WGU C211 Global Economics

Suppose that the United States imposes a tariff on avocados imported from Mexico. What impact will this have on the price paid for avocados by United States citizens? - Answer- The price will increase. Which of the following is a consequence of a country imposing a tariff on imported goods? - Answer- The demand for foreign produced goods decreases. Suppose that the United States imposes a tariff on salt. What impact might this tariff have on the price for domestic consumers? - Answer- Consumers will pay a higher price. Applying a tariff to coconuts will have the following effect: - Answer- Increase the domestic price of coconuts. Which of the following is NOT a restriction to trade? - Answer- Free trade areas. What is the significant difference between an import quota and a tariff? - Answer- A tariff raises revenue for the government and an import quota creates surplus for those who obtain licenses to import. Suppose that the price of a good increases (all else held constant). Which of the following would happen along with the change in price? - Answer- Consumer surplus would decrease. Suppose that Bob goes to the market and is willing to pay $500 for a new chainsaw. Bob is able to find the chainsaw for only $400. Which of the following follows from Bob's circumstance? - Answer- His consumer surplus is $100. Which statement is true of consumer surplus? - Answer- Consumer surplus represents value to buyers in excess of the price paid for the product. Which statement is true? - Answer- Total surplus is the sum of consumer and produce