Unit 3 Exam Review Game

Candy is on the line!

Question #10Exports

0 Consumer surplus before trade is represented by which letter(s)?

Question #20Exports

0 Producer surplus changes by which letter(s) after trade?

Question #30Exports

0 Which letter represents a country’s gains from exporting goods?

Question #40 Imports

0 Is the world price set above or below the domestic price when a country imports a good?

Question #50 Imports

0 Who loses when a country imports a good?

Question #6

0Taxes on imported goods are called _______?

Question #70Will imports increase or decrease after a tariff is

imposed?

Question #80Government revenue from a tariff is represented by

which letter?

Question #90Deadweight loss from a tariff is represented by which

letters?

Question #100What are two other benefits from international trade?

Question #110What are two arguments for restricting trade?

Question #120What are the demand and supply curves called when

we talk about externalities?

Question #130What does the Marginal Social Benefit equal?0What does the Marginal Social Cost equal?

Question #140 Is the social cost or the private cost of a good greater

in the presence of a negative externality?

Question #150Where is the optimal allocation of resources for a

positive externality?

Question #160Which letter represents the deadweight loss from this

negative externality?

Question #170What is it called when an effective tax makes people

take into account the external effects of their actions?

Question #180What is the difference between command and control

policies and market based policies?

Question #190What market based policies could the government

implement to correct a market failure due to a negative externality?

Question #200What market based policy could the government

implement to correct a market failure due to a positive externality?

Question #210The market __________(underproduces/overproduces)

a good or service with a positive externality.

0The market ___________(underproduces/overproduces) a good or service with a positive externality.

Question #220What does the Coase Theorem argue?

Question #230What characterizes a public good/bad

Question #240Economically speaking, what kind of good would wi-fi

be at a crowded, pay-for-access internet café?

Question #250Public goods and common resources suffer from an

externality (external cost) because of what characteristic?

Key1. A+B2. B+D3. D4. below5. producers6. tariffs7. Decrease 8. E9. D+F10. Inc. competition, flow of ideas, lower costs (economies of scale), variety of goods11. Jobs, Nat Security, Infant Industry, Unfair Comp, Protection 12. Answers will vary with externality13. MSB = MSC + externality MSC = MPC + externality14. Social Cost15. Where MSB = MPC16. e17. Internalizing the externality18. Economic incentives19. Permits, Pigouvian tax20. Subsidy

21. Under-produce, over-produce22. Even when externalities exist the private market can reach efficient outcome, regardless of initial distribution of rights23. Non-excludable, non-rival24. Private good25. Rival good – reduces others’ use