Econ Exam #2 Flashcards Preview

Spring 2013 > Econ Exam #2 > Flashcards

Flashcards in Econ Exam #2 Deck (13)
Loading flashcards...
1
Q

What impact would a tariff on imported textile goods into the US have on domestic textile production?

A

It will increase domestic production

2
Q

When Korea exports steel into another country there are winners and losers. Who wins and who loses?

A

Producers of steel win and users of steel lose

3
Q

If a country has a comparative advantage in the production of a good, then that country:

A

has a lower opportunity cost in the production of that good

4
Q

What is a quota?

A

a limit on the quantity of imported goods

5
Q

As trade barrier, a tariff:

A

Tends to result in the deadweight loss or decrease the welfare of both consumers and producers

6
Q

Whena country engages in free trade, there is a net gain from the trade for the country, but there are always winners and losers in a trading company. True or False?

A

True

7
Q

If a country sells its product at a cheaper price in another country than it would in its own country, this is called ______.

A

Dumping

8
Q

Economic efficiency means maximizing:

A

total economic well being

9
Q

Consumer surplus can be defined as

A

the extra benefit that consumers realize as a result of the difference between Pw - Pa

10
Q

Producer surplus can be defined as

A

the extra benefit that producers realize as a result of the difference between what they actually receive and the minimum price they are willing to accept to produce anything

11
Q

What happens to the consumer surplus when the product price rises?

A

Consumer surplus decreases

12
Q

What happens to the producer surplus when the product price rises?

A

Producer surplus increases

13
Q

What kind of production do tariffs increase?

A

Domestic Production