Question

Question 4

1. Which would not be a benefit that consumers would experience from trade?

   	a.	the ability to consume goods that are not produced domestically
   	b.	lower prices for imported goods
   	c.	a greater variety of goods to choose from
   	d.	a greater supply of domestically produced goods for sale

3.33 points

Question 5

1. Which producer would MOST likely be harmed from free trade?

   	a.	domestic manufacturers that use a lot of imported raw materials
   	b.	domestic manufacturers that compete against foreign imports
   	c.	domestic manufacturers that produce goods primarily for export
   	d.	domestic manufacturers that face no foreign competitors

3.33 points

Question 6

1. When a country imposes a new tariff on imported rice to protect its rice farmers, which of these amounts would be the largest in value?

   	a.	tariff revenue generated from the rice tariffs
   	b.	gain in producer surplus by domestic rice farmers
   	c.	loss of consumer surplus by domestic rice consumers
   	d.	deadweight loss resulting from the inefficiency of the tariff

Answer 1

Answer-4. Correct option is 'd'

''A greater supply of domestically produced goods for sale'', this would not be a benefit that consumers would experience from trade. Benefit that consumers would experience from trade are :

1) the ability to consume goods that are not produced domestically.

2) lower prices for imported goods.

3) a greater variety of goods to choose from.

Answer-5. Correct option is 'b'

Domestic manufacturers that compete against foreign imports would MOST likely be harmed from free trade. Because domestic manufacturer could not compete with the MNC's with deep pockets unless the government reconsidered its decision on zero import duty, stipulated a domestic quota.

Answer-6. Correct option is 'c'

When a country imposes a new tariff on imported rice to protect its rice farmers, loss of consumer surplus by domestic rice consumers amounts would be the largest in value. Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result.