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1) Country A imports 1,000 cars per month. After imposing a \$50 per car tariff, imports fall to 800 cars per month. How much does Country A's government collect in tariff revenue? a) \$90,000 b) \$50,000 c) \$40,000 d) \$10,000 e) \$60,000 Answer: c). Tariff revenue = tariff x imported cars = \$50 x 800 = \$40,000 2) The agreement between the United States, Mexico, and Canada that sought to lower trade barriers is known as a) The General Agreement of Tariffs and Trade b) The North American Free Trade Agreement c) The World Trade Organization d) The Smoot Hawley Tariff Act e) The New World Free Trade Agreement Answer: b) 3) Consider the market for laptops where the price is measured in dollars per laptop and the quantity is measured in laptops per year. The demand curve for laptops in the U.S. is D=- 2P+28, where D is the quantity demanded. Moreover, the supply curve for laptops in the U.S. is written as S=2P-6, where S is the quantity supplied. The world price is 5. 3.a) Find the equilibrium P and Q in the U.S. when no trade is permitted.

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