Question 1

When,in our analysis of the gains and losses from international trade,we assume that a particular country is small,we are

Accepted Answer

A)   assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries.
B)   assuming there is no demand for that country's domestically-produced goods by other countries.
C)   assuming international trade can benefit producers,but not consumers,in that country.
D)   making an assumption that is not necessary to analyze the gains and losses from international trade.E) A) and B)
F) All of the above

Question 2

When a country that imports a particular good imposes an import quota on that good,

Accepted Answer

A)   consumer surplus increases and total surplus increases in the market for that good.
B)   consumer surplus increases and total surplus decreases in the market for that good.
C)   consumer surplus decreases and total surplus increases in the market for that good.
D)   consumer surplus decreases and total surplus decreases in the market for that good.E) A) and B)
F) C) and D)

Question 3

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. 
-Refer to Figure 9-16.The tariff

Accepted Answer

A)   decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
B)   decreases producer surplus by the area C + D and decreases consumer surplus by the area D + E + F.
C)   increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
D)   increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F.E) None of the above
F) C) and D)

Question 4

Figure 9-15 
-Refer to Figure 9-15.For the saddle market,area B represents

Accepted Answer

A)   government's revenue from the tariff.
B)   the deadweight loss of the tariff.
C)   the increase in producer surplus,relative to the free-trade situation,as a result of the tariff.
D)   None of the above is correct.E) B) and C)
F) A) and C)

Question 5

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,by how much do consumer surplus,producer surplus,and producer surplus change?

Accepted Answer

With trade,consumer surplus in...

Question 6

Which of the following is not a commonly-advanced argument for trade restrictions?

Accepted Answer

A)   the jobs argument
B)   the national-security argument
C)   the infant-industry argument
D)   the efficiency argumentE) A) and B)
F) All of the above

Question 7

Assume for the U.S.that the domestic price of bananas without international trade is higher than the world price of bananas.This suggests that

Accepted Answer

A)   the U.S.has a comparative advantage over other countries in the production of bananas,and the U.S.will export bananas.
B)   the U.S.has a comparative advantage over other countries in the production of bananas,and the U.S.will import bananas.
C)   other countries have a comparative advantage over the U.S.in the production of bananas,and the U.S.will export bananas.
D)   other countries have a comparative advantage over the U.S.in the production of bananas,and the U.S.will import bananas.E) B) and C)
F) B) and D)

Question 8

Figure 9-5 
-Refer to Figure 9-5.Total surplus with trade exceeds total surplus without trade by

Accepted Answer

A)   $60.
B)   $75.
C)   $135.
D)   $210.E) A) and B)
F) A) and C)

Question 9

Figure 9-1
The figure illustrates the market for wool in Scotland. 
-Refer to Figure 9-1.In the absence of trade,the equilibrium price of wool in Scotland is

Accepted Answer

A)   $15.
B)   $45.
C)   $55.
D)   $70.E) C) and D)
F) B) and C)

Question 10

Scenario 9-2
For a small country called Boxland,the equation of the domestic demand curve for cardboard is  ,
where  represents the domestic quantity of cardboard demanded,in tons,and  represents the price of a ton of cardboard.
For Boxland,the equation of the domestic supply curve for cardboard is  ,
where  represents the domestic quantity of cardboard supplied,in tons,and  again represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $45.Then Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)   $88.75.
B)   $102.50.
C)   $122.50.
D)   $135.00.E) All of the above
F) None of the above

Question 11

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

Accepted Answer

A)   Singapore has a comparative advantage over other countries and Singapore will import soybeans.
B)   Singapore has a comparative advantage over other countries and Singapore will export soybeans.
C)   other countries have a comparative advantage over Singapore and Singapore will import soybeans.
D)   other countries have a comparative advantage over Singapore and Singapore will export soybeans.E) A) and D)
F) A) and B)

Question 12

After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat,the nation began importing wheat.As a result,total surplus in the wheat market increased by $10 million.Which of the following changes could have occurred as well?

Accepted Answer

A)   The price of wheat in that nation increased with the adoption of the new policy.
B)   The domestic quantity of wheat supplied increased with the adoption of the new policy.
C)   Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million.
D)   Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million.E) All of the above
F) B) and C)

Question 13

The world price of a ton of steel is $650.Before Russia allowed trade in steel,the price of a ton of steel there was $1,000.Once Russia allowed trade in steel with other countries,Russia began

Accepted Answer

A)   exporting steel and the price per ton in Russia decreased to $650.
B)   exporting steel and the price per ton in Russia remained at $1,000.
C)   importing steel and the price per ton in Russia decreased to $650.
D)   importing steel and the price per ton in Russia remained at $1,000.E) B) and C)
F) A) and B)

Question 14

Figure 9-5 
-Refer to Figure 9-5.With trade,the price of wagons in this country is

Accepted Answer

A)   $8,with 70 wagons produced in this country,20 of which are exported.
B)   $8,with 90 wagons produced in this country,50 of which are exported.
C)   $5,with 40 wagons produced in this country and another 30 wagons imported.
D)   $5,with 40 wagons produced in this country and another 50 wagons imported.E) A) and C)
F) None of the above

Question 15

How does an import quota differ from an equivalent tariff?

Accepted Answer

Both the import quota and the tariff rai...

