Question 1

Figure 9-13
 
-Refer to Figure 9-13.The price and domestic quantity demanded after trade are

Accepted Answer

A)   $8 and 300.
B)   $8 and 900.
C)   $14 and 900.
D)   $14 and 600.E) B) and D)
F) A) and D)

Question 2

Figure 9-12
 
-Refer to Figure 9-12.Producer surplus before trade is

Accepted Answer

A)   $3,600.
B)   $4,600.
C)   $5,400.
D)   $6,250.E) B) and D)
F) A) and D)

Question 3

In September 2009,President Obama

Accepted Answer

A)   imposed a tariff on tires imported from China; in doing so, the president reneged on an agreement into which the U.S. had entered in 2001.
B)   imposed a tariff on tires imported from China; the tariff was in accordance with an agreement into which the U.S. had entered in 2001.
C)   removed a tariff on tires imported from China; the tariff had been imposed by President George W. Bush.
D)   removed a tariff on tires imported from China; the tariff had been imposed by President Bill Clinton.E) A) and D)
F) B) and C)

Question 4

The "unfair-competition" argument might be cited by an American who believes that

Accepted Answer

A)   almost every country has a comparative advantage, relative to the United States, in producing almost all goods.
B)   young industries should be protected against foreign competition until they become profitable.
C)   the American automobile industry should be protected against Japanese firms that are able to produce automobiles at relatively low cost.
D)   the French government's subsidies to French farmers justify restrictions on American imports of French agricultural products.E) A) and B)
F) None of the above

Question 5

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,then it will be an exporter of peaches if and only if the world price of peaches is

Accepted Answer

A)   above $2.
B)   below $4.
C)   above $4.
D)   below $7.E) B) and D)
F) B) and C)

Question 6

Figure 9-6
 
-Refer to Figure 9-6.The size of the tariff on carnations is

Accepted Answer

A)   $8 per dozen.
B)   $6 per dozen.
C)   $4 per dozen.
D)   $2 per dozen.E) A) and B)
F) B) and C)

Question 7

Figure 9-2
 
-Refer to Figure 9-2.With free trade,this country will

Accepted Answer

A)   import 40 baskets.
B)   import 70 baskets.
C)   export 35 baskets.
D)   export 65 baskets.E) All of the above
F) A) and B)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Suppose France subsidizes French wheat farmers,while Germany offers no subsidy to German wheat farmers.As a result of the French subsidy,sales of French wheat to Germany

Accepted Answer

A)   may prompt German farmers to invoke the unfair-competition argument.
B)   increase the consumer surplus of German buyers of wheat.
C)   increase the total surplus of the German people.
D)   All of the above are correct.E) B) and D)
F) B) and C) D

Question 10

Figure 9-17
 
-Refer to Figure 9-17.When the country moves from no trade to free trade,consumer surplus

Accepted Answer

A)   increases by $1,200 and producer surplus increases by $600.
B)   increases by $1,200 and producer surplus decreases by $600.
C)   decreases by $1,350 and producer surplus increases by $450.
D)   decreases by $1,350 and producer surplus decreases by $450.E) None of the above
F) A) and B)

Question 11

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

Question 12

Figure 9-2
 
-Refer to Figure 9-2.At the world price and with free trade,

Accepted Answer

A)   the domestic quantity of baskets demanded is greater than the domestic quantity of baskets supplied.
B)   the basket market is in equilibrium.
C)   the domestic demand for baskets is perfectly inelastic.
D)   both domestic producers of baskets and domestic consumers of baskets are better off than they were without free trade.E) All of the above
F) A) and B)

Question 13

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production.These taxes

Accepted Answer

A)   benefit the United States as a whole, because they generate revenue for the government. In addition, because the goods are priced below cost, the taxes do not harm domestic consumers.
B)   benefit the United States as a whole, because they generate revenue for the government and increase producer surplus.
C)   harm the United States as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue.
D)   harm the United States as a whole, because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue.E) C) and D)
F) A) and B)

Question 14

Suppose that Australia imposes a tariff on imported beef.If the increase in producer surplus is $100 million,the increase in tariff revenue is $200 million,and the reduction in consumer surplus is $500 million,the deadweight loss of the tariff is $300 million.

