The Demand and Supply equations of the leather shoe industry in the United States are QD 25 P and QS 20 4P 1 What is the equilibrium price A 25 B C 13 D 9 2 What is the equilibrium quantity 15 A B C 16 14 12 D 10 3 If the current market price is set at 15 there will be a of in the market A Surplus 20 B Shortage 30 units units C Surplus 30 D Shortage 20 unites units 4 what is the producers surplus A B 90 72 C 68 D 32 5 what is the total surplus A 160 B 200 C 160 6 what is the consumers surplus D 140 A 90 B 128 C 68 D 32 7 A tax on an imported good is called a A trade B supply tax tax C quota When in our analysis of the gains and losses from international trade we assume that a particular country is small we are A assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries from international trade B making an assumption that is not necessary to analyze the gains and losses C assuming international trade can benefit producers but not consumers in that country D assuming there is no demand for that country s domestically produced goods by other countries 10 In analyzing international trade we often focus on a country whose economy is small relative to the rest of the world We do so A because then we can assume that world prices of goods are unaffected by that country s participation in international trade B in order to rule out the possibility of tariffs or quotas C because it is impossible to analyze the gains and losses from international trade without making this assumption D All of the above are correct 11 illustrates the market for calculators in a country Figure 6 Refer to Figure 6 Without trade consumer surplus is 1 690 D 423 12 Refer to Figure 6 With free trade this country will A 845 B 3 380 C A export 50 calculators B export 100 calculators C import 50 calculators D import 100 calculators Answer Key 1 D 2 A 3 C 4 D 5 C 6 B 7 D 8 A 9 A 10 11 12 A A B
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