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Use the following diagram to answer Questions 1 through 5. <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0072877375/230957/chap14mc_quest1.jpg','popWin', 'width=349,height=336,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (15.0K)</a>]]>
The autarky (pre-trade) price of this good is ____________. |
| | A) | $5 |
| | B) | $10 |
| | C) | $15 |
| | D) | not able to be determined without additional information |
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2 | |
If this country imposes an export tax of $5 and the price falls from $25 to $20, exports fall to __________. |
| | A) | 20 |
| | B) | 40 |
| | C) | 60 |
| | D) | 80 |
| | E) | 100 |
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3 | |
When a $5 export tax is imposed, government revenue |
| | A) | increases by $100. |
| | B) | increases by $200. |
| | C) | increases by $400. |
| | D) | does not change. |
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4 | |
When a $5 export tax is imposed, producer surplus |
| | A) | rises by $300. |
| | B) | rises by $450. |
| | C) | falls by $300. |
| | D) | falls by $450. |
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5 | |
When a $5 export tax is imposed, deadweight loss equals |
| | A) | $0; there is no deadweight loss. |
| | B) | $50. |
| | C) | $100. |
| | D) | $200. |
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6 | |
In the small-country case, an import quota leads to |
| | A) | an increase in producer surplus. |
| | B) | a decrease in producer surplus. |
| | C) | an increase in consumer surplus. |
| | D) | both b and c. |
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7 | |
Tariffs may lead to an increase in a country's total surplus |
| | A) | in either the small country or the large country cases. |
| | B) | in the large country case, but not in the small country case. |
| | C) | in the small country case, but not in the large country case. |
| | D) | never. |
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8 | |
If a country causes one of its trading partners to voluntarily limit its exports, that country will see |
| | A) | a deterioration of its terms of trade and a decrease in the volume of trade. |
| | B) | a deterioration of its terms of trade and an increase in the volume of trade. |
| | C) | an improvement in its terms of trade and a decrease in the volume of trade. |
| | D) | an improvement in its terms of trade and an increase in the volume of trade. |
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9 | |
Which of the following trade policies will lead to an improvement of a country's terms of trade and a decrease in trade volume? |
| | A) | tariffs |
| | B) | import quotas |
| | C) | voluntary export restraints |
| | D) | all of the above |
| | E) | a and b |
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10 | |
In general, export subsidies tend to __________ consumer surplus and __________ producer surplus. |
| | A) | increase; increase |
| | B) | decrease; increase |
| | C) | increase; decrease |
| | D) | decrease; decrease. |
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