Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
14) The price that U.S. consumers pay for goods imported from Mexico has fallen and the
quantity of U.S. imports from Mexico has ________. Because of these changes, the winners
are U.S. ________ of goods imported from Mexico and the losers are U.S. ________ of goods
imported from Mexico.
A) increased; consumers; producers
B) increased; producers; consumers
C) increased; producers; producers
D) decreased; consumers; producers
E) decreased; producers; consumers
Skill: Level 5: Critical thinking
Section: Integrative
Status: New
AACSB: Analytical thinking
15) When an import quota is imposed on tomatoes, the price of tomatoes ________ and the
quantity bought ________, so domestic consumers ________.
A) falls; increases; lose
B) rises; decreases; lose
C) rises; increases; lose
D) rises; decreases; gain
E) falls; decreases; lose
Skill: Level 5: Critical thinking
Section: Integrative
Status: New
AACSB: Analytical thinking
16) If Indonesia imposes an import tarif on Hollywood movies, the tarif ________ the price
of seeing a movie in Indonesia, the production of movies in Indonesia ________, and imports
of Hollywood movies into Indonesia ________.
A) lowers; increases; falls
B) lowers; decreases; falls
C) raises; increases; falls
D) raises; decreases, falls
E) raises; increases; increases
Skill: Level 4: Applying models
Section: Integrative
Status: New
AACSB: Analytical thinking
71
18.6 Essay: How Global Markets Work
1) How can a nation and its producers determine whether or not it has a comparative
advantage in producing a particular good or service?
Skill: Level 2: Using deinitions
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
2) 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?
Skill: Level 2: Using deinitions
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
3) 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?
Skill: Level 5: Critical thinking
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
4) 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
72
$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?
Skill: Level 3: Using models
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
73
5) 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?
Skill: Level 3: Using models
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
6) 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?
Skill: Level 3: Using models
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
74
7) The igure 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?
Skill: Level 3: Using models
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
75
8) Who gains from imports? How do they gain? Who loses? How do they lose? Does the
overall economy gain or lose from imports?
Skill: Level 2: Using deinitions
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
9) Who gains from exports? How do they gain? Who loses? How do they lose? Does the
overall economy gain or lose from exports?
Skill: Level 2: Using deinitions
Section: Checkpoint 18.1
Status: Old
AACSB: Analytical thinking
18.7 Essay: International Trade Restrictions
1) Briely deine a tarif and a quota. Do any of these methods restrict trade without
harming domestic consumers?
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
2) "Tarifs today in the United States are much higher than in the past." Is the previous
statement correct or incorrect?
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
3) How does a tarif afect the domestic price of the import, the domestic consumption, the
domestic production, and the quantity imported?
