Question 1

When a nation first begins to trade with other countries and the nation becomes an importer of corn,

Accepted Answer

A)   this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade.
B)   this is an indication that the nation has a comparative advantage in producing corn.
C)   the nation's consumers of corn become better off and the nation's producers of corn become worse off.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 2

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter of a particular 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) A) and B)
F) None of the above

Question 3

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 4

What is the fundamental basis for trade among nations?

Accepted Answer

A)   shortages or surpluses in nations that do not trade
B)   misguided economic policies
C)   absolute advantage
D)   comparative advantageE) A) and B)
F) A) and C)

Question 5

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

Accepted Answer

A)   $1,600.
B)   $2,400.
C)   $3,200.
D)   $3,600.E) A) and D)
F) A) and B)

Question 6

Figure 9-11 
-Refer to Figure 9-11.Consumer surplus in this market after trade is

Accepted Answer

A)   A.
B)   C + B.
C)   A + B + D.
D)   B + C + D.E) A) and B)
F) A) and C)

Question 7

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) C) and D)
F) A) and D)

Question 8

Figure 9-5 
-Refer to Figure 9-5.With trade,this country

Accepted Answer

A)   exports 20 wagons.
B)   exports 50 wagons.
C)   imports 30 wagons.
D)   imports 50 wagons.E) A) and B)
F) A) and C)

Question 9

Economists view free trade as a way to raise living standards both at home and abroad.

Accepted Answer

A) True 
 B)False

Question 10

Denmark is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Denmark imposes a $5 tariff on chips.Which of the following outcomes is possible?

Accepted Answer

A)   More Danish-produced chips are sold in Denmark.
B)   More foreign-produced chips are sold in Denmark.
C)   Danish consumers of chips become better off.
D)   Total surplus in the Danish chip market increases.E) A) and B)
F) A) and C)

Question 11

Which of the following is not a commonly-advanced argument for trade restrictions?

Accepted Answer

A)   the jobs argument
B)   the national-security argument
C)   the infant-industry argument
D)   the efficiency argumentE) A) and C)
F) A) and B)

Question 12

When a country that imports shoes imposes a tariff on shoes,buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)   $45.
B)   $80.
C)   $210.
D)   $245.E) B) and C)
F) All of the above

Question 14

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

, where   represents the domestic quantity of cardboard demanded,in tons,and   represents the price of a ton of cardboard. For Boxland,the equation of the domestic supply curve for cardboard is        , where   represents the domestic quantity of cardboard supplied,in tons,and   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 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." class="answers-bank-image d-inline" rel="preload" > ,
where        , where   represents the domestic quantity of cardboard demanded,in tons,and   represents the price of a ton of cardboard. For Boxland,the equation of the domestic supply curve for cardboard is        , where   represents the domestic quantity of cardboard supplied,in tons,and   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 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." class="answers-bank-image d-inline" rel="preload" > represents the domestic quantity of cardboard demanded,in tons,and        , where   represents the domestic quantity of cardboard demanded,in tons,and   represents the price of a ton of cardboard. For Boxland,the equation of the domestic supply curve for cardboard is        , where   represents the domestic quantity of cardboard supplied,in tons,and   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 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." class="answers-bank-image d-inline" rel="preload" > represents the price of a ton of cardboard.
For Boxland,the equation of the domestic supply curve for cardboard is

, where   represents the domestic quantity of cardboard demanded,in tons,and   represents the price of a ton of cardboard. For Boxland,the equation of the domestic supply curve for cardboard is        , where   represents the domestic quantity of cardboard supplied,in tons,and   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 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." class="answers-bank-image d-inline" rel="preload" > ,
where        , where   represents the domestic quantity of cardboard demanded,in tons,and   represents the price of a ton of cardboard. For Boxland,the equation of the domestic supply curve for cardboard is        , where   represents the domestic quantity of cardboard supplied,in tons,and   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 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." class="answers-bank-image d-inline" rel="preload" > represents the domestic quantity of cardboard supplied,in tons,and        , where   represents the domestic quantity of cardboard demanded,in tons,and   represents the price of a ton of cardboard. For Boxland,the equation of the domestic supply curve for cardboard is        , where   represents the domestic quantity of cardboard supplied,in tons,and   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 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." class="answers-bank-image d-inline" rel="preload" > 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) B) and C)

