2.) In graph A, the large country s equilibrium price after the quota is a. P 1 b. P 2 * c. P 3 d. P 4

Transcription

1 AGEC 5343 Dr. Shida Henneberry Midterm II November 5, ) In graph A, the import quota amount is represented by a. The distance between Q 1 and Q 3 b. The distance between Q 1 and Q 2* c. The distance between Q 2 and Q 3 d. None of the above 2.) In graph A, the large country s equilibrium price after the quota is a. P 1 b. P 2 * c. P 3 d. P 4 3.) In graph A, the government revenue is Page 1 of 14

2 a. v + z* b. x + y c. z d. u + v 4.) In graph A, the net social welfare is a. u b. z + v c. u + v x y d. z x y * 5.) In graph A, the county s self sufficiency price is a. P 1 * b. P 2 c. P 3 d. P 4 6.) The importing country s policy in Graph A will have what net welfare effect on the exporting country? a. No Change b. Net Gain c. Net Loss* d. Five dollars Page 2 of 14

3 7.) Considering that P1 is the free-trade domestic price, and P2 is the domestic (local) price after the import policy, Graph B represents: a. An import tariff by a large country b. An import subsidy by a small country* c. An import tariff by a small country d. An import subsidy by a large country 8.) The importing country s policy in Graph B will have what net welfare effect on exporting countries? a. No Change* b. Net Gain c. Net Loss d. Five dollars 9.) The change in producer s surplus for the country in Graph B is a. n + o b. m c. m + n d. m n* 10.) The world price in Graph B is Page 3 of 14

4 a. P 1 * b. P 2 c. P 3 d. Five dollars 11.) In graph B, the quantity produced by domestic producers after government intervention is a. Q 1 b. Q 2 * c. Q 3 d. Q 4 12.) In graph B, the quantity demanded before government intervention is a. Q 1 b. Q 2 c. Q 3 * d. Q 4 13.) In Graph C, if P 2 is the equilibrium price before government intervention (free-trade price) and P3 is the domestic (local) price after government intervention, P 1 is a. The world price prior to government intervention b. The self sufficiency price c. The domestic price after government intervention d. The world price after government intervention* 14.) In Graph C, if P 2 is the equilibrium price before government intervention, P 3 is Page 4 of 14

5 a. The world price prior to government intervention b. The self sufficiency price c. The domestic price after government intervention* d. The world price after government intervention 15.) What type of policy does Graph C represent? a. Import quota by a large country b. Import subsidy by a large country* c. Import quota by a small country d. Import subsidy by a small country 16.) What effect will the policy in Graph C have on consumers in the world market? a. No effect b. Five dollars c. Consumers will have a net gain in welfare d. Consumers will have a net loss in welfare* 17.) What effect will the policy in Graph C have on producers in the world market? a. No effect b. Can t determine the effect with the given information c. Producers will have a net gain in welfare* d. Producers will have a net loss in welfare 18.) The quantity demanded after government intervention in Graph C is a. Q 1 b. Q 2 c. Q 3 * d. Q 4 Page 5 of 14

6 19.) Graph D represents a. Global impacts of an import subsidy by a large country* b. Impacts on an exporter by a large country s import quota c. Global impacts of an import subsidy by a small country d. All of the above 20.) In Graph D, a shift from ED1 to ED2 causes the demand to a. Become more elastic* b. Become more inelastic (less elastic) c. Remain unchanged d. None of the above 21.) Price P s in Graph D is derived from a. The price paid by consumers in the importing country b. The price after government intervention in the importing country c. The price paid by consumers in the exporting country d. None of the above* Page 6 of 14

7 22.) Considering that P3 is the free-trade domestic (local) price and P2 is the after-trade domestic price, Graph E represents a. An import tariff by a large country b. An import subsidy by a small country c. An import tariff by a small country* d. An import subsidy by a large country 23.) The pre-trade price in Graph E is a. P 1 * b. P 2 c. P 3 d. It is not shown 24.) The change in producer surplus after the policy is implemented in Graph E is a. u b. z* c. y + x + w d. z 25.) The change in consumer surplus after the policy is implemented in Graph E is a. z - y x w* b. z Page 7 of 14

