04 Jun Question Week 1 & 2 Study Problems
Question
Week 1 & 2 Study Problems
Terms to Know
Autarky price
Producer Surplus
Consumer Surplus
International Price
World Price
Import Demand
Export Supply
Net National Gains from Trade
Basic Supply & Demand Model
Producer surplus is:
found on a graph as the area under the equilibrium price and above the supply curve.
The net gain in economic well-being associated with producing and selling a quantity of a good.
Used to measure the impact of a price change on producers’ economic well-being.
All of the above.
Figure 2.1 CAUTION: For consumer and producer surplus calculations, you may need to redraw the graph to scale.
Referring to figure 2.1, at a price of $70, the amount of consumer surplus is:
$6,000
$8,000
$15,000
$30,000
Referring to figure 2.1, at a price of $70, the amount of producer surplus is:
$6,000
$8,000
$15,000
$30,000
Referring to figure 2.1, at a price of $120, the amount of consumer surplus is ____ and the amount of producer surplus is _____. (Assume that consumers and producers are able to transact at their desired quantities.)
$9,500; $1,500
$1,500; $1,500
$1,500; $16,500
$1,500; $9,500
The opening up of free trade brings gains to:
All producers.
Producers in export industries.
Producers in import-competing industries.
Workers in import-competing industries.
An increase in the imports of clothing into the United States will benefit _____ and hurt ____.
U.S clothing producers; foreign clothing producers
foreign clothing producers; foreign clothing consumers
U.S clothing consumers; foreign clothing producers
U.S clothing consumers; U.S. clothing producers
Which of the following says that any dollar of gain or loss will be equally valued, regardless of who experiences it?
Consumer surplus
Producer surplus
Arbitrage
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