Accepted Answer

A) True 
 B)False

Question 15

The price of sugar that prevails in international markets is called the

Accepted Answer

A)   export price of sugar.
B)   import price of sugar.
C)   comparative-advantage price of sugar.
D)   world price of sugar.E) None of the above
F) C) and D)

Question 16

When a country allows international trade and becomes an importer of a good,domestic producers of the good are better off,and domestic consumers of the good are worse off.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)   assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries.
B)   assuming there is no demand for that country's domestically-produced goods by other countries.
C)   assuming international trade can benefit producers, but not consumers, in that country.
D)   making an assumption that is not necessary to analyze the gains and losses from international trade.E) A) and D)
F) All of the above D

Question 18

When a country allows trade and becomes an importer of a good,

Accepted Answer

A)   consumer surplus and producer surplus both increase.
B)   consumer surplus and producer surplus both decrease.
C)   consumer surplus increases and producer surplus decreases.
D)   consumer surplus decreases and producer surplus increases.E) C) and D)
F) None of the above

Question 19

Congressman Smith cites the "jobs argument" when he argues in favor of restrictions on trade; he argues that everything can be produced at lower cost in other countries.The likely flaw in Congressman Smith's reasoning is that he ignores the fact that

Accepted Answer

A)   there is no evidence that any worker ever lost his or her job because of free trade.
B)   unemployment of labor is not a serious problem relative to other economic problems.
C)   the gains from trade are based on comparative advantage.
D)   the gains from trade are based on absolute advantage.E) B) and C)
F) A) and D) C

Question 20

If a small country imposes a tariff on an imported good,domestic sellers will gain producer surplus,the government will gain tariff revenue,and domestic consumers will gain consumer surplus.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade.

Figure 9-13 -Refer to Figure 9-13.The price and domestic quantity demanded after trade are

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12.Producer surplus before trade is

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In September 2009,President Obama

Correct AnswerverifiedShow Answer

The "unfair-competition" argument might be cited by an American who believes that

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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,then it will be an exporter of peaches if and only if the world price of peaches is

Correct AnswerverifiedShow Answer

Figure 9-6 -Refer to Figure 9-6.The size of the tariff on carnations is

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Figure 9-2 -Refer to Figure 9-2.With free trade,this country will

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

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Suppose France subsidizes French wheat farmers,while Germany offers no subsidy to German wheat farmers.As a result of the French subsidy,sales of French wheat to Germany

Correct AnswerverifiedD

Figure 9-17 -Refer to Figure 9-17.When the country moves from no trade to free trade,consumer surplus

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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?

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Figure 9-2 -Refer to Figure 9-2.At the world price and with free trade,

Correct AnswerverifiedShow Answer

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production.These taxes

Correct AnswerverifiedShow Answer

Suppose that Australia imposes a tariff on imported beef.If the increase in producer surplus is $100 million,the increase in tariff revenue is $200 million,and the reduction in consumer surplus is $500 million,the deadweight loss of the tariff is $300 million.

Correct AnswerverifiedShow Answer

The price of sugar that prevails in international markets is called the

Correct AnswerverifiedShow Answer

When a country allows international trade and becomes an importer of a good,domestic producers of the good are better off,and domestic consumers of the good are worse off.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedD

When a country allows trade and becomes an importer of a good,

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Congressman Smith cites the "jobs argument" when he argues in favor of restrictions on trade; he argues that everything can be produced at lower cost in other countries.The likely flaw in Congressman Smith's reasoning is that he ignores the fact that

Correct AnswerverifiedC

If a small country imposes a tariff on an imported good,domestic sellers will gain producer surplus,the government will gain tariff revenue,and domestic consumers will gain consumer surplus.

Correct AnswerverifiedShow Answer

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D

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D

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C

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