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

Question 2

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

Accepted Answer

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) A) and B)

Question 3

When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Accepted Answer

A)   cannot experience significant gains or losses by trading with other countries.
B)   cannot have a significant comparative advantage over other countries.
C)   cannot affect world prices by trading with other countries.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 4

Figure 9-4.The domestic country is Nicaragua. 
-Refer to Figure 9-4.The change in total surplus in Nicaragua because of trade is

Accepted Answer

A)   $625,and this is an increase in total surplus.
B)   $750,and this is an increase in total surplus.
C)   $625,and this is a decrease in total surplus.
D)   $750,and this is a decrease in total surplus.E) All of the above
F) B) and C)

Question 5

When a country takes a multilateral approach to free trade,it

Accepted Answer

A)   removes trade restrictions on its own.
B)   reduces its trade restrictions while other countries do the same.
C)   does not remove trade restrictions no matter what other countries do.
D)   is willing to trade with multiple countries at once.E) B) and C)
F) All of the above

Question 6

Assume the nation of Cropland does not trade with the rest of the world.By comparing the world price of corn to the price of corn in Cropland,we can determine whether

Accepted Answer

A)   consumer surplus exceeds producer surplus in Cropland.
B)   Cropland has an absolute advantage in producing corn.
C)   Cropland has a comparative advantage in producing corn.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 7

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

Question 8

Figure 9-14.On the diagram below,Q represents the quantity of crude oil and P represents the price of crude oil. 
-Refer to Figure 9-14.A result of this country allowing international trade in crude oil is as follows:

Accepted Answer

A)   The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel.
B)   The effect on the well-being of domestic crude-oil consumers is unclear in that they now buy more crude oil,but at a higher price per barrel.
C)   The effect on the well-being of the country is unclear in that domestic producer surplus increases,while the effect on domestic consumer surplus is unclear.
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 9

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

Question 10

The nation of Spritzland used to prohibit international trade,but now trade is allowed,and Spritzland is exporting wristwatches.Relative to the previous no-trade situation,total surplus in the market for wristwatches in Spritzland has increased.

Accepted Answer

A) True 
 B)False

Question 11

Turkey is an importer of wheat.The world price of a bushel of wheat is $7.Turkey imposes a $3-per-bushel tariff on wheat.Turkey is a price-taker in the wheat market.As a result of the tariff,

Accepted Answer

A)   Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off.
B)   Turkish consumers of wheat become worse off and Turkish producers of wheat become better off.
C)   Turkish consumers of wheat become better off and Turkish producers of wheat become worse off.
D)   Turkish consumers of wheat become better off and Turkish producers of wheat become better off.E) B) and C)
F) None of the above

Question 12

Assume,for the U.S. ,that the domestic price of pineapples without international trade is lower than the world price of pineapples.This suggests that,in the production of pineapples,

Accepted Answer

A)   the U.S.has a comparative advantage over other countries and the U.S.will export pineapples.
B)   the U.S.has a comparative advantage over other countries and the U.S.will import pineapples.
C)   other countries have a comparative advantage over the U.S.and the U.S.will export pineapples.
D)   other countries have a comparative advantage over the U.S.and the U.S.will import pineapples.E) B) and D)
F) A) and D)

Question 13

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 country for which the figure is drawn

Accepted Answer

A)   has a comparative advantage relative to other countries in the production of cars and it will export cars.
B)   has a comparative advantage relative to other countries in the production of cars and it will import cars.
C)   has a comparative disadvantage relative to other countries in the production of cars and it will export cars.
D)   has a comparative disadvantage relative to other countries in the production of cars and it will import cars.E) A) and B)
F) C) and D)

Question 14

Without free trade,the domestic price of a good must be equal to the world price of a good.

Accepted Answer

A) True 
 B)False

Question 15

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

Question 16

Figure 9-6 
-Refer to Figure 9-6.With trade and without a tariff,

Accepted Answer

A)   the domestic price is equal to the world price.
B)   carnations are sold at $8 in this market.
C)   there is a shortage of 400 carnations in this market.
D)   this country imports 200 carnations.E) None of the above
F) All of the above

Question 17

President Bush imposed temporary tariffs on imported steel in 2002.The reasons for this trade restriction is most consistent with the

Accepted Answer

A)   national-security argument.
B)   infant-industry argument.
C)   unfair competition argument.
D)   protection-as-a-bargaining chip-argument.E) C) and D)
F) All of the above

Question 18

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?

Accepted Answer

Jumanji wi...