8 c. y + x + w d. z 26.) In graph E, the post trade equilibrium quantity will move from a. Q 2 to Q 1 b. Q 1 to Q 2 c. Q 2 to Q 1 d. Both a and c* 27.) How will the government s actions for the country represented in Graph E affect the world market? a. It will increase the price b. It will decrease the price c. It will not influence the world market* d. None of the above 28.) What treat did Barbara Charlet bring for the class during her guest lecture a. Cookies b. Brownies c. Pecan Pie* d. She did not guest lecture 29.) Graph F represents a. An import tax by a large country Page 8 of 14

9 b. An import subsidy by a large country c. An import quota by a small country d. An import quota by a large country* 30.) Which market does graph F represent? a. The world market* b. The importing country s market c. The exporting country s market d. What s a market? 31.) The thick red line marked by X in Graph F is a. The excess demand by the exporting country b. The excess demand after the importing county s policy is implemented* c. The excess demand before the importing country s policy is implemented d. The excess supply by the exporting country 32.) The world price in Graph F after the importing country implements its policy is a. P 1 b. P 2* c. P 3 d. P 4 Page 9 of 14

10 33.) The world price under free trade in Graph F is a. P 1* b. P 2 c. P 3 d. P 4 34.) Based on Graph G, which of the following statements is most likely true? a. ED1 is less elastic than ED2 b. ES is perfectly inelastic c. ED is perfectly elastic d. ES is perfectly elastic* 35.) In Graph G, moving from ED1 to ED 2 most likely represents a. The global market impact of an import tax by a small country* b. The global market impact of a quota by a small country c. The global market impact of an export tax by a small country d. None of the above 36.) Which of the following is the equilibrium world price in Graph G a. P 1* b. P 2 c. Five dollars d. All of the above Page 10 of 14

11 37.) Graph H most likely represents a. Impact on domestic markets by a large country s trade tariff* b. Impact on world demand by a small country s trade tariff c. Impact on world supply by a large country s trade tariff d. Impact on world supply by a large country s trade quota 38.) In Graph H, P 2 most likely represents a. A shift in the domestic supply b. The domestic price after an import quota c. The domestic price after an import tax* d. The domestic price before import tax 39.) In Graph H, the government revenue from the import industry is best described by which area? a. c + e b. e c. c + a* d. a 40.) In Graph H, price P 4 is caused by a. Decreased demand by the exporting country b. Increased demand by the exporting country c. Decreased demand by the importing country* d. Increased demand by the importing country 41.) One reason for the policy shown in Graph H is a. To protect domestic consumers Page 11 of 14

12 b. To protect domestic producers* c. To become more dependent on trade d. All of the above 42.) In Graph H, Q 1 and Q 2 are a. The quantities supplied to the importing country by the world before and after the policy b. The quantities demanded by the importing country before and after the policy c. The quantities demanded by the world before and after the policy d. The quantities supplied by the domestic producers before and after the policy* 43.) The difference between the supply curve S1 and S2 in Graph I is the amount of a. The domestic consumption b. The quantity of the import quota* c. The tax on imports d. The quantity of the export quota 44.) Graph I most likely represents a. A small importing country* b. A small exporting country c. A large importing country d. None of the above 45.) The policy in Graph I will cause a producer surplus of Page 12 of 14

13 a. x b. y c. z* d. none of the above 46.) According to the policy in Graph I, there will be a. A government loss of (w + x + y + z) b. A consumer gain of (w + x + y + z) c. A government revenue of (y)* d. A producer loss of (w) 47.) The difference between Q 1 and Q 2 in Graph I is a. The import quota b. The difference between the imports before the policy and imports after the policy c. The amount imported d. Both a and c* 48.) In graph I, P 3 represents a. The domestic price with free trade and no policies b. The world price after the importing country s policy is implemented c. The world price before any policy is implemented d. All of the above* 49.) What would be the most likely cause of a shift from line A to line B in Graph J? a. An import subsidy by a large importing country b. An import tax by a large importing country* c. An import tax by a small importing country d. None of the above 50.) What type of market would most likely cause Line A in Graph J a. Free trade by the whole world* b. Free trade only by small importing countries c. Taxation by multiple large importing countries Page 13 of 14

14 d. A natural disaster in a large exporting country Page 14 of 14