Question

1) If the United States imposes a tariff on Honduran blueberries to retaliate against the quotas Honduras previously placed on US goods, then the United States will experience:

a. an additional increase in total surplus

b. a additional decrease in total surplus

c. both an increase in total surplus is possible and a decrease in total surplus is possible

d. no additional change in total surplus

2) Tariffs on imported goods are politically useful because:

a. they generate revenue that can be used to fund public projects

b. they help domestic producers who lobby for tariffs on goods they produce domestically

c. they help domestic consumers who lobby for tariffs on goods they purchase

d. a and b are true

e. b and c are true

3) True or False: Imports decrease the total surplus of a country while Exports increase the total surplus of a country.

4) Refer to Figure 9-1. With trade, Scotland will

a. export 11 units of wool.

b. export 5 units of wool.

c. import 15 units of wool.

d. import 6 units of wool.

*I think the answer might be C for 4 but I am not sure.

Prics Domestic supply World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 unity

Answer 1

a) If the US is retaliating then they will experience an additional decrease in the total surplus in the market. the answer is "B".

b) "D"

They raise the revenue of the government and also help the local producers in the market who lobby hard in the market.

c) False, they both increase the total surplus of the country.

d) "A"

They will export 11 units of wool in the international market.