Candy and cookie products are produced using sugar as a major ingredient. What is the effect in the market for domestic cookies if imported sugar is subject to a tariff.

price increases, quantity exchanged increases

price increases, quantity exchanged decreases

price decreases, quantity exchanged increases

price decreases, quantity exchanged decreases

There is no change to the market for cookies produced in the United States.

Boeing is an American aircraft manufacturer. For years Congress has subsidized Boeing.In foreign markets for aircraft made by Boeing and exported to other countries, what is the effect of the Congressional subsidy.

price increases, quantity exchanged increases

price increases, quantity exchanged decreases

price decreases, quantity exchanged increases

price decreases, quantity exchanged decreases

There is no change to the market for Boeing aircraft produced in the United States and exported.

The race to the bottom scenario is the situation where profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak environmental standards. Assume Amenia has unpolluted water, is un-developed, and has no environmental laws.Assume multi-national firms set up production in Amenia and begin polluting the underground aquifers.What is the likely change in the market for drinking water from underground aquifers in Amenia.

price increases, quantity exchanged increases

price increases, supply of water decreases

price decreases, quantity exchanged increases

price decreases, supply of water decreases

There is no change to the market for drinking water from underground aquifers.

Protection trade policy is discussed in the Module. According to information presented in the Module, which of the following statements is not true.

Natural fluctuations in markets can produce an excess supply of a particular good that results in the short term price of the good below the cost of production.

It is possible for a country to have protection policy in place to prevent dumping, and subsidize domestic firms that dump in other countries.

Subsidies can be a form of protection policy, and as depicted in a market graph, act to increase the supply of the domestic good.

The export of a product at a price less than its cost of production is always a form of an unfair trade practice known as dumping.

Assume there is an increase among Mexican investors for U.S. equities and bonds. This will cause all of the following except:

decrease in supply of the Mexican peso.

An increase in demand for U.S. dollars.

An increase in the exchange rate of the U.S. dollar with respect to the Mexican peso.

An increase in the quantity of U.S. dollars exchanged in foreign exchange markets.

In doing economic analysis of foreign exchange markets using market graphs, which of the following is not true.

Two graphs, each a market for one comparative currency, are used.

The demand curve in one market is always the first curve that shifts.

The Module on International Trade discusses foreign exchange markets. Which of the following is NOT discussed in the Module.

Foreign exchange markets differ from goods and services markets in that the demand and supply curves are interrelated.

Purchasing power parity is the ratio between the currencies of two countries at which each currency when exchanged for the other will purchase the same quantity of goods as it purchases at home.

The exchange rate is the price of one currency in terms of another currency and when examining exchange rates with graphical analysis is written as the amount of foreign currency needed to purchase one unit of the domestic currency.

Appreciation, also called "strengthening", is the situation of a currency being able to buy more of other currencies.

After currency trades have been analyzed, it is always the case that the quantity exchanged of both currencies has increased.

If the currency in one comparative market appreciates, the currency in the other market depreciates.