AP Microeconomics Practice Quiz: International Trade and Public Policy
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Test your understanding with short quizzes. This quiz has 10 questions to check your progress.
Question 1 of 10
All Questions (10)
A) A limit on the quantity of a good that can be imported or exported.
B) A tax imposed by a government on an imported good.
C) A government payment to domestic producers to encourage exports.
D) A gap between domestic supply and demand filled by trade.
Correct Answer: B
The content states that 'Tariffs, which governments sometimes use to influence international trade, affect domestic price, quantity, government revenue...'. This implies a tariff is a tool used by governments, and its effect on price and government revenue is consistent with it being a tax on trade.
A) Both consumer surplus and producer surplus will increase.
B) Both consumer surplus and producer surplus will decrease.
C) Consumer surplus will increase, and producer surplus will decrease.
D) Consumer surplus will decrease, and producer surplus will increase.
Correct Answer: C
The content states that opening an economy to trade affects consumer and producer surplus and that the equilibrium price can be lower than under autarky. When the price falls to the world price, domestic consumers benefit from lower prices (increasing consumer surplus), while domestic producers receive less revenue for their goods (decreasing producer surplus).
A) A decrease in the domestic price of the good.
B) An increase in government tax revenue.
C) An increase in consumer surplus.
D) A decrease in the quantity supplied by domestic producers.
Correct Answer: B
The content explicitly states that tariffs 'affect domestic price, quantity, government revenue, and consumer surplus and total economic surplus.' A tariff is a tax, and the collection of this tax on imported goods leads to an increase in government revenue.
A) To generate revenue for the government from imports.
B) To alter the quantities of a good produced and traded.
C) To lower the domestic price of a good for consumers.
D) To subsidize domestic producers with tax money.
Correct Answer: B
The provided text states, 'Quotas can be used to alter quantities produced and therefore affect price, consumer surplus, and total economic surplus.' This indicates their primary function is to directly control the quantity of a good.
A) The total domestic production of the good.
B) The total domestic consumption of the good.
C) The gap between domestic supply and demand at the world price.
D) The amount of revenue collected by the government.
Correct Answer: C
The content states that when an economy opens to trade, 'the gap between domestic supply and demand is filled by trade.' If the world price is lower than the domestic price, domestic demand will exceed domestic supply, and this gap is filled by imports.
A) It decreases the domestic price and increases consumer surplus.
B) It increases the quantity of the good available and decreases the price.
C) It limits the quantity available, which leads to a higher domestic price.
D) It has no effect on price but generates revenue for the government.
Correct Answer: C
The content specifies that 'Quotas can be used to alter quantities produced and therefore affect price, consumer surplus, and total economic surplus.' By limiting the quantity of imports, a quota reduces the total supply available in the domestic market, causing the domestic price to rise.
A) $80
B) $120
C) $200
D) $240
Correct Answer: B
Government revenue from a tariff is calculated as the tariff amount multiplied by the quantity of imports. The quantity of imports is the difference between domestic quantity demanded and domestic quantity supplied at the new price. Imports = 100 units (demanded) - 40 units (supplied) = 60 units. Government Revenue = Tariff per unit * Quantity of imports = $2 * 60 = $120.
A) Consumer surplus
B) The world price of the good
C) Government revenue
D) The domestic price of the good
Correct Answer: B
The provided content states that tariffs affect 'domestic price, quantity, government revenue, and consumer surplus and total economic surplus.' It does not mention that a single country's tariff affects the overall world price, which is typically assumed to be constant for a small economy in the context of these models.
A) The country will import the product, and domestic consumer surplus will increase.
B) The country will export the product, and domestic producer surplus will increase.
C) The country will import the product, and domestic producer surplus will increase.
D) The country will export the product, and domestic consumer surplus will increase.
Correct Answer: B
The content states that the 'equilibrium price can be higher or lower than under autarky.' If the world price is higher, domestic producers will be able to sell their goods for more, both domestically and abroad. This will lead them to export the good. The higher price increases producer surplus. Consumer surplus would decrease as domestic consumers face a higher price.
A) Total economic surplus increases because government revenue is created.
B) Total economic surplus remains unchanged because the loss in consumer surplus is equal to the gain in producer surplus and government revenue.
C) Total economic surplus decreases because the gain in producer surplus and government revenue is less than the loss in consumer surplus.
D) Total economic surplus increases because domestic producers are better off.
Correct Answer: C
The content states that tariffs affect 'consumer surplus and total economic surplus.' While domestic producer surplus and government revenue increase, the tariff raises the price for consumers, causing a loss in consumer surplus. In a competitive market, the loss to consumers is greater than the combined gains for producers and the government, resulting in a net decrease in total economic surplus (deadweight loss).