Question 1

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

Accepted Answer

A)   if it works consumer surplus will decline.
B)   if it works producer surplus falls.
C)   if it fails the country faces a choice between two bad options.
D)   if it fails total surplus will increase.E) B) and D)
F) B) and C)

Question 2

Figure 9-6
 
-Refer to Figure 9-6.Before the tariff is imposed,this country

Accepted Answer

A)   imports 200 carnations.
B)   imports 400 carnations.
C)   exports 200 carnations.
D)   exports 400 carnations.E) A) and B)
F) None of the above

Question 3

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

Accepted Answer

A)   everyone in the country benefits.
B)   the gains of the winners exceed the losses of the losers.
C)   the losses of the losers exceed the gains of the winners.
D)   everyone in the country loses.E) B) and D)
F) A) and B)

Question 4

Figure 9-17
 
-Refer to Figure 9-17.The deadweight loss caused by the tariff is

Accepted Answer

A)   $24.
B)   $72.
C)   $96.
D)   $144.E) None of the above
F) All of the above

Question 5

Figure 9-1
The figure illustrates the market for wool in Scotland.
 
-Refer to Figure 9-1.With trade,total surplus in the Scotland wool market amounts to

Accepted Answer

A)   312.5.
B)   367.0.
C)   467.5.
D)   495.0.E) A) and B)
F) A) and C)

Question 6

Figure 9-1
The figure illustrates the market for wool in Scotland.
 
-Refer to Figure 9-1.From the figure it is apparent that

Accepted Answer

A)   Scotland will experience a shortage of wool if trade is not allowed.
B)   Scotland will experience a surplus of wool if trade is not allowed.
C)   Scotland has a comparative advantage in producing wool, relative to the rest of the world.
D)   foreign countries have a comparative advantage in producing wool, relative to Scotland.E) A) and D)
F) All of the above

Question 7

William and Jamal live in the country of Dumexia.When Dumexia legalized international trade in bananas,the price of bananas in Dumexia increased.As a result,William became better off and Jamal became worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Accepted Answer

A) True 
 B)False

Question 8

Figure 9-1
The figure illustrates the market for wool in Scotland.
 
-Refer to Figure 9-1.When trade is allowed,

Accepted Answer

A)   Scotland producers of wool become better off and Scotland consumers of wool become worse off.
B)   Scotland consumers of wool become better off and Scotland producers of wool become worse off.
C)   both Scotland producers and consumers of wool become better off.
D)   both Scotland producers and consumers of wool become worse off.E) A) and B)
F) A) and C)

Question 9

Figure 9-20
The figure illustrates the market for rice in Vietnam.
 
-Refer to Figure 9-20.With trade,Vietnamese rice producers will produce

Accepted Answer

A)   2,000 units of rice and their producer surplus will be 4,000.
B)   2,000 units of rice and their producer surplus will be 7,500.
C)   3,000 units of rice and their producer surplus will be 7,500.
D)   3,000 units of rice and their producer surplus will be 9,000.E) A) and B)
F) C) and D)

Question 10

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter of a particular good,

Accepted Answer

A)   consumer surplus increases and total surplus increases in the market for that good.
B)   consumer surplus increases and total surplus decreases in the market for that good.
C)   consumer surplus decreases and total surplus increases in the market for that good.
D)   consumer surplus decreases and total surplus decreases in the market for that good.E) B) and C)
F) A) and D)

Question 11

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Accepted Answer

A)   consumer surplus increases and total surplus increases in the market for that good.
B)   consumer surplus increases and total surplus decreases in the market for that good.
C)   consumer surplus decreases and total surplus increases in the market for that good.
D)   consumer surplus decreases and total surplus decreases in the market for that good.E) None of the above
F) A) and B)

Question 12

By comparing the world price of horseradish to Cropland's domestic price of horseradish,we can determine whether Cropland

Accepted Answer

A)   will export horseradish (assuming trade is allowed) .
B)   will import horseradish (assuming trade is allowed) .
C)   has a comparative advantage in producing horseradish.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 13

Figure 9-7. The figure applies to the nation of Wales and the good is cheese.
 
-Refer to Figure 9-7.With trade,Wales

Accepted Answer

A)   imports Q2 - Q1 units of cheese.
B)   exports Q2 - Q1 units of cheese.
C)   imports Q2 - Q0 units of cheese.
D)   exports Q2 - Q0 units of cheese.E) A) and D)
F) C) and D)

Question 14

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

Accepted Answer

A)   the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good.
B)   the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good.
C)   the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good.
D)   the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good.E) A) and C)
F) B) and C)

Question 15

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

Question 16

If Freedonia changes its laws to allow international trade in software and the world price is lower 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) B) and D)
F) All of the above

Question 17

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

Accepted Answer

A)   both domestic producers and domestic consumers become better off.
B)   domestic producers become better off, and domestic consumers become worse off.
C)   domestic producers become worse off, and domestic consumers become better off.
D)   both domestic producers and domestic consumers become worse off.E) A) and B)
F) B) and C)

Question 18

A major difference between tariffs and import quotas is that

Accepted Answer

A)   tariffs create deadweight losses, but import quotas do not.
B)   tariffs help domestic consumers, and import quotas help domestic producers.
C)   tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 19

When the nation of Duxembourg allows trade and becomes an importer of software,

Accepted Answer

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

Question 20

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

Accepted Answer

A)   $7,000.
B)   $7,500.
C)   $8,800.
D)   $9,600.E) None of the above
F) A) and B)

Exam 9: Application: International Trade.

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

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Figure 9-6 -Refer to Figure 9-6.Before the tariff is imposed,this country

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By comparing the world price of horseradish to Cropland's domestic price of horseradish,we can determine whether Cropland

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Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.When trade is allowed,

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When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter of a particular good,

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Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.With trade,total surplus in the Scotland wool market amounts to

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Figure 9-17 -Refer to Figure 9-17.The deadweight loss caused by the tariff is

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The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

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

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Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.From the figure it is apparent that

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

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When the nation of Duxembourg allows trade and becomes an importer of software,

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When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

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William and Jamal live in the country of Dumexia.When Dumexia legalized international trade in bananas,the price of bananas in Dumexia increased.As a result,William became better off and Jamal became worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

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

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If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price,then it must be the case that

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

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Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.With trade,Vietnamese rice producers will produce

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A major difference between tariffs and import quotas is that

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Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.With trade,Wales

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