Question 1

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new free­trade policy has

Accepted Answer

A)   increased consumer surplus and producer surplus in the incense market.
B)   increased consumer surplus in the steel market and left producer surplus in the rug market unchanged.
C)   decreased consumer surplus in both the steel and rug markets.
D)   decreased consumer surplus in the steel market and increased total surplus in the incense market.E) C) and D)
F) All of the above

Question 2

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, consumer surplus is

Accepted Answer

A)   $400 and producer surplus is $100.
B)   $400 and producer surplus is $400.
C)   $900 and producer surplus is $100.
D)   $900 and producer surplus is $400.E) A) and B)
F) A) and C)

Question 3

Figure 9-13 
-Refer to Figure 9-13. Consumer surplus after trade is

Accepted Answer

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

Question 4

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

Accepted Answer

A)   $640.
B)   $1,280.
C)   $2,560.
D)   $3,840.E) B) and D)
F) B) and C)

Question 5

List five arguments given to support trade restrictions.

Accepted Answer

The jobs argument; the nationa...

Question 6

Figure 9-11 
-Refer to Figure 9-11. Producer surplus in this market before trade is

Accepted Answer

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

Question 7

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Accepted Answer

A)   Wheatland has a comparative advantage, relative to other countries, in producing corn.
B)   other countries have a comparative advantage, relative to Wheatland, in producing fish.
C)   the price of fish in Wheatland exceeds the world price of fish.
D)   if Wheatland were to allow trade, it would import corn.E) All of the above
F) A) and B)

Question 8

A quota is

Accepted Answer

A)   a tax placed on imports.
B)   a limit on the quantity of imports.
C)   a tax on exports to other countries.
D)   an excess of exports over imports.E) B) and C)
F) B) and D)

Question 9

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Accepted Answer

A)   the quantity of wine demanded by France, with the tariff, is 18 million bottles per year.
B)   the quantity of wine demanded by France, without the tariff, would be 24 million bottles per year.
C)   the amount of the deadweight loss is 24 million euros per year.
D)   the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff.E) None of the above
F) B) and C)

Question 10

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. With trade, consumer surplus is

Accepted Answer

A)   $3,240.
B)   $6,480.
C)   $6,760.
D)   $13,520.E) A) and B)
F) A) and C)

Question 11

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Accepted Answer

A)   Mexico has a comparative advantage over other countries and Mexico will export oranges.
B)   Mexico has a comparative advantage over other countries and Mexico will import oranges.
C)   other countries have a comparative advantage over Mexico and Mexico will export oranges.
D)   other countries have a comparative advantage over Mexico and Mexico will import oranges.E) B) and C)
F) All of the above

Question 12

Figure 9-13 
-Refer to Figure 9-13. Producer surplus before trade is

Accepted Answer

A)   $3,600.
B)   $4,400.
C)   $5,200.
D)   $6,600.E) A) and C)
F) A) and D)

Exam 9: Application: International Trade

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Correct Answer
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A quota is

Correct Answer
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Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is

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, consumer surplus is

Correct Answer
verified

Figure 9-13 -Refer to Figure 9-13. Producer surplus before trade is

Correct Answer
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The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new freetrade policy has

Correct Answer
verified

List five arguments given to support trade restrictions.

Correct Answer
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The jobs argument; the nationa...
View Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, consumer surplus is

Correct Answer
verified

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11. Producer surplus in this market before trade is

Correct Answer
verified

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

Correct Answer
verified

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Correct Answer
verified

Exam 9: Application: International Trade

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Correct AnswerverifiedShow Answer

A quota is

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is

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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, consumer surplus is

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. Producer surplus before trade is

Correct AnswerverifiedShow Answer

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new free­trade policy has

Correct AnswerverifiedShow Answer

List five arguments given to support trade restrictions.

Correct AnswerverifiedThe jobs argument; the nationa...View AnswerShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, consumer surplus is

Correct AnswerverifiedShow Answer

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Correct AnswerverifiedShow Answer

Figure 9-11 -Refer to Figure 9-11. Producer surplus in this market before trade is

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

Correct AnswerverifiedShow Answer

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Correct AnswerverifiedShow Answer

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The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new freetrade policy has

Correct Answer
verified

Correct Answer
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The jobs argument; the nationa...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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