Question 16

Figure 9-20
The figure illustrates the market for rice in Vietnam. 
-Refer to Figure 9-20.With trade,Vietnamese rice producers will produce

Accepted Answer

A)   2,000 units of rice and their producer surplus will be 4,000.
B)   2,000 units of rice and their producer surplus will be 7,500.
C)   3,000 units of rice and their producer surplus will be 7,500.
D)   3,000 units of rice and their producer surplus will be 9,000.E) C) and D)
F) A) and D)

Question 17

Which of the following is the most accurate statement?

Accepted Answer

A)   The one argument for restricting trade that almost all economists accept as valid is the infant-industry argument.
B)   Almost all economists insist that it is never appropriate to protect "key" industries,even when there are legitimate concerns about national security.
C)   The idea that one nation might want to threaten another nation with a trade restriction is associated with the protection-as-a-bargaining-chip argument for restricting trade.
D)   The protection-as-a-bargaining-chip argument for restricting trade is also known as the infant-industry argument.E) A) and C)
F) A) and B)

Question 18

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.With free trade allowed,this country

Accepted Answer

A)   exports 200 units of the good.
B)   exports 400 units of the good.
C)   imports 400 units of the good.
D)   exports 800 units of the good.E) B) and D)
F) None of the above

Question 19

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.Relative to the free-trade outcome,the imposition of the tariff

Accepted Answer

A)   decreases imports of the good by 300 units and increases domestic production of the good by 300 units.
B)   decreases imports of the good by 300 units and increases domestic production of the good by 600 units.
C)   decreases imports of the good by 600 units and increases domestic production of the good by 300 units.
D)   decreases imports of the good by 600 units and increases domestic production of the good by 600 units.E) B) and D)
F) B) and C)

Question 20

William and Jamal live in the country of Dumexia.When Dumexia legalized international trade in bananas,the price of bananas in Dumexia increased.As a result,William became better off and Jamal became worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

How does an import quota differ from an equivalent tariff?

Correct Answer
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Both the import quota and the tariff rai...
View Answer

Correct Answer
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Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.In the absence of trade,the equilibrium price of wool in Scotland is

Correct Answer
verified

Correct Answer
verified

William and Jamal live in the country of Dumexia.When Dumexia legalized international trade in bananas,the price of bananas in Dumexia increased.As a result,William became better off and Jamal became worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Correct Answer
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Figure 9-5 -Refer to Figure 9-5.With trade,the price of wagons in this country is

Correct Answer
verified

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

Correct Answer
verified

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.With trade,Vietnamese rice producers will produce

Correct Answer
verified

When,in our analysis of the gains and losses from international trade,we assume that a particular country is small,we are

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.With free trade allowed,this country

Correct Answer
verified

When a country that imports a particular good imposes an import quota on that good,

Correct Answer
verified

Figure 9-5 -Refer to Figure 9-5.Total surplus with trade exceeds total surplus without trade by

Correct Answer
verified

The world price of a ton of steel is $650.Before Russia allowed trade in steel,the price of a ton of steel there was $1,000.Once Russia allowed trade in steel with other countries,Russia began

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15.For the saddle market,area B represents

Correct Answer
verified

Which of the following is not a commonly-advanced argument for trade restrictions?

Correct Answer
verified

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,by how much do consumer surplus,producer surplus,and producer surplus change?

Correct Answer
verified
With trade,consumer surplus in...
View Answer

Correct Answer
verified

Which of the following is the most accurate statement?

Correct Answer
verified

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. -Refer to Figure 9-16.The tariff

Correct Answer
verified

Assume for the U.S.that the domestic price of bananas without international trade is higher than the world price of bananas.This suggests that

Correct Answer
verified

Exam 9: Application: International Trade

How does an import quota differ from an equivalent tariff?

Correct AnswerverifiedBoth the import quota and the tariff rai...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.In the absence of trade,the equilibrium price of wool in Scotland is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

William and Jamal live in the country of Dumexia.When Dumexia legalized international trade in bananas,the price of bananas in Dumexia increased.As a result,William became better off and Jamal became worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.With trade,the price of wagons in this country is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.With trade,Vietnamese rice producers will produce

Correct AnswerverifiedShow Answer

When,in our analysis of the gains and losses from international trade,we assume that a particular country is small,we are

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.With free trade allowed,this country

Correct AnswerverifiedShow Answer

When a country that imports a particular good imposes an import quota on that good,

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.Total surplus with trade exceeds total surplus without trade by

Correct AnswerverifiedShow Answer

The world price of a ton of steel is $650.Before Russia allowed trade in steel,the price of a ton of steel there was $1,000.Once Russia allowed trade in steel with other countries,Russia began

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15.For the saddle market,area B represents

Correct AnswerverifiedShow Answer

Which of the following is not a commonly-advanced argument for trade restrictions?

Correct AnswerverifiedShow Answer

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,by how much do consumer surplus,producer surplus,and producer surplus change?

Correct AnswerverifiedWith trade,consumer surplus in...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following is the most accurate statement?

Correct AnswerverifiedShow Answer

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. -Refer to Figure 9-16.The tariff

Correct AnswerverifiedShow Answer

Assume for the U.S.that the domestic price of bananas without international trade is higher than the world price of bananas.This suggests that

Correct AnswerverifiedShow Answer

Correct Answer
verified
Both the import quota and the tariff rai...
View Answer

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With trade,consumer surplus in...
View Answer

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