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ECON 1050 Chapter 7: Economics-1 (1) (dragged) 4

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salmoneagle674
17 Sep 2016
School
University of Guelph
Department
Economics
Course
ECON 1050
Professor
Eveline Adomait

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Document Summary

An import quota is a restriction that limits the maximum quantity of a good that may be imported in a given period. For example, canada imposes import quota on food products such as meat, eggs, and dairy products and manufactures such as steel. The figure shows the market before the government imposes an import quota on t-shirts. The world price is and canada imports 4 million t-shirts a year. The second figure shows the market with an import quota of 1 million t-shirts. With the quota, the supply of t-shirts in canada becomes s + quota. The quantity produced in canada increases and the quantity bought decreases. Winners, losers, and social loss from an import quota. When the canadian government imposes an import tariff on imported t-shirts: canadian consumers of t-shirts lose, canadian producers of t-shirts gain. 3: society loses: a deadweight loss arises. The first figure shows the total surplus with free international trade.

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Related Questions

Question 1

  1. In 2003, the ________ ruled that U.S. tariffs on steel imported from the EU were unfair and allowed the EU to issue retaliatory tariffs on U.S. products.
    Ā  Ā 
    World Trade Organization
    Ā  Ā 
    United Nations
    Ā  Ā 
    European Central Bank
    Ā  Ā 
    International Human Rights Commission

Question 2

  1. The idea of the U.S.-Canadian Free-Trade Agreement that ________ barriers to trade including tariffs and quotas between the United States and Canada by 1998 was to increase the amount that the United States exports to Canada and the amount that the United States imports from Canada.
    Ā  Ā 
    increased all
    Ā  Ā 
    removed some
    Ā  Ā 
    removed all
    Ā  Ā 
    increased some

Question 3

  1. According to the theory of comparative advantage, a country should specialize and ________ goods with ________ opportunity cost.
    Ā  Ā 
    import; the lowest
    Ā  Ā 
    import; negative
    Ā  Ā 
    export; the lowest
    Ā  Ā 
    export; the highest

Question 4

  1. A quota is a restriction on imports.
    True
    False

    Question 5

    1. If Holland decreases subsidies to its tulip growers, the price of tulips in the United States will rise.
      True
      False

    Question 6

    1. According to comparative advantage, trade between two countries allows ________ of the trading countries to use its resources most efficiently.
      Ā  Ā 
      only the smaller
      Ā  Ā 
      only the larger
      Ā  Ā 
      neither
      Ā  Ā 
      each

    Question 7

    1. ________ U.S. president(s) who has/have held office since GATT was signed has argued for free-trade policies, yet each one has used his powers to protect various sectors of the economy.
      Ā  Ā 
      Only one
      Ā  Ā 
      No
      Ā  Ā 
      Every
      Ā  Ā 
      Only 3

    Question 8

    1. In 1991, the European Union began the process of forming the
      Ā  Ā 
      largest free-trade zone in the world.
      Ā  Ā 
      only continental military force in the world.
      Ā  Ā 
      first international trade agreement in the world.
      Ā  Ā 
      first unified currency in the world.

      1. Question 9

        1. The Smoot-Hawley tariff set off an international trade war in the
          Ā  Ā 
          1930s.
          Ā  Ā 
          1950s.
          Ā  Ā 
          1970s.
          Ā  Ā 
          1990s.



          Please help me with these questions Thank you.

Refer to the figure below to answer the following questions. Price Idollars per shirt 57616 700 0 8 16 24 32 40 48 56 64 Quantity Imillions of shirts per year) The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt Canada imposes a tariff on imported shirts of S4 per shirt. Figure 5 Canada's imports of shirts by million shirts per 26) Refer to Figure 5. the tariff year A) increases: 8 decreases: 16 C) increases: 4 D) decreases: 8 E) increases: 16

Question 1 If it was impossible to have a comparative advantage, there would be no gains from trade. True False 4 points

Question 2 If the price of Good X is $10 and price of Good Y is $15, the slope of the budget constraint is 1.5. True False 4 points

Question 3 If the demand and supply curves have equal slopes in absolute value, the burden of a commodity tax will be split equally regardless of on whom the tax is placed. True False 4 points

Question 4 Suppose that supply is fixed at 100 units and demand is Q = 500 P. A price ceiling of $100 creates a shortage of 400 units. True False 4 points

Question 5 Housing shortages caused by rent controls are larger in the long run because the supply of housing is more elastic in the long run. True False 4 points

Question 6 Firms should exit the industry if average costs are greater than marginal costs. True False 4 points