Question 19

Scenario 9-1
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-1.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?

Accepted Answer

The deadwe...

Question 20

Chile is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Chile imposes a $7 tariff on chips.Which of the following outcomes is possible?

Accepted Answer

A)   The price of chips in Chile increases to $19;the quantity of Chilean-produced chips decreases;and the quantity of chips imported by Chile decreases.
B)   The price of chips in Chile increases to $16;the quantity of Chilean-produced chips increases;and the quantity of chips imported by Chile decreases.
C)   The price of chips in Chile increases to $19;the quantity of Chilean-produced chips increases;and the quantity of chips imported by Chile decreases.
D)   The price of chips in Chile increases to $16;the quantity of Chilean-produced chips increases;and the quantity of chips imported by Chile does not change.E) All of the above
F) A) and B)

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
verified

Assume,for the U.S. ,that the domestic price of pineapples without international trade is lower than the world price of pineapples.This suggests that,in the production of pineapples,

Correct Answer
verified

The nation of Spritzland used to prohibit international trade,but now trade is allowed,and Spritzland is exporting wristwatches.Relative to the previous no-trade situation,total surplus in the market for wristwatches in Spritzland has increased.

Correct Answer
verified

Figure 9-14.On the diagram below,Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14.A result of this country allowing international trade in crude oil is as follows:

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 country for which the figure is drawn

Correct Answer
verified

Figure 9-4.The domestic country is Nicaragua. -Refer to Figure 9-4.The change in total surplus in Nicaragua because of trade is

Correct Answer
verified

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

Correct Answer
verified

When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Correct Answer
verified

Correct Answer
verified
The deadwe...
View Answer

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?

Correct Answer
verified
Jumanji wi...
View Answer

Figure 9-6 -Refer to Figure 9-6.With trade and without a tariff,

Correct Answer
verified

Turkey is an importer of wheat.The world price of a bushel of wheat is $7.Turkey imposes a $3-per-bushel tariff on wheat.Turkey is a price-taker in the wheat market.As a result of the tariff,

Correct Answer
verified

When a country takes a multilateral approach to free trade,it

Correct Answer
verified

Assume the nation of Cropland does not trade with the rest of the world.By comparing the world price of corn to the price of corn in Cropland,we can determine whether

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

Chile is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Chile imposes a $7 tariff on chips.Which of the following outcomes is possible?

Correct Answer
verified

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

Correct Answer
verified

Without free trade,the domestic price of a good must be equal to the world price of a good.

Correct Answer
verified

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

Correct Answer
verified

President Bush imposed temporary tariffs on imported steel in 2002.The reasons for this trade restriction is most consistent with the

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

Assume,for the U.S. ,that the domestic price of pineapples without international trade is lower than the world price of pineapples.This suggests that,in the production of pineapples,

Correct AnswerverifiedShow Answer

The nation of Spritzland used to prohibit international trade,but now trade is allowed,and Spritzland is exporting wristwatches.Relative to the previous no-trade situation,total surplus in the market for wristwatches in Spritzland has increased.

Correct AnswerverifiedShow Answer

Figure 9-14.On the diagram below,Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14.A result of this country allowing international trade in crude oil is as follows:

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 country for which the figure is drawn

Correct AnswerverifiedShow Answer

Figure 9-4.The domestic country is Nicaragua. -Refer to Figure 9-4.The change in total surplus in Nicaragua because of trade is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe deadwe...View AnswerShow Answer

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?

Correct AnswerverifiedJumanji wi...View AnswerShow Answer

Figure 9-6 -Refer to Figure 9-6.With trade and without a tariff,

Correct AnswerverifiedShow Answer

Turkey is an importer of wheat.The world price of a bushel of wheat is $7.Turkey imposes a $3-per-bushel tariff on wheat.Turkey is a price-taker in the wheat market.As a result of the tariff,

Correct AnswerverifiedShow Answer

When a country takes a multilateral approach to free trade,it

Correct AnswerverifiedShow Answer

Assume the nation of Cropland does not trade with the rest of the world.By comparing the world price of corn to the price of corn in Cropland,we can determine whether

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

Chile is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Chile imposes a $7 tariff on chips.Which of the following outcomes is possible?

Correct AnswerverifiedShow 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

Without free trade,the domestic price of a good must be equal to the world price of a good.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

President Bush imposed temporary tariffs on imported steel in 2002.The reasons for this trade restriction is most consistent with the

Correct AnswerverifiedShow Answer

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The deadwe...
View Answer

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Jumanji wi...
View Answer

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