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Figure 9-13 Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is A) $3,600. B) $5,400. C) $7,200. D) $8,100. -Refer to Figure 9-13. Consumer surplus after trade is


A) $3,600.
B) $5,400.
C) $7,200.
D) $8,100.

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

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


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) the country in question has a comparative advantage, relative to other countries, in producing the good.
D) total surplus does not change as a result.

E) All of the above
F) None of the above

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Figure 9-2 The figure illustrates the market for calculators in a country. Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is A) $320. B) $640. C) $845. D) $1,690. -Refer to Figure 9-2. With free trade, consumer surplus is


A) $320.
B) $640.
C) $845.
D) $1,690.

E) All of the above
F) A) and B)

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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. 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, 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. -Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,


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

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Figure 9-2 The figure illustrates the market for calculators in a country. Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, producer surplus is A) $845. B) $1,620. C) $1,690. D) $3,240. -Refer to Figure 9-2. With free trade, producer surplus is


A) $845.
B) $1,620.
C) $1,690.
D) $3,240.

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

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Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?

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Nash will ...

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Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

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Brazil wil...

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Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. The amount of revenue collected by the government from the tariff is A) $6,000. B) $9,000. C) $12,000. D) $15,000. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. The amount of revenue collected by the government from the tariff is


A) $6,000.
B) $9,000.
C) $12,000.
D) $15,000.

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

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Figure 9-6 The figure illustrates the market for roses in a country. Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Before the tariff is imposed, this country A) imports 200 roses. B) imports 400 roses. C) exports 200 roses. D) exports 400 roses. -Refer to Figure 9-6. Before the tariff is imposed, this country


A) imports 200 roses.
B) imports 400 roses.
C) exports 200 roses.
D) exports 400 roses.

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

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Using the graph, assume that the government imposes a $1 tariff on hammers. Answer the following questions given this information. Using the graph, assume that the government imposes a $1 tariff on hammers. Answer the following questions given this information. a. What is the domestic price and quantity demanded of hammers after the tariff is imposed? b. What is the quantity of hammers imported before the tariff? c. What is the quantity of hammers imported after the tariff? d. What would be the amount of consumer surplus before the tariff? e. What would be the amount of consumer surplus after the tariff? f. What would be the amount of producer surplus before the tariff? g. What would be the amount of producer surplus after the tariff? h. What would be the amount of government revenue because of the tariff? i. What would be the total amount of deadweight loss due to the tariff? a. What is the domestic price and quantity demanded of hammers after the tariff is imposed? b. What is the quantity of hammers imported before the tariff? c. What is the quantity of hammers imported after the tariff? d. What would be the amount of consumer surplus before the tariff? e. What would be the amount of consumer surplus after the tariff? f. What would be the amount of producer surplus before the tariff? g. What would be the amount of producer surplus after the tariff? h. What would be the amount of government revenue because of the tariff? i. What would be the total amount of deadweight loss due to the tariff?

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a. $6, 84
b. 66
c. 4...

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President Bush imposed temporary tariffs on imported steel in 2002. The reasons for this trade restriction is most consistent with the


A) national-security argument.
B) infant-industry argument.
C) unfair competition argument.
D) protection-as-a-bargaining chip-argument.

E) All of the above
F) None of the above

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


A) domestic producers of the good become better off.
B) domestic consumers of the good become better off.
C) the gains of the winners fall short of the losses of the losers.
D) All of the above are correct.

E) All of the above
F) A) and D)

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Figure 9-10. The figure applies to Mexico and the good is rifles. Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The area bounded by the points Q0, P0) , Q2, P1) , and Q1, P1) represents A) Mexico's gains from trade. B) the amount by which Mexico's gain in consumer surplus exceeds its loss in producer surplus due to trade. C) Mexico's gain in total surplus due to trade. D) All of the above are correct. -Refer to Figure 9-10. The area bounded by the points Q0, P0) , Q2, P1) , and Q1, P1) represents


A) Mexico's gains from trade.
B) the amount by which Mexico's gain in consumer surplus exceeds its loss in producer surplus due to trade.
C) Mexico's gain in total surplus due to trade.
D) All of the above are correct.

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

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Most economists support the infant-industry argument because it is so easy to implement in practice.

A) True
B) False

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Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. Government revenue raised by the tariff is represented by the area A) E. B) B + E. C) D + E + F. D) B + D + E + F. -Refer to Figure 9-16. Government revenue raised by the tariff is represented by the area


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

E) A) and B)
F) A) and D)

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Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that


A) Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will export coffee.
B) Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will import coffee.
C) other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will export coffee.
D) other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will import coffee.

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

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Import quotas and tariffs produce some common results. Which of the following is not one of those common results?


A) Total surplus in the domestic country falls.
B) Producer surplus in the domestic country increases.
C) The domestic country experiences a deadweight loss.
D) Revenue is raised for the domestic government.

E) A) and D)
F) All of the above

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Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?


A) A multilateral approach can reduce trade restrictions abroad as well as at home.
B) A multilateral approach has the potential to result in freer trade.
C) A multilateral approach requires the agreement of two or more nations.
D) A multilateral approach may have political advantages.

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

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Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is Scenario 9-2 ā€¢ 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. ā€¢ 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. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. where Scenario 9-2 ā€¢ 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. ā€¢ 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. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. Scenario 9-2 ā€¢ 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. ā€¢ 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. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is Scenario 9-2 ā€¢ 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. ā€¢ 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. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. where Scenario 9-2 ā€¢ 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. ā€¢ 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. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. Scenario 9-2 ā€¢ 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. ā€¢ 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. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard


A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00.
B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50.
C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50.
D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00.

E) All of the above
F) B) and C)

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When a government imposes a tariff on a product, the domestic price will equal the world price.

A) True
B) False

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