{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Practice_questions_for_exam__2

B sells in export markets at prices above prices in

Info iconThis preview shows pages 8–11. Sign up to view the full content.

View Full Document Right Arrow Icon
B) sells in export markets at prices above prices in its domestic markets or at prices below its average costs of production. C) sells in export markets at prices below prices in its domestic markets or at prices above its average costs of production. D) sells in export markets at prices below prices in its domestic markets or at prices below its average costs of production. 24. If a foreign country imposes a voluntary export restraint, then the: A) Consumer surplus will be lower than the case of a tariff by the home country. B) Producer surplus will be lower than the case of a tariff by the home country. C) Area of government revenue will be taken by the foreign country. D) Deadweight loss is smaller than the case of a tariff by the home country. 25. Suppose that the world price of sugar is $100 per ton. If a small country gives its sugar producers an export subsidy of $50 per ton, then domestic consumption of sugar will: A) fall. B) rise. C) remain unchanged. D) first fall, then rise. Use the following to answer question 26: Figure: Home's Exporting Industry I The supplied graph shows information about a home exporter. Suppose the Home is a small country. The world price is $125. Page 8
Background image of page 8

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
26. (Figure: Home's Exporting Industry I) According to the figure, the home country provides an export subsidy of _______, which results in an increase in exports of _____. A) $50; 40 B) $175; 120 C) $125; 100 D) $175; 100 27. How is a production subsidy different from an export subsidy? A) It is applied only to production sold within the nation. B) It is applied to all production and imports—everything consumed in the nation. C) It is a payment from government to all domestic production—not only to units exported. D) It kicks in when the export subsidy runs out. 28. For a small nation employing a production subsidy, domestic consumers: A) get to purchase the product at the world price the same as before the subsidy. B) have to pay a higher price for the product. C) get a reduced price for the product. D) purchase more of the product. Page 9
Background image of page 9
SCENARIO: DEMAND AND SUPPLY FOR IRON ORE The supplied table represents a demand and supply schedule for a small-country producer of iron ore. It sells output in its home market and on the world market at the world price of $70 per ton. Table: Demand and Supply for Iron Ore 29. (Scenario: Demand and Supply for Iron Ore) At the world price of $70, how many units will it export? A) 80 tons B) 70 tons C) 40 tons D) 30 tons 30. (Scenario: Demand and Supply for Iron Ore) Suppose that the country's government offers its iron ore producers a production subsidy of $10 per ton. How many tons will the country now export? A)
Background image of page 10

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page8 / 14

B sells in export markets at prices above prices in its...

This preview shows document pages 8 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online