Question 1

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. 
-Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Accepted Answer

A)  consumer surplus changes from the area A + B + D to the area A.
B)  producer surplus changes from the area C to the area B + C + D.
C)  total surplus decreases by the area D.
D)  All of the above are correct.E) A) and C)
F) B) and D)

Question 2

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Accepted Answer

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

Question 3

Suppose the Ivory Coast, a small country, imports wheat at the world price of $4 per bushel. If the Ivory Coast imposes a tariff of $1 per bushel on imported wheat, then, other things equal, the price of wheat in Ivory Coast will increase, but by less than $1.

Accepted Answer

A) True 
 B)False

Question 4

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. 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 i...

Question 5

Figure 9-3. The domestic country is China. 
-Refer to Figure 9-3. With trade, producer surplus in China is

Accepted Answer

A)  $800.
B)  $1,200.
C)  $1,800.
D)  $2,700.E) A) and D)
F) None of the above

Question 6

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Accepted Answer

A)  other countries have an absolute advantage, relative to Isolani, in producing cars.
B)  Isolani has a comparative advantage, relative to other countries, in producing cars.
C)  if Isolani were to allow trade, it would import motorcycles.
D)  the world price of motorcycles exceeds the price of motorcycles in Isolani.E) A) and B)
F) All of the above

Question 7

In a December 2007 New York Times column Paul Krugman argued in favor of

Accepted Answer

A)  protectionism based on the national-security argument.
B)  protectionism based on the infant-industry argument.
C)  protectionism based on the unfair-competition argument.
D)  keeping world markets relatively open.E) All of the above
F) B) and C)

Question 8

If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

Accepted Answer

A) True 
 B)False

Question 9

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) A) and D)
F) A) and C)

Question 10

Figure 9-15 1 and Q1. B) P1 and Q4. C) P2 and Q2. D) P2 and Q3." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-15. With the tariff, the price paid and quantity demanded by domestic buyers are

Accepted Answer

A)  P1 and Q1.
B)  P1 and Q4.
C)  P2 and Q2.
D)  P2 and Q3.E) A) and C)
F) None of the above

Question 11

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

Accepted Answer

A)  Vietnam has a comparative advantage over other countries and Vietnam will import textiles.
B)  Vietnam has a comparative advantage over other countries and Vietnam will export textiles.
C)  other countries have a comparative advantage over Vietnam and Vietnam will import textiles.
D)  other countries have a comparative advantage over Vietnam and Vietnam will export textiles.E) All of the above
F) B) and D)

Question 12

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach, because the multilateral approach can reduce trade restrictions abroad as well as at home.

Accepted Answer

A) True 
 B)False

Question 13

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Accepted Answer

Jumanji wi...

Question 14

Figure 9-26
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers produce?

Accepted Answer

Domestic consumers w...

Question 15

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. With free trade, consumer surplus is

Accepted Answer

A)  $320.
B)  $640.
C)  $845.
D)  $1,690.E) A) and B)
F) A) and C)

Question 16

Figure 9-21
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 9-21. With free trade, domestic production and domestic consumption, respectively, are

Accepted Answer

A)  1,200 and 800.
B)  1,600 and 1,200.
C)  1,600 and 800.
D)  1,200 and 1,200E) C) and D)
F) B) and C)

Question 17

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) B) and D)
F) A) and B)

Question 18

Relative to a situation in which domestic firms do not compete with foreign firms, firms in countries that engage in free trade

Accepted Answer

A)  can realize economies of scale more fully.
B)  have greater market power.
C)  experience larger producer surplus.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 19

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good,

Accepted Answer

A)  producer surplus increases and total surplus increases in the market for that good.
B)  producer surplus increases and total surplus decreases in the market for that good.
C)  producer surplus decreases and total surplus increases in the market for that good.
D)  producer surplus decreases and total surplus decreases in the market for that good.E) None of the above
F) B) and C)

Question 20

A tariff is a tax placed on

Accepted Answer

A)  an exported good and it lowers the domestic price of the good below the world price.
B)  an exported good and it ensures that the domestic price of the good stays the same as the world price.
C)  an imported good and it lowers the domestic price of the good below the world price.
D)  an imported good and it raises the domestic price of the good above the world price.E) None of the above
F) All of the above

Exam 9: Application: International Trade

In a December 2007 New York Times column Paul Krugman argued in favor of

Correct Answer
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Correct Answer
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Domestic consumers w...
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Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. 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
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With trade, consumer surplus i...
View Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is

Correct Answer
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A tariff is a tax placed on

Correct Answer
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Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles,

Correct Answer
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Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Correct Answer
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Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, producer surplus in China is

Correct Answer
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The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Correct Answer
verified

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach, because the multilateral approach can reduce trade restrictions abroad as well as at home.

Correct Answer
verified

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good,

Correct Answer
verified

Figure 9-21 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 9-21. With free trade, domestic production and domestic consumption, respectively, are

Correct Answer
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Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Correct Answer
verified
Jumanji wi...
View Answer

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct Answer
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Figure 9-15 -Refer to Figure 9-15. With the tariff, the price paid and quantity demanded by domestic buyers are

Correct Answer
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Suppose the Ivory Coast, a small country, imports wheat at the world price of $4 per bushel. If the Ivory Coast imposes a tariff of $1 per bushel on imported wheat, then, other things equal, the price of wheat in Ivory Coast will increase, but by less than $1.

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

Correct Answer
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If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

Correct Answer
verified

Relative to a situation in which domestic firms do not compete with foreign firms, firms in countries that engage in free trade

Correct Answer
verified

Exam 9: Application: International Trade

In a December 2007 New York Times column Paul Krugman argued in favor of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedDomestic consumers w...View AnswerShow Answer

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. 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 i...View AnswerShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is

Correct AnswerverifiedShow Answer

A tariff is a tax placed on

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Correct AnswerverifiedShow Answer

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, producer surplus in China is

Correct AnswerverifiedShow Answer

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Correct AnswerverifiedShow Answer

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach, because the multilateral approach can reduce trade restrictions abroad as well as at home.

Correct AnswerverifiedShow Answer

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good,

Correct AnswerverifiedShow Answer

Figure 9-21 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 9-21. With free trade, domestic production and domestic consumption, respectively, are

Correct AnswerverifiedShow Answer

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Correct AnswerverifiedJumanji wi...View AnswerShow Answer

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. With the tariff, the price paid and quantity demanded by domestic buyers are

Correct AnswerverifiedShow Answer

Suppose the Ivory Coast, a small country, imports wheat at the world price of $4 per bushel. If the Ivory Coast imposes a tariff of $1 per bushel on imported wheat, then, other things equal, the price of wheat in Ivory Coast will increase, but by less than $1.

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

Correct AnswerverifiedShow Answer

If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

Correct AnswerverifiedShow Answer

Relative to a situation in which domestic firms do not compete with foreign firms, firms in countries that engage in free trade

Correct AnswerverifiedShow Answer

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Domestic consumers w...
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With trade, consumer surplus i...
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Jumanji wi...
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