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

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Jumanji wi...

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Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. -Refer to Figure 9-29. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus? -Refer to Figure 9-29. 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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When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,


A) this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade.
B) this is an indication that the nation has a comparative advantage in producing soybeans.
C) the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off.
D) All of the above are correct.

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

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Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we


A) know whether Costa Rica imports or exports pharmaceuticals.
B) compare the world price of pharmaceuticals to the price of pharmaceuticals that would prevail in Costa Rica if trade with the rest of the world were not allowed.
C) compare the quantity of pharmaceuticals consumed in Costa Rica with the quantity of pharmaceuticals that would be consumed in Costa Rica if trade with the rest of the world were not allowed.
D) All of the above are correct.

E) A) and D)
F) None of the above

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Trade raises the economic well-being of a nation in the sense that


A) the gains of the winners exceed the losses of the losers.
B) everyone in an economy gains from trade.
C) since countries can choose what products to trade, they will pick those products that are most beneficial to society.
D) the nation joins the international community when it begins to engage in trade.

E) None of the above
F) A) and D)

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When a nation first begins to trade with other countries and the nation becomes an importer of corn,


A) this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade.
B) this is an indication that the nation has a comparative advantage in producing corn.
C) the nation's consumers of corn become better off and the nation's producers of corn become worse off.
D) All of the above are correct.

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

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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. With trade, total surplus in the Guatemalan coffee market amounts to A) 1,250. B) 1,468. C) 1,870. D) 1,980. -Refer to Figure 9-1. With trade, total surplus in the Guatemalan coffee market amounts to


A) 1,250.
B) 1,468.
C) 1,870.
D) 1,980.

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

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Which of the following tools and concepts is useful in the analysis of international trade?


A) total surplus
B) domestic supply
C) equilibrium price
D) All of the above are correct.

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

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Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that


A) Spain imports olive oil.
B) the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed.
C) consumer surplus in Spain would exceed producer surplus in Spain if trade with other countries were not allowed.
D) All of the above are correct.

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

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Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests


A) Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar.
B) Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions.
C) Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar.
D) Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions.

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

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Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade allowed, this country A) exports 5 units of the good. B) imports 5 units of the good. C) exports 13 units of the good. D) imports 13 units of the good. -Refer to Figure 9-23. With free trade allowed, this country


A) exports 5 units of the good.
B) imports 5 units of the good.
C) exports 13 units of the good.
D) imports 13 units of the good.

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

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Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is Scenario 9-2 ā€¢ 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. ā€¢ 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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. where Scenario 9-2 ā€¢ 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. ā€¢ 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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. Scenario 9-2 ā€¢ 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. ā€¢ 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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is Scenario 9-2 ā€¢ 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. ā€¢ 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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. where Scenario 9-2 ā€¢ 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. ā€¢ 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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. Scenario 9-2 ā€¢ 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. ā€¢ 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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. 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, relative to the no-trade situation, international trade in cardboard


A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00.
B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50.
C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50.
D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00.

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

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Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 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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A country has a comparative advantage in a product if the world price is _______ than that country's domestic price without trade.

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Figure 9-9 Figure 9-9 -Refer to Figure 9-9. Producer surplus in this market before trade is A) A. B) A + B. C) B + C + D. D) C. -Refer to Figure 9-9. Producer surplus in this market before trade is


A) A.
B) A + B.
C) B + C + D.
D) C.

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

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Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?

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A unilateral approach is when a country ...

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Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil


A) will import almonds.
B) will export almonds.
C) will either import almonds or export almonds, but it is not clear from the given information.
D) would have nothing to gain either from exporting or importing almonds.

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

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Figure 9-17 Figure 9-17 -Refer to Figure 9-17. The deadweight loss caused by the tariff is A) $24. B) $72. C) $96. D) $144. -Refer to Figure 9-17. The deadweight loss caused by the tariff is


A) $24.
B) $72.
C) $96.
D) $144.

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

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


A) England has a comparative advantage over other countries and England will export wine.
B) England has a comparative advantage over other countries and England will import wine.
C) other countries have a comparative advantage over England and England will export wine.
D) other countries have a comparative advantage over England and England will import wine.

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

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