Question 1

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 the world price of peaches is $5, then

Accepted Answer

A)   producer surplus will be smaller than it would be if Isoland banned trade.
B)   consumer surplus will be smaller than it would be if Isoland banned trade.
C)   the domestic quantity of peaches demanded will exceed the domestic quantity of peaches supplied.
D)   Isoland will be an importer of peaches.E) A) and B)
F) C) and D)

Question 2

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)   export 1,000 units of rice.
B)   export 1,500 units of rice.
C)   import 1,000 units of rice.
D)   import 1,500 units of rice.E) A) and B)
F) A) and C)

Question 4

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of beans increases to equal the world price of beans, then

Accepted Answer

A)   that country becomes an exporter of beans.
B)   that country has a comparative advantage in producing beans.
C)   at the world price, the quantity of beans supplied in that country exceeds the quantity of beans demanded in that country.
D)   All of the above are correct.E) A) and C)
F) None of the above

Question 5

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. At the world price and with free trade,

Accepted Answer

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

Question 6

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. 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 are consumer surplus, producer surplus, tariff revenue, and total surplus?

Accepted Answer

With trade and a tariff, consu...

Question 7

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. When the country for which the figure is drawn allows international trade in crude oil,

Accepted Answer

A)   consumer surplus changes from the area A + B + D to the area A.
B)   producer surplus changes from the area C to the area B + C + D.
C)   total surplus decreases by the area D.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 8

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer 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) None of the above
F) All of the above

Question 9

When a country that imports a particular good imposes an import quota on that 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 C)
F) C) and D)

Question 10

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-24. With free trade, the country

Accepted Answer

A)   exports 20 units of the good.
B)   imports 20 units of the good.
C)   exports 30 units of the good.
D)   imports 30 units of the good.E) All of the above
F) A) and C)

Question 11

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

Accepted Answer

A) True 
 B)False

Question 12

Figure 9-20
The figure illustrates the market for rice in Vietnam. 
-Refer to Figure 9-20. In the absence of trade, total surplus in the Vietnamese rice market amounts to

Accepted Answer

A)   9,250.
B)   10,000.
C)   12,000.
D)   13,000.E) A) and B)
F) C) and D)

Question 13

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

Accepted Answer

A)   Guatemala will export coffee if trade is allowed.
B)   Guatemala will import coffee if trade is allowed.
C)   Guatemala has nothing to gain either by importing or exporting coffee.
D)   the world price will fall if Guatemala begins to allow its citizens to trade with other countries.E) C) and D)
F) B) and D)

Question 14

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) C) and D)
F) None of the above

Question 15

Figure 9-15 
-Refer to Figure 9-15. Consumer surplus with the tariff is

Accepted Answer

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

Question 16

Figure 9-15 
-Refer to Figure 9-15. Producer surplus with the tariff is

Accepted Answer

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

Question 17

Figure 9-17 
-Refer to Figure 9-17. Without trade, consumer surplus is

Accepted Answer

A)   $400 and producer surplus is $200.
B)   $400 and producer surplus is $800.
C)   $1,600 and producer surplus is $200.
D)   $1,600 and producer surplus is $800.E) B) and C)
F) A) and D)

Question 18

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

The countr...

Question 19

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Without trade, producer surplus amounts to

Accepted Answer

A)   $810.
B)   $1,620.
C)   $3,240.
D)   $6,480.E) B) and D)
F) A) and B)

Question 20

Figure 9-12 
-Refer to Figure 9-12. With trade allowed, this country

Accepted Answer

A)   exports 400 units of the good.
B)   exports 800 units of the good.
C)   imports 400 units of the good.
D)   exports 1,600 units of the good.E) B) and C)
F) A) and D)

Exam 9: Application: International Trade

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. At the world price and with free trade,

Correct Answer
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The countr...
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With trade and a tariff, consu...
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When a country that imports a particular good imposes an import quota on that good,

Correct Answer
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Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of beans increases to equal the world price of beans, then

Correct Answer
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Figure 9-15 -Refer to Figure 9-15. Producer surplus with the tariff is

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

Correct Answer
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Figure 9-17 -Refer to Figure 9-17. Without trade, consumer surplus is

Correct Answer
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A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

Correct Answer
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Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. In the absence of trade, total surplus in the Vietnamese rice market amounts to

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

Correct Answer
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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 and the world price of peaches is $5, then

Correct Answer
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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 Answer
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Figure 9-12 -Refer to Figure 9-12. With trade allowed, this country

Correct Answer
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Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

Correct Answer
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Figure 9-15 -Refer to Figure 9-15. Consumer surplus with the tariff is

Correct Answer
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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, producer surplus amounts to

Correct Answer
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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. When the country for which the figure is drawn allows international trade in crude oil,

Correct Answer
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When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

Correct Answer
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Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. With free trade, the country

Correct Answer
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Exam 9: Application: International Trade

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. At the world price and with free trade,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe countr...View AnswerShow Answer

Correct AnswerverifiedWith trade and a tariff, consu...View AnswerShow Answer

When a country that imports a particular good imposes an import quota on that good,

Correct AnswerverifiedShow Answer

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of beans increases to equal the world price of beans, then

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Figure 9-15 -Refer to Figure 9-15. Producer surplus with the tariff is

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

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. Without trade, consumer surplus is

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A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

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Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. In the absence of trade, total surplus in the Vietnamese rice market amounts to

Correct AnswerverifiedShow Answer

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

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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 and the world price of peaches is $5, then

Correct AnswerverifiedShow Answer

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 AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12. With trade allowed, this country

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

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. Consumer surplus with the tariff is

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, producer surplus amounts to

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. When the country for which the figure is drawn allows international trade in crude oil,

Correct AnswerverifiedShow Answer

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

Correct AnswerverifiedShow Answer

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. With free trade, the country

Correct AnswerverifiedShow Answer

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The countr...
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With trade and a tariff, consu...
View Answer

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