more profit because their chocolate sells for a higher price.
D) Their supply is unaffected because the quota must be met by U.S. producers.
E) The tariff has no effect on foreign producers because U.S. consumers must pay the higher
price.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: TPS
AACSB: Reflective thinking
33) If the United States imposes a tariff on foreign chocolate, how are U.S. producers of
chocolate affected?
A) The quantity of chocolate they sell decreases because U.S. consumption of chocolate
decreases.
B) The quantity of chocolate they produce increases.
C) The price at which they sell their chocolate falls.
D) They are harmed because foreign exporters of chocolate increase their supply in response to
the higher price.
E) They are unaffected because the quota applies to foreign producers, not to U.S. producers.
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: TPS
AACSB: Reflective thinking
47
Copyright © 2011 Pearson Education, Inc.
34) The above figure shows the U.S. market for replacement cell phone batteries. When there is
no international trade, the equilibrium price is ________ per battery and when there is
international trade the equilibrium price is ________ per battery.
A) $16; $14
B) $14; $12
C) $12; $14
D) $12; $16
E) $16; $12
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
35) The above figure shows the U.S. market for replacement cell phone batteries. With free
international trade, the United States
A) exports 300,000 batteries.
B) imports 400,000 batteries.
C) imports 500,000 batteries.
D) imports 800,000 batteries.
E) exports 700,000 batteries.
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
48
Copyright © 2011 Pearson Education, Inc.
36) The above figure shows the U.S. market for replacement cell phone batteries. Suppose the
U.S. government imposes the tariff illustrated in the figure. The tariff is equal to ________ and
the price U.S. consumers pay ________ compared to the price paid when there was free trade.
A) $2; decreases
B) $14; decreases
C) $2; increases
D) $12; increases
E) $14; increases
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
37) The above figure shows the U.S. market for replacement cell phone batteries. With free
trade, the United States imports ________ batteries and once the tariff illustrated in the figure is
imposed, the United States imports ________ batteries.
A) 900,000; 700,000
B) 800,000; 400,000
C) 300,000; 100,000
D) 700,000; 300,000
E) 900,000; 100,000
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
38) The above figure shows the U.S. market for replacement cell phone batteries. With free
trade, U.S. production is equal to ________ batteries per year. When a $2 tariff is in place, U.S.
production is equal to ________ batteries per year.
A) 100,000; 300,000
B) 100,000; 500,000
C) 300,000; 100,000
D) 300,000; 500,000
E) 900,000; 700,000
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
49
Copyright © 2011 Pearson Education, Inc.
39) The above figure shows the U.S. market for replacement cell phone batteries. The U.S.
government collects tariff revenue of ________ on each battery imported.
A) $4
B) $14
C) $12
D) $6
E) $2
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
40) The above figure shows the U.S. market for replacement cell phone batteries. Area C is the
A) deadweight loss from tariff.
B) decrease in consumer surplus due to the tariff.
C) increase in producer surplus due to the tariff.
D) tariff revenue.
E) loss in total surplus because of the tariff.
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
41) The above figure shows the U.S. market for replacement cell phone batteries. Area B + area
D is the
A) tariff revenue.
B) decrease in consumer surplus due to the tariff.
C) deadweight loss from tariff.
D) increase in producer surplus due to the tariff.
E) gain in total surplus due to the tariff.
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
50
Copyright © 2011 Pearson Education, Inc.
42) The above figure shows the U.S. market for replacement cell phone batteries. Area A + area
E is the
A) consumer surplus when there is a tariff.
B) producer surplus when there is a tariff.
C) tariff revenue.
D) increase in producer surplus due to the tariff.
E) gain in total surplus due to the tariff.
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
43) The above figure shows the U.S. market for replacement cell phone batteries. Area E is the
A) producer surplus when there is free trade.
B) deadweight loss from tariff.
C) tariff revenue.
D) increase in producer surplus due to the tariff.
E) gain in total surplus due to the tariff.
Skill: Level 3: Using models
Section: Checkpoint 9.3
Author: KG
AACSB: Analytical reasoning
44) Of the following, who gains with a tariff?
A) domestic buyers of the good or service
B) the importer of the good or service
C) the foreign exporter of the good or service
D) the government of the importing nation
E) the government of the exporting nation
Skill: Level 2: Using definitions
Section: Checkpoint 9.3
Author: TS
AACSB: Analytical reasoning
