Question 1

Figure 9-3. The domestic country is China. 
-Refer to Figure 9-3. If China were to abandon a no-trade policy in favor of a free-trade policy,

Accepted Answer

A)   Chinese producers of pencil sharpeners would become worse off.
B)   Chinese consumers of pencil sharpeners would become better off.
C)   total surplus in the Chinese economy would increase.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 2

Figure 9-28
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is producer surplus?

Accepted Answer

With trade...

Question 3

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. With trade and a tariff, consumer surplus is

Accepted Answer

A)   $625 and producer surplus is $25.
B)   $625 and producer surplus is $225.
C)   $1,225 and producer surplus is $25.
D)   $1,225 and producer surplus is $225.E) All of the above
F) C) and D)

Question 4

Import quotas and tariffs produce similar results. Which of the following is not one of those results?

Accepted Answer

A)   The domestic price of the good increases.
B)   Consumer surplus of domestic consumers increases.
C)   Producer surplus of domestic producers increases.
D)   A deadweight loss is experienced by the domestic country.E) A) and D)
F) A) and B)

Question 5

In the market for apples in a certain country, consumer surplus increases and total surplus increases when that country

Accepted Answer

A)   abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of apples.
B)   abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of apples.
C)   abandons a free-trade policy, adopts a no-trade policy, and becomes an importer of apples.
D)   abandons a free-trade policy, adopts a no-trade policy, and becomes an exporter of apples.E) None of the above
F) A) and C)

Question 6

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Accepted Answer

A)   Moldova can only import goods; it cannot export goods.
B)   Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage.
C)   only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant.
D)   Moldova is a price taker.E) None of the above
F) B) and C)

Question 7

Figure 9-3. The domestic country is China. 
-Refer to Figure 9-3. With no international trade,

Accepted Answer

A)   the equilibrium price is $12 and the equilibrium quantity is 300.
B)   the equilibrium price is $16 and the equilibrium quantity is 200.
C)   the equilibrium price is $16 and the equilibrium quantity is 300.
D)   the equilibrium price is $16 and the equilibrium quantity is 450.E) A) and D)
F) C) and D)

Question 8

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The imposition of a tariff on roses

Accepted Answer

A)   increases the number of roses imported by 100.
B)   increases the number of roses imported by 200.
C)   decreases the number of roses imported by 200.
D)   decreases the number of roses imported by 400.E) None of the above
F) All of the above

Question 9

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is
$52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, the United States

Accepted Answer

A)   will become an importer of peaches.
B)   will become an exporter of peaches.
C)   may become either an importer or an exporter of peaches, but this cannot be determined.
D)   will experience increases in both consumer surplus and producer surplus.E) None of the above
F) A) and C)

Question 10

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Accepted Answer

A)   China and North Korea
B)   Chile and South Korea
C)   Russia and Japan
D)   the United States and MexicoE) C) and D)
F) B) and D)

Question 11

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?

Accepted Answer

Without trade, consu...

Question 12

How does an import quota differ from an equivalent tariff?

Accepted Answer

Both the import quota and the tariff rai...

Question 13

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

Accepted Answer

A) True 
 B)False

Question 14

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is
$52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, U.S. producers of peaches

Accepted Answer

A)   will be better off.
B)   will be worse off.
C)   will be unaffected.
D)   will experience a decrease in their collective producer surplus.E) A) and D)
F) B) and D)

Question 15

Figure 9-17 
-Refer to Figure 9-17. With free trade, consumer surplus is

Accepted Answer

A)   $400 and producer surplus is $200.
B)   $400 and producer surplus is $800.
C)   $1,600 and producer surplus is $200.
D)   $1,600 and producer surplus is $800.E) A) and C)
F) C) and D)

Question 16

NAFTA is an example of a multilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Question 17

When the nation of Worldova allows trade and becomes an exporter of silk,

Accepted Answer

A)   residents of Worldova who produce silk become worse off; residents of Worldova who buy silk become better off; and the economic well-being of Worldova rises.
B)   residents of Worldova who produce silk become worse off; residents of Worldova who buy silk become better off; and the economic well-being of Worldova falls.
C)   residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova rises.
D)   residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova falls.E) All of the above
F) None of the above

Question 18

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 19

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) All of the above
F) None of the above

Question 20

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. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $3, then the policy change results in a

Accepted Answer

A)   $15.00 decrease in producer surplus.
B)   $45.00 increase in consumer surplus.
C)   $20.00 increase in total surplus.
D)   $12.50 increase in total surplus.E) C) and D)
F) A) and D)

Exam 9: Application: International Trade

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. If China were to abandon a no-trade policy in favor of a free-trade policy,

Correct Answer
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In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Correct Answer
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Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, U.S. producers of peaches

Correct Answer
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Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. With trade and a tariff, consumer surplus is

Correct Answer
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Correct Answer
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Figure 9-17 -Refer to Figure 9-17. With free trade, consumer surplus is

Correct Answer
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NAFTA is an example of a multilateral approach to achieving free trade.

Correct Answer
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Import quotas and tariffs produce similar results. Which of the following is not one of those results?

Correct Answer
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Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is producer surplus?

Correct Answer
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With trade...
View 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 Answer
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Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With no international trade,

Correct Answer
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When the nation of Worldova allows trade and becomes an exporter of silk,

Correct Answer
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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The imposition of a tariff on roses

Correct Answer
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Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the United States

Correct Answer
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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. -Refer to Figure 9-27. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Correct Answer
verified
Without trade, consu...
View Answer

How does an import quota differ from an equivalent tariff?

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

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

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

In the market for apples in a certain country, consumer surplus increases and total surplus increases when that country

Correct Answer
verified

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. If China were to abandon a no-trade policy in favor of a free-trade policy,

Correct AnswerverifiedShow Answer

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Correct AnswerverifiedShow Answer

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, U.S. producers of peaches

Correct AnswerverifiedShow Answer

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. With trade and a tariff, consumer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. With free trade, consumer surplus is

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NAFTA is an example of a multilateral approach to achieving free trade.

Correct AnswerverifiedShow Answer

Import quotas and tariffs produce similar results. Which of the following is not one of those results?

Correct AnswerverifiedShow Answer

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is producer surplus?

Correct AnswerverifiedWith trade...View AnswerShow 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

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With no international trade,

Correct AnswerverifiedShow Answer

When the nation of Worldova allows trade and becomes an exporter of silk,

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The imposition of a tariff on roses

Correct AnswerverifiedShow Answer

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the United States

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedWithout trade, consu...View AnswerShow Answer

How does an import quota differ from an equivalent tariff?

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

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

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

In the market for apples in a certain country, consumer surplus increases and total surplus increases when that country

Correct AnswerverifiedShow Answer

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

Correct AnswerverifiedShow Answer

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With trade...
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Without trade, consu...
View Answer

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

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