Question 1

Figure 9-2 
-Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be

Accepted Answer

A)   $10 and 40 baskets will be sold domestically.
B)   $10 and 105 baskets will be sold domestically.
C)   $7 and 70 baskets will be sold domestically.
D)   $7 and 40 baskets will be sold domestically.E) A) and C)
F) A) and B)

Question 2

Figure 9-1
The following diagram shows the domestic demand and domestic supply for a market.In addition,assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-1.Consumer surplus with free trade is

Accepted Answer

A)   $4,000.
B)   $8,000.
C)   $16,000.
D)   $18,000.E) None of the above
F) A) and B)

Question 3

Figure 9-1
The figure illustrates the market for wool in Scotland. 
-Refer to Figure 9-1.With trade,total surplus in the Scotland wool market amounts to

Accepted Answer

A)   312.5.
B)   367.0.
C)   467.5.
D)   495.0.E) A) and B)
F) A) and C)

Question 4

Suppose Ecuador imposes a tariff on imported bananas.If the increase in producer surplus is $50 million,the reduction in consumer surplus is $150 million,and the deadweight loss of the tariff is $30 million,then the tariff generates $130 million in revenue for the government.

Accepted Answer

A) True 
 B)False

Question 5

Free trade causes job losses in industries in which a country does not have a comparative advantage,but it also causes job gains in industries in which the country has a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 6

Figure 9-17 
-Refer to Figure 9-17.The deadweight loss caused by the tariff is

Accepted Answer

A)   $24.
B)   $72.
C)   $96.
D)   $144.E) A) and D)
F) A) and C)

Question 7

Figure 9-5 
-Refer to Figure 9-5.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country,given that wagons and horses are complements?

Accepted Answer

A)   The quantity of wagons that this country imports would increase.
B)   The quantity of wagons that this country imports would decrease,but the country would still be an importer of wagons.
C)   This country would switch from being an importer of wagons to an exporter of wagons.
D)   The domestic price without trade would move closer to the world price.E) C) and D)
F) A) and C)

Question 8

Scenario 9-1
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-1.Suppose the world price in this market is $8 per unit.If the country allows free trade,will the country import or export this good,and how many units will be imported/exported?

Accepted Answer

The countr...

Question 9

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Accepted Answer

A) True 
 B)False

Question 10

Figure 9-2 
-Refer to Figure 9-2.With free trade,this country will

Accepted Answer

A)   import 40 baskets.
B)   import 70 baskets.
C)   export 35 baskets.
D)   export 65 baskets.E) B) and C)
F) A) and D)

Question 11

Figure 9-20
The figure illustrates the market for rice in Vietnam. 
-Refer to Figure 9-20.From the figure it is apparent that

Accepted Answer

A)   Vietnam has a comparative advantage in producing rice,relative to the rest of the world.
B)   foreign countries have a comparative advantage in producing rice,relative to Vietnam.
C)   Vietnam has an absolute advantage in producing rice,relative to the rest of the world.
D)   foreign countries have an absolute advantage in producing rice,relative to Vietnam.E) A) and D)
F) A) and C)

Question 12

If a country's domestic price of a good is lower than the world price,then that country has a comparative advantage in producing that good.

Accepted Answer

A) True 
 B)False

Question 13

Figure 9-2
The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-2.Suppose the government imposes a tariff of $20 per unit.The deadweight loss caused by the tariff is

Accepted Answer

A)   $6,000.
B)   $9,000.
C)   $12,000.
D)   $15,000.E) A) and B)
F) All of the above

Question 14

Tariffs and quotas are different in the sense that

Accepted Answer

A)   tariffs cause deadweight losses,while quotas do not cause deadweight losses.
B)   tariffs raise revenue for the government,while quotas do not raise revenue for the government.
C)   tariffs enhance the well-being of domestic consumers,while quotas diminish the well-being of domestic consumers.
D)   tariffs enhance the well-being of domestic producers,while quotas diminish the well-being of domestic producers.E) None of the above
F) All of the above

Question 15

The small-economy assumption is necessary to analyze the gains and losses from international trade.

Accepted Answer

A) True 
 B)False

Question 16

Figure 9-20
The figure illustrates the market for rice in Vietnam. 
-Refer to Figure 9-20.From the figure it is apparent that

Accepted Answer

A)   Vietnam will experience a shortage of rice if trade is not allowed.
B)   Vietnam will experience a surplus of rice if trade is not allowed.
C)   Vietnam has a comparative advantage in producing rice,relative to the rest of the world.
D)   foreign countries have a comparative advantage in producing rice,relative to Vietnam.E) A) and C)
F) None of the above

Question 17

Assume,for Taiwan,that the domestic price of soybeans without international trade is lower than the world price of soybeans.This suggests that,in the production of soybeans,

Accepted Answer

A)   Taiwan has a comparative advantage over other countries and Taiwan will import soybeans.
B)   Taiwan has a comparative advantage over other countries and Taiwan will export soybeans.
C)   other countries have a comparative advantage over Taiwan and Taiwan will import soybeans.
D)   other countries have a comparative advantage over Taiwan and Taiwan will export soybeans.E) None of the above
F) C) and D)

Question 18

If the world price of textiles is higher than Vietnam's domestic price of textiles without trade,then Vietnam

Accepted Answer

A)   should import textiles.
B)   has a comparative advantage in textiles.
C)   should produce just enough textiles to meet its domestic demand.
D)   should refrain altogether from producing textiles.E) A) and B)
F) A) and C)

Question 19

Which of the following is the most accurate statement?

