1. Assume that the state of Missouri decided to place a tariff on every product
ID: 1099446 • Letter: 1
Question
1. Assume that the state of Missouri decided to place a tariff on every product produced outside the state in an effort to increase the state's revenue and increase employment in the state. If Missouri did so,
A. the prices of goods imported into Missouri would fall.
B. the state's total output would definitely increase.
C. workers with jobs in new firms replacing out-of-state imports would earn high income.
D. the standard of living within Missouri would decrease.
E. other states would begin to dump in Missouri.
2. Most t-shirts bought by Americans are made in Asia. U.S. consumers of t-shirts buy these t-shirts because
A. they must buy some goods or services produced in Asia.
B. they pay a lower price for t-shirts made in Asia than they would for similar shirts made in the United States.
C. they pay a higher price for t-shirts made in Asia than they would for similar shirts made in the United States.
D. by so doing they are helping preserve U.S. jobs producing t-shirts.
E. they know that the United States has a comparative advantage in wearing t-shirts.
3. One of the major reasons why the United States exports jet airplanes is because Boeing faces ________ opportunity cost compared with firms in other nations in the production of such aircraft.
A. a nonexistent
B. a lower
C. a higher
D. an identical
E. an unrelated
4. International trade is definitely in the social interest if
A. total surplus increases.
B. producer surplus increases.
C. consumer surplus increases.
D. consumer surplus does not decreases.
5. The benefit that Joan gets from eating cherries is an example of
A. the marginal social cost of eating cherries.
B. when the external benefit equals the private benefit.
C. an external cost.
D. an external benefit.
E. a private benefit.
6. The U.S. oil industry has only a few firms in it, so an economist is likely to describe the industry as
A. an oligopoly.
B. a monopoly.
C. perfectly competitive.
D. monopolistically competitive.
E. Both answers C and D can be correct.
7. If the United States imposes a tariff on foreign chocolate, how are U.S. buyers of chocolate affected?
A. Their demand for chocolate increases because the U.S. production chocolate increases.
B. The price they pay for chocolate falls but they consume less chocolate because less is imported.
C. The price they pay for chocolate rises.
D. The quantity they consume is unchanged.
8. If the United States exports planes to Brazil and imports ethanol from Brazil, the price received by U.S. producers of planes ________ and the price received by Brazilian producers of ethanol ________.
A. does not change; does not change
B. falls; falls
C. rises; rises
D. falls; rises
E. rises; falls
Explanation / Answer
1. C. workers with jobs in new firms replacing out-of-state imports would earn high income.
2. B. they pay a lower price for t-shirts made in Asia than they would for similar shirts made in the United States.
3. B. a lower
4. A. total surplus increases.
5. E. a private benefit
6. A. an oligopoly.
7. C. The price they pay for chocolate rises.
8. C. rises; rises
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