Question 1

Figure 9-17 
-Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to

Accepted Answer

A)   $400.
B)   $600.
C)   $750.
D)   $1,000.E) All of the above
F) C) and D)

Question 2

If the demand curve and the supply curve for a good are straight lines, then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

Accepted Answer

A)   the area of one triangle.
B)   the area of one rectangle.
C)   the combined areas of two different triangles.
D)   the combined areas of two different rectangles.E) A) and B)
F) B) and D)

Question 3

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, the domestic price and domestic quantity demanded are

Accepted Answer

A)   $30 and 1,200.
B)   $40 and 800.
C)   $30 and 800.
D)   $40 and 1,600.E) A) and B)
F) All of the above

Question 4

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. 
-Refer to Figure 9-8. The price corresponding to the horizontal dotted line on the graph represents the price of cars

Accepted Answer

A)   after trade is allowed.
B)   before trade is allowed.
C)   that maximizes total surplus when trade is allowed.
D)   that minimizes the well-being of domestic car producers when trade is allowed.E) A) and B)
F) A) and C)

Question 5

Using the graph below, answer the following questions about hammers.  
a. What is the equilibrium price of hammers before trade?
b. What is the equilibrium quantity of hammers before trade?
c. What is the price of hammers after trade is allowed?
d. What is the quantity of hammers imported after trade is allowed?
e. What is the amount of consumer surplus before trade?
f. What is the amount of consumer surplus after trade?
g. What is the amount of producer surplus before trade?
h. What is the amount of producer surplus after trade?
i. What is the amount of total surplus before trade?
j. What is the amount of total surplus after trade?
k. What is the change in total surplus because of trade?

Accepted Answer

a. $14
b. 90
c. $10
...

Question 6

Figure 9-15 
-Refer to Figure 9-15. Producer surplus with trade and without a tariff is

Accepted Answer

A)   G.
B)   C + G.
C)   A + C + G.
D)   A + B + C + G.E) None of the above
F) A) and B)

Question 7

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Accepted Answer

A) True 
 B)False

Question 8

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 $3, then

Accepted Answer

A)   Isoland has a comparative advantage, relative to other countries, in producing peaches.
B)   Isoland will export peaches.
C)   producer surplus with trade exceeds producer surplus without trade.
D)   consumer surplus with trade exceeds consumer surplus without trade.E) C) and D)
F) B) and D)

Question 9

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

Accepted Answer

A)   A.
B)   A + B.
C)   A + B + D.
D)   C.E) B) and D)
F) All of the above

Question 10

Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests

Accepted Answer

A)   Russia has a comparative advantage over Brazil in producing coffee, and Ireland has a comparative advantage over Russia in producing sunflower seeds.
B)   Russia has a comparative advantage over Ireland in producing sunflower seeds, and Brazil has a comparative advantage over Russia in producing coffee.
C)   Russia has an absolute advantage over Ireland in producing sunflower seeds, and Brazil has an absolute advantage over Russia in producing coffee.
D)   Russia has an absolute advantage over Brazil in producing coffee, and Ireland has an absolute advantage over Russia in producing sunflower seeds.E) A) and D)
F) A) and C)

Question 11

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Accepted Answer

A)   consumer surplus equals producer surplus in the Canadian soybean market.
B)   total surplus exceeds consumer surplus in the Canadian soybean market.
C)   Canada permits international trade in soybeans.
D)   Canada forbids international trade in soybeans.E) B) and C)
F) All of the above

Question 12

If Honduras were to subsidize the production of wool blankets and sell them in Sweden at artificially low prices, the Swedish economy would be worse off.

Accepted Answer

A) True 
 B)False

Question 13

When a country that imports a particular good imposes an import quota on that 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) All of the above

Question 14

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 15

Figure 9-12 
-Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

Accepted Answer

A)   $54 and 800.
B)   $54 and 1,600.
C)   $42 and 800.
D)   $42 and 1,200.E) B) and D)
F) None of the above

Question 16

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) C) and D)
F) None of the above

Question 17

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

Accepted Answer

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 D)
F) A) and C)

Question 18

Figure 9-4. The domestic country is Nicaragua. 
-Refer to Figure 9-4. With trade, Nicaragua

Accepted Answer

A)   imports 150 calculators.
B)   imports 250 calculators.
C)   exports 100 calculators.
D)   exports 250 calculators.E) A) and C)
F) A) and B)

Question 19

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Accepted Answer

A) True 
 B)False

Question 20

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

When a country that imports a particular good imposes an import quota on that good,

Correct Answer
verified

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

Correct Answer
verified

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. With trade, Nicaragua

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

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. $14
b. 90
c. $10
...
View Answer

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

Correct Answer
verified

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. The price corresponding to the horizontal dotted line on the graph represents the price of cars

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, the domestic price and domestic quantity demanded are

Correct Answer
verified

If the demand curve and the supply curve for a good are straight lines, then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

Correct Answer
verified

Figure 9-12 -Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. Producer surplus with trade and without a tariff is

Correct Answer
verified

Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests

Correct Answer
verified

If Honduras were to subsidize the production of wool blankets and sell them in Sweden at artificially low prices, the Swedish economy would be worse off.

Correct Answer
verified

Figure 9-17 -Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to

Correct Answer
verified

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Correct Answer
verified

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Correct Answer
verified

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 $3, then

Correct Answer
verified

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Correct Answer
verified

Exam 9: Application: International Trade

When a country that imports a particular good imposes an import quota on that good,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. With trade, Nicaragua

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

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverifieda. $14b. 90c. $10...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. The price corresponding to the horizontal dotted line on the graph represents the price of cars

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, the domestic price and domestic quantity demanded are

Correct AnswerverifiedShow Answer

If the demand curve and the supply curve for a good are straight lines, then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. Producer surplus with trade and without a tariff is

Correct AnswerverifiedShow Answer

Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests

Correct AnswerverifiedShow Answer

If Honduras were to subsidize the production of wool blankets and sell them in Sweden at artificially low prices, the Swedish economy would be worse off.

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to

Correct AnswerverifiedShow Answer

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Correct AnswerverifiedShow Answer

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Correct AnswerverifiedShow Answer

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 $3, then

Correct AnswerverifiedShow Answer

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. $14
b. 90
c. $10
...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified