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Exam 9: Application: International Trade

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Question 31

Multiple Choice

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What percent of total world trade do World Trade Organization countries make up

A) 58
B) 72
C) 89
D) 97

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

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Question 32

Multiple Choice

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When two countries choose to engage in international trade,who benefits

A) Both countries benefit.
B) One country benefits while the other country loses.
C) Since it is an exchange, neither country benefits nor loses.
D) Only the larger country benefits.

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

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Question 33

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Suppose the domestic supply and demand for leather boots in Canada are given by the following equations: Q_S = 25 + 10P Q_D = 925 - 5P a.In the absence of international trade in leather boots,what will the domestic price be b.In the absence of international trade in leather boots,what will the domestic quantity be c.If Canada could trade leather boots freely with the rest of the world at the price of $90,how many leather boots will be produced in Canada d.If Canada could trade leather boots freely with the rest of the world at the price of $90,how many leather boots will be purchased in Canada e.If Canada trades leather boots freely with the rest of the world at a price of $90,does Canada import or export leather boots How many f.In the absence of trade,what is the consumer surplus and producer surplus in Canada for the market for leather boots g.If Canada could trade leather boots freely with the rest of the world at the price of $90,what is the consumer surplus and producer surplus in Canada in the market for leather boots h.What is the change in total surplus after the opening of free trade?

Figure 9-9 -Refer to Figure 9-9.What is consumer surplus in this market after trade

Figure 9-12 -Refer to Figure 9-12.What would producer surplus be with free trade

What is the effect of a tariff on the market price

Figure 9-2 -Refer to Figure 9-2.What is producer surplus in China after trade

If the domestic price of a good is low relative to the world price,the country has a comparative advantage in producing that good.

Critics of free trade sometimes argue that allowing imports from foreign countries costs jobs domestically.What would an economist argue

Figure 9-4 -Refer to Figure 9-4.What is producer surplus in this market after trade

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Figure 9-8 -Figure 9-8 shows the domestic market for solar panels in Germany.What is the quantity of solar panels imported into Germany

Figure 9-2 -Refer to Figure 9-2.What is the increase in total surplus in China because of trade

Figure 9-9 -Refer to Figure 9-9.What is producer surplus plus consumer surplus in this market before trade

Which of the following is NOT an outcome that arises from both import quotas and tariffs

Most economists support the infant-industry argument because it is so easy to implement in practice.

Figure 9-9 -Refer to Figure 9-9.What is producer surplus in this market before trade

Figure 9-4 -Refer to Figure 9-4.What is total surplus in this market after trade

Figure 9-12 -Refer to Figure 9-12.What is the free trade price and domestic quantity demanded

Why is trade beneficial