Question 7 If a 3.67 percent increase in price causes a 1.97 percent decrease in quantity demanded, then total revenue must fall following an increase in price. True False 4 points

Question 8 Which of the following choices best illustrates the concept of Adam Smith's invisible hand ? A Vietnamese farmer grows rice; an exporter ships it to the United States, and a grocer in New York sells it to a customer. A fishery's stock of fish becomes depleted due to overfishing as boats from around the world converge. A government regulates a firm to clean up the pollutants it has released as part of its production process. An apartment building is built, which provides much needed housing, on the site of the only playground for children in that town. 4 points

Question 9 Figure: Labor Supply and Welfare Refer to the figure. The budget constraint is: ABC. BD. ABDC. ABD. 4 points Question 10 The price of coffee has increased, yet evidence suggests the demand for coffee has been stable. A possible explanation is that: there has been no change in the supply of coffee. there has been increased use of subsidies in coffee production. wages of workers in coffee production might have decreased. wages of workers in coffee production might have increased. 4 points Question 11 Which of the following statements is TRUE regarding profit maximization in competitive markets? I. When all firms pursue profits, none of them achieve profits. II. When all firms pursue profits, only the most innovative will achieve profits. III. Production is divided in such a way that total costs of production are minimized. I only II only I and III only II and III only 4 points Question 12 Suppose France can produce four phones or three computers with one unit of labor, and Sweden can produce one phone or two computers with one unit of labor. If France can trade only with Sweden, then the theory of comparative advantage suggests that: France should specialize in producing phones and import computers from Sweden. France should specialize in producing computers and import phones from Sweden. France should produce both phones and computers, and import nothing from Sweden. France should import both phones and computers from Sweden. 4 points Question 13 Potato chips and popcorn are substitutes. A subsidy for potato chips will ______the demand for popcorn and the quantity of popcorn sold will ______. (Table: Barrels of Oil) Refer to the table. What is the total amount of producer surplus (per barrel of oil) earned by all four producers if the market price per barrel of oil is $51? Table: Barrels of Oil Minimum willingness to sell Country a single barrel of oil Country A $32.00 Country B 16.00 Country C 17.25 Country D 56.99 increase; increase increase; decrease decrease; decrease decrease; increase 4 points Question 14 In the market for Good X a necessity good without any good substitutes the workers and capital in the industry can easily find work producing other goods. The burden of the tax is likely to fall: more heavily on buyers, given that demand is more inelastic than supply. evenly between buyers and sellers. more heavily on sellers, given that supply is more inelastic than demand. more heavily on buyers, given that demand is more elastic than supply. 4 points Question 15 A U.S. manufacturer arranges to purchase parts from a German supplier for 500,000 euros in six months. The U.S. manufacturer is concerned that the dollar will depreciate against the euro, meaning the dollar cost of the 500,000 euros will rise. What should the U.S. manufacturer do? lobby the Fed to lower interest rates on six-month T-bills buy a futures contract that fixes the dollar cost of 500,000 euros in six months buy an exchange rate contract that pegs the interest rate to the discount rate on interbank loans sell a naked option to cover the output spread 4 points Question 16 Which of the following scenarios would cause a speculator to buy low and sell high ? Farmers expect to have a bumper harvest of corn next year. Imports of corn begin to flood the country. The government is expected to pass legislation making it mandatory for all vehicles to use corn-based fuels within one year. The government is expected to subsidize corn production for farmers. 4 points Question 17 In a market with a price ceiling which of the following is TRUE? Buyers and sellers experience unexploited gains from trade. Resources are allocated to their most efficient uses. The supply of goods is sold by the sellers with the lowest costs. The supply of goods is bought by the buyers with the highest willingness to pay. 4 points Question 18 Consider the following statements: I. Relative to a no-trade situation, if the United States exported wheat, the U.S. domestic wheat price would rise and domestic production of wheat would expand. II. Relative to a no-trade situation, international trade causes prices of all goods to rise. I is true; II is false. I is false; II is true. Both I and II are true. Both I and II are false. 4 points Question 19 As the price of a good fluctuates, a profit-maximizing firm will expand or contract production along its: average cost curve. average product curve. marginal cost curve. marginal product curve. 4 points Question 20 An increase in demand and a decrease in supply occur in a market. What happens to the equilibrium price and quantity? The equilibrium price decreases; the change in the equilibrium quantity is ambiguous. The equilibrium price decreases; the equilibrium quantity increases. The equilibrium price increases; the change in the equilibrium quantity is ambiguous. The equilibrium price increases; the equilibrium quantity decreases.