Question 15

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 $5,then

Accepted Answer

A)   Isoland has a comparative advantage,relative to other countries,in producing peaches.
B)   Isoland will import peaches.
C)   consumer surplus with trade exceeds consumer surplus without trade.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 16

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S.minimum wage.Prohibiting such goods is likely to

Accepted Answer

A)   cause these factories to pay the U.S.minimum wage.
B)   increase the rate of technological advance in poor countries so that they can afford to pay higher wages.
C)   increase poverty in poor countries and benefit U.S.firms which compete with these imports.
D)   harm U.S.firms which compete with these imports.E) None of the above
F) All of the above

Question 17

Congresswoman Gaga represents a state in which several firms manufacture furniture.She wants to impose tariffs on all imported furniture.Which of the following is the least likely consequence of such tariffs?

Accepted Answer

A)   Domestic furniture buyers will lose consumer surplus,have less variety,and will pay higher prices.
B)   Domestic furniture producers will gain producer surplus.
C)   Domestic furniture producers will have a higher rate of technological advance.
D)   Domestic furniture producers will have more market power.E) B) and D)
F) None of the above

Question 18

GATT is an example of a successful unilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   export 11 units of wool.
B)   export 5 units of wool.
C)   import 15 units of wool.
D)   import 6 units of wool.E) B) and C)
F) None of the above

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) A) and B)
F) None of the above

Exam 9: Application: International Trade

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 $5,then

Correct Answer
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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?

Correct Answer
verified

Congresswoman Gaga represents a state in which several firms manufacture furniture.She wants to impose tariffs on all imported furniture.Which of the following is the least likely consequence of such tariffs?

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11.Consumer surplus in this market after trade is

Correct Answer
verified

When a country that imports shoes imposes a tariff on shoes,buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Correct Answer
verified

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S.minimum wage.Prohibiting such goods is likely to

Correct Answer
verified

Denmark is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Denmark imposes a $5 tariff on chips.Which of the following outcomes is possible?

Correct Answer
verified

Figure 9-5 -Refer to Figure 9-5.With trade,this country

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

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

GATT is an example of a successful unilateral approach to achieving free trade.

Correct Answer
verified

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

Correct Answer
verified

When a nation first begins to trade with other countries and the nation becomes an importer of corn,

Correct Answer
verified

Correct Answer
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Figure 9-12 -Refer to Figure 9-12.Consumer surplus after trade is

Correct Answer
verified

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

Correct Answer
verified

What is the fundamental basis for trade among nations?

Correct Answer
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Economists view free trade as a way to raise living standards both at home and abroad.

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not a commonly-advanced argument for trade restrictions?

Correct Answer
verified

Exam 9: Application: International Trade

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 $5,then

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

Congresswoman Gaga represents a state in which several firms manufacture furniture.She wants to impose tariffs on all imported furniture.Which of the following is the least likely consequence of such tariffs?

Correct AnswerverifiedShow Answer

Figure 9-11 -Refer to Figure 9-11.Consumer surplus in this market after trade is

Correct AnswerverifiedShow Answer

When a country that imports shoes imposes a tariff on shoes,buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Correct AnswerverifiedShow Answer

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S.minimum wage.Prohibiting such goods is likely to

Correct AnswerverifiedShow Answer

Denmark is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Denmark imposes a $5 tariff on chips.Which of the following outcomes is possible?

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.With trade,this country

Correct AnswerverifiedShow Answer

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

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

GATT is an example of a successful unilateral approach to achieving free trade.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a nation first begins to trade with other countries and the nation becomes an importer of corn,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is the fundamental basis for trade among nations?

Correct AnswerverifiedShow Answer

Economists view free trade as a way to raise living standards both at home and abroad.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not a commonly-advanced argument for trade restrictions?

Correct AnswerverifiedShow Answer

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