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Figure 9-17 Figure 9-17 -Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to A) $400. B) $600. C) $750. D) $1,000. -Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to


A) $400.
B) $600.
C) $750.
D) $1,000.

E) A) and B)
F) A) and C)

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Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

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Nash will ...

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Several arguments for restricting trade have been advanced. Those arguments do not include


A) the jobs argument.
B) the protection-as-a-bargaining-chip argument.
C) the no-deadweight-loss argument.
D) the infant-industry argument.

E) None of the above
F) B) and C)

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Figure 9-13 Figure 9-13 -Refer to Figure 9-13. The price and domestic quantity demanded after trade are A) $8 and 300. B) $8 and 900. C) $14 and 900. D) $14 and 600. -Refer to Figure 9-13. The price and domestic quantity demanded after trade are


A) $8 and 300.
B) $8 and 900.
C) $14 and 900.
D) $14 and 600.

E) C) and D)
F) B) and D)

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When markets open up to international trade, we know that consumer surplus will rise.​

A) True
B) False

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Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus? -Refer to Figure 9-27. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

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Without trade, consu...

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Figure 9-10. The figure applies to Mexico and the good is rifles. Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. Mexico's gains from trade are represented by the area that is bounded by the points A) (0, P<sub>0</sub>) , (Q<sub>0</sub>, P<sub>0</sub>) , (Q<sub>2</sub>, P<sub>1</sub>) , and (0, P<sub>1</sub>) . B) (0, P<sub>1</sub>) , (0, P<sub>2</sub>) , (Q<sub>0</sub>, P<sub>0</sub>) , and (Q<sub>1</sub>, P<sub>1</sub>) . C) (Q<sub>0</sub>, P<sub>0</sub>) , (Q<sub>2</sub>, P<sub>1</sub>) , and (Q<sub>1</sub>, P<sub>1</sub>) . D) (0, P<sub>0</sub>) , (0, P<sub>2</sub>) , and (Q<sub>0</sub>, P<sub>0</sub>) . -Refer to Figure 9-10. Mexico's gains from trade are represented by the area that is bounded by the points


A) (0, P0) , (Q0, P0) , (Q2, P1) , and (0, P1) .
B) (0, P1) , (0, P2) , (Q0, P0) , and (Q1, P1) .
C) (Q0, P0) , (Q2, P1) , and (Q1, P1) .
D) (0, P0) , (0, P2) , and (Q0, P0) .

E) A) and C)
F) All of the above

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​Imposing a tariff on the import of a good is preferable to a quota because a tariff produces revenue for the government, while a quota never produces any revenue for a government.

A) True
B) False

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Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is 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 $60. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. , where 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 $60. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. represents the domestic quantity of cardboard demanded, in tons, and 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 $60. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is 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 $60. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. , where 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 $60. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. represents the domestic quantity of cardboard supplied, in tons, and 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 $60. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $60. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,


A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off.
B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.
C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.

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

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Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: 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, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much is the deadweight loss caused by the tariff? -Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much is the deadweight loss caused by the tariff?

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The deadwe...

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Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. -Refer to Figure 9-18. If Isoland allows international trade and if the world price of peaches is $5, then A) Isoland has a comparative advantage, relative to other countries, in producing peaches. B) Isoland will import peaches. C) consumer surplus with trade exceeds consumer surplus without trade. D) All of the above are correct. -Refer to Figure 9-18. If Isoland allows international trade and if the world price of peaches is $5, then


A) Isoland has a comparative advantage, relative to other countries, in producing peaches.
B) Isoland will import peaches.
C) consumer surplus with trade exceeds consumer surplus without trade.
D) All of the above are correct.

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

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When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off.

A) True
B) False

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Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

A) True
B) False

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The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

A) True
B) False

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If Freedonia changes its laws to allow international trade in software and the world price is higher than its domestic price, then it must be the case that


A) both consumer surplus and producer surplus increase.
B) consumer surplus increases and producer surplus decreases.
C) consumer surplus decreases and producer surplus increases.
D) both consumer surplus and producer surplus decrease.

E) All of the above
F) None of the above

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A tariff on a product makes


A) domestic sellers better off and domestic buyers worse off.
B) domestic sellers worse off and domestic buyers worse off.
C) domestic sellers better off and domestic buyers better off.
D) domestic sellers worse off and domestic buyers better off.

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

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Both tariffs and import quotas


A) increase the quantity of imports and raise the domestic price of the good.
B) increase the quantity of imports and lower the domestic price of the good.
C) decrease the quantity of imports and raise the domestic price of the good.
D) decrease the quantity of imports and lower the domestic price of the good.

E) A) and C)
F) B) and D)

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Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

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Brazil wil...

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Figure 9-1 The figure illustrates the market for coffee in Guatemala. Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. Relative to the no-trade situation, trade with the rest of the world results in A) Guatemalan consumers paying a higher price for coffee. B) a decrease in producer surplus in Guatemala. C) a decrease in total surplus in Guatemala. D) All of the above are correct. -Refer to Figure 9-1. Relative to the no-trade situation, trade with the rest of the world results in


A) Guatemalan consumers paying a higher price for coffee.
B) a decrease in producer surplus in Guatemala.
C) a decrease in total surplus in Guatemala.
D) All of the above are correct.

E) All of the above
F) A) and C)

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Figure 9-7. The figure applies to the nation of Wales and the good is cheese. Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. The equilibrium price and the equilibrium quantity of cheese in Wales before trade are A) P<sub>1</sub> and Q<sub>2.</sub> B) P<sub>1</sub> and Q<sub>1</sub>. C) P<sub>0</sub> and Q<sub>0</sub>. D) P<sub>0</sub> and Q<sub>1</sub>. -Refer to Figure 9-7. The equilibrium price and the equilibrium quantity of cheese in Wales before trade are


A) P1 and Q2.
B) P1 and Q1.
C) P0 and Q0.
D) P0 and Q1.

E) B) and D)
F) B) and C)

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