Question : 71) The above figure shows the U.S. market for 1 : 1239193

71) The above figure shows the U.S. market for 1 carat diamonds. Area A is the

A) increase in producer surplus due to the import quota.

B) importers’ profit from the import quota.

C) decrease in consumer surplus due to the import quota.

D) deadweight loss from the import quota.

E) gain in total surplus due to the import quota.

72) If the United States negotiates a voluntary export restraint with international sugar producing nations, then

A) U.S. sugar buyers pay a lower price for sugar.

B) U.S. sugar producers produce a smaller quantity.

C) imports of sugar increase.

D) the U.S. government collects less revenue than if it imposed a tariff on sugar.

E) the foreign governments collect more revenue than if a tariff is imposed on sugar.

73) Which of the following methods of restricting trade does NOT create a deadweight loss?

A) a tariff

B) a quota

C) a voluntary export restraint

D) Both answers A and B are correct.

E) None of the above answers is correct because all the methods create a deadweight loss

74) Economists argue for free trade in import markets because

A) all consumers and producers benefit from importing goods.

B) the gains to the U.S. producers outweigh the losses to the U.S. consumers.

C) the gains to the U.S. consumers outweigh the losses to the U.S. producers.

D) no one is made worse off by importing goods.

E) importing goods decreases total surplus.

75) Economists argue for free trade in export markets because

A) all consumers and producers benefit from exporting goods.

B) the gains to the U.S. producers outweigh the losses to the U.S. consumers.

C) the gains to the U.S. consumers outweigh the losses to the U.S. producers.

D) no one is made worse off by exporting goods.

E) exporting goods decreases total surplus.

76) A tax on a good that is imposed when it is imported is called

A) an import quota.

B) a VER.

C) a tariff.

D) a sanction.

E) a border tax.

77) The average U.S. tariff was highest in the

A) 1930s.

B) 1940s.

C) 1970s.

D) 1980s.

E) 1990s.

78) Suppose the world price of a shirt is $10. If the United States imposes a tariff of $5 a shirt, then the price of a shirt in the

A) United States falls to $5.

B) United States rises to $15.

C) world falls to $5.

D) world rises to $5.

E) world rises to $15

79) When a tariff is imposed on a good, the ________ increases.

A) domestic quantity purchased

B) domestic quantity produced

C) quantity imported

D) quantity exported

E) world price

80) When a tariff is imposed on a good, domestic consumers of the good ________ and domestic producers of the good ________.

A) win; lose

B) lose; win

C) win; win

D) lose; lose

E) lose; neither win nor lose

81) Which of the following parties benefits from an import quota but not from a tariff?

A) the domestic government

B) domestic producers

C) domestic consumers

D) the person with the right to import the good

E) the foreign government