Question 1

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

Accepted Answer

A) True 
 B)False

Question 2

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, the

Accepted Answer

A)  price paid by American consumers of peaches is unchanged relative to the no-trade situation.
B)  total well-being of American producers of peaches is diminished relative to the no-trade situation.
C)  total well-being of American consumers of peaches is enhanced relative to the no-trade situation.
D)  total well-being of the United States is enhanced relative to the no-trade situation.E) B) and D)
F) None of the above

Question 3

Figure 9-15 
-Refer to Figure 9-15. For the saddle market, area B represents

Accepted Answer

A)  government's revenue from the tariff.
B)  the deadweight loss of the tariff.
C)  the increase in producer surplus, relative to the free-trade situation, as a result of the tariff.
D)  None of the above is correct.E) A) and B)
F) All of the above

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Accepted Answer

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

Question 8

In a December 2007 New York Times column Paul Krugman argued in favor of

Accepted Answer

A)  protectionism based on the national-security argument.
B)  protectionism based on the infant-industry argument.
C)  protectionism based on the unfair-competition argument.
D)  keeping world markets relatively open.E) C) and D)
F) B) and C)

Question 9

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

Accepted Answer

A)  total surplus
B)  domestic supply
C)  equilibrium price
D)  All of the above are correct.E) All of the above
F) None of the above

Question 10

Scenario 9-2
For a small country called Boxland, the equation of the domestic demand curve for cardboard is

QD=200−2PQ ^ { D } = 200 - 2 PQD=200−2P  ,
where  QDQ ^ { D }QD  represents the domestic quantity of cardboard demanded, in tons, and  PPP  represents the price of a ton of cardboard.For Boxland, the equation of the domestic supply curve for cardboard is

QS=−60+3PQ ^ { S } = - 60 + 3 PQS=−60+3P  ,
where  QsQ ^ { s }Qs  represents the domestic quantity of cardboard supplied, in tons, and  PPP  again represents the price of a ton of cardboard.
-Refer to Scenario 9-2. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is

Accepted Answer

A)  $36 and the equilibrium quantity of cardboard is 74 tons.
B)  $44 and the equilibrium quantity of cardboard is 88 tons.
C)  $52 and the equilibrium quantity of cardboard is 96 tons.
D)  $60 and the equilibrium quantity of cardboard is 100 tons. E) A) and B)
F) A) and C)

Question 11

Patterns of trade among nations are primarily determined by

Accepted Answer

A)  cultural considerations.
B)  political considerations.
C)  comparative advantage.
D)  differences in the income elasticity of demand among nations.E) A) and D)
F) None of the above

Question 12

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Accepted Answer

A)  better off, its producers of fish will become better off, and on balance the citizens of Denmark will become better off.
B)  worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off
C)  worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off.
D)  better off, its producers of fish will become worse off, and on balance the citizens of Denmark will become better offE) A) and B)
F) C) and D)

Question 13

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Accepted Answer

A) True 
 B)False

Question 14

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. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $5, then the policy change results in a

Accepted Answer

A)  $25 decrease in consumer surplus.
B)  $20 increase in consumer surplus.
C)  $25 decrease in producer surplus.
D)  $20 increase in producer surplus.E) None of the above
F) A) and B)

Question 15

Figure 9-10. The figure applies to Mexico and the good is rifles. 0 and Q0. B) P1 and Q1. C) P2 and Q2. D) P1 and Q0." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

Accepted Answer

A)  P0 and Q0.
B)  P1 and Q1.
C)  P2 and Q2.
D)  P1 and Q0.E) A) and D)
F) C) and D)

Question 16

Figure 9-5 
-Refer to Figure 9-5. Without trade, producer surplus amounts to

Accepted Answer

A)  $210.
B)  $245.
C)  $450.
D)  $455.E) A) and B)
F) A) and C)

Question 17

Figure 9-6 
-Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

Accepted Answer

A)  gain by $100.
B)  gain by $200.
C)  gain by $300.
D)  lose by $100.E) A) and D)
F) None of the above

Question 18

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Accepted Answer

A)  the country becomes an importer of the good as a result.
B)  the world price exceeds the domestic price of the good that prevailed before international trade was allowed.
C)  other countries have a comparative advantage, relative to the country in question, in producing the good.
D)  total surplus does not change as a result.E) B) and D)
F) B) and C)

Question 19

Figure 9-2 
-Refer to Figure 9-2. With free trade, producer surplus is

Accepted Answer

A)  $80.00.
B)  $210.00.
C)  $245.50.
D)  $472.50.E) A) and B)
F) C) and D)

Question 20

Figure 9-11 
-Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

Accepted Answer

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

Exam 9: Application: International Trade

Correct Answer
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Figure 9-5 -Refer to Figure 9-5. Without trade, producer surplus amounts to

Correct Answer
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Figure 9-2 -Refer to Figure 9-2. With free trade, producer surplus is

Correct Answer
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Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the

Correct Answer
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The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Correct Answer
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In a December 2007 New York Times column Paul Krugman argued in favor of

Correct Answer
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Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

Correct Answer
verified

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

Correct Answer
verified

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Correct Answer
verified

Patterns of trade among nations are primarily determined by

Correct Answer
verified

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

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area B represents

Correct Answer
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Figure 9-6 -Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

Correct Answer
verified

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

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

Correct Answer
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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

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

Exam 9: Application: International Trade

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Figure 9-5 -Refer to Figure 9-5. Without trade, producer surplus amounts to

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Figure 9-2 -Refer to Figure 9-2. With free trade, producer surplus is

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Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the

Correct AnswerverifiedShow Answer

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Correct AnswerverifiedShow Answer

In a December 2007 New York Times column Paul Krugman argued in favor of

Correct AnswerverifiedShow Answer

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

Correct AnswerverifiedShow Answer

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

Correct AnswerverifiedShow Answer

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Correct AnswerverifiedShow Answer

Patterns of trade among nations are primarily determined by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area B represents

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Figure 9-6 -Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

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The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

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Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

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

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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,

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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:

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