Accepted Answer

A)   Protection is necessary in order for young industries to grow up and be successful.
B)   Protection is not necessary for an industry to grow.
C)   Protection is necessary because if young industries are not protected,they may suffer losses.
D)   Protection may not always be necessary for infant industries,but it has proven to be useful in most cases.E) B) and C)
F) A) and D)

Question 20

Figure 9-11 
-Refer to Figure 9-11.The change in total surplus in this market because of trade is

Accepted Answer

A)   A,and this area represents a loss of total surplus.
B)   B,and this area represents a gain in total surplus.
C)   C,and this area represents a loss of total surplus.
D)   D,and this area represents a gain in total surplus.E) All of the above
F) A) and B)

Exam 9: Application: International Trade

Figure 9-2 The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. -Refer to Figure 9-2.Suppose the government imposes a tariff of $20 per unit.The deadweight loss caused by the tariff is

Correct Answer
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Tariffs and quotas are different in the sense that

Correct Answer
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Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.From the figure it is apparent that

Correct Answer
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Assume,for Taiwan,that the domestic price of soybeans without international trade is lower than the world price of soybeans.This suggests that,in the production of soybeans,

Correct Answer
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Figure 9-17 -Refer to Figure 9-17.The deadweight loss caused by the tariff is

Correct Answer
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Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.With trade,total surplus in the Scotland wool market amounts to

Correct Answer
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If the world price of textiles is higher than Vietnam's domestic price of textiles without trade,then Vietnam

Correct Answer
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Correct Answer
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The countr...
View Answer

The small-economy assumption is necessary to analyze the gains and losses from international trade.

Correct Answer
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If a country's domestic price of a good is lower than the world price,then that country has a comparative advantage in producing that good.

Correct Answer
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Which of the following is the most accurate statement?

Correct Answer
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Figure 9-5 -Refer to Figure 9-5.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country,given that wagons and horses are complements?

Correct Answer
verified

Suppose Ecuador imposes a tariff on imported bananas.If the increase in producer surplus is $50 million,the reduction in consumer surplus is $150 million,and the deadweight loss of the tariff is $30 million,then the tariff generates $130 million in revenue for the government.

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11.The change in total surplus in this market because of trade is

Correct Answer
verified

Figure 9-1 The following diagram shows the domestic demand and domestic supply for a market.In addition,assume that the world price in this market is $40 per unit. -Refer to Figure 9-1.Consumer surplus with free trade is

Correct Answer
verified

Figure 9-2 -Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be

Correct Answer
verified

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Correct Answer
verified

Figure 9-2 -Refer to Figure 9-2.With free trade,this country will

Correct Answer
verified

Free trade causes job losses in industries in which a country does not have a comparative advantage,but it also causes job gains in industries in which the country has a comparative advantage.

Correct Answer
verified

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.From the figure it is apparent that

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-2 The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. -Refer to Figure 9-2.Suppose the government imposes a tariff of $20 per unit.The deadweight loss caused by the tariff is

Correct AnswerverifiedShow Answer

Tariffs and quotas are different in the sense that

Correct AnswerverifiedShow Answer

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.From the figure it is apparent that

Correct AnswerverifiedShow Answer

Assume,for Taiwan,that the domestic price of soybeans without international trade is lower than the world price of soybeans.This suggests that,in the production of soybeans,

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17.The deadweight loss caused by the tariff is

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.With trade,total surplus in the Scotland wool market amounts to

Correct AnswerverifiedShow Answer

If the world price of textiles is higher than Vietnam's domestic price of textiles without trade,then Vietnam

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe countr...View AnswerShow Answer

The small-economy assumption is necessary to analyze the gains and losses from international trade.

Correct AnswerverifiedShow Answer

If a country's domestic price of a good is lower than the world price,then that country has a comparative advantage in producing that good.

Correct AnswerverifiedShow Answer

Which of the following is the most accurate statement?

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country,given that wagons and horses are complements?

Correct AnswerverifiedShow Answer

Suppose Ecuador imposes a tariff on imported bananas.If the increase in producer surplus is $50 million,the reduction in consumer surplus is $150 million,and the deadweight loss of the tariff is $30 million,then the tariff generates $130 million in revenue for the government.

Correct AnswerverifiedShow Answer

Figure 9-11 -Refer to Figure 9-11.The change in total surplus in this market because of trade is

Correct AnswerverifiedShow Answer

Figure 9-1 The following diagram shows the domestic demand and domestic supply for a market.In addition,assume that the world price in this market is $40 per unit. -Refer to Figure 9-1.Consumer surplus with free trade is

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be

Correct AnswerverifiedShow Answer

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to Figure 9-2.With free trade,this country will

Correct AnswerverifiedShow Answer

Free trade causes job losses in industries in which a country does not have a comparative advantage,but it also causes job gains in industries in which the country has a comparative advantage.

Correct AnswerverifiedShow Answer

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.From the figure it is apparent that

Correct AnswerverifiedShow Answer

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The countr...
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