Question 1

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

Question 2

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

Accepted Answer

A)  $14,400.
B)  $16,800.
C)  $21,600.
D)  $24,800.E) A) and C)
F) All of the above

Question 3

List five arguments given to support trade restrictions.

Accepted Answer

The jobs argument; the nationa...

Question 4

Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip. Suppose Denmark removes the tariff. Which of the following outcomes is not 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 5

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Accepted Answer

A) True 
 B)False

Question 6

Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade, thus reducing the gains from trade.

Accepted Answer

A) True 
 B)False

Question 7

Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Accepted Answer

A)  will import almonds.
B)  will export almonds.
C)  will either import almonds or export almonds, but it is not clear from the given information.
D)  would have nothing to gain either from exporting or importing almonds.E) C) and D)
F) A) and B)

Question 8

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 9

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

Accepted Answer

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

Question 10

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. Suppose the world price of cardboard is $60 and international trade is allowed. Then Boxland's consumers demand

Accepted Answer

A)  110 tons of cardboard and Boxland's producers supply 120 tons of cardboard.
B)  96 tons of cardboard and Boxland's producers supply 96 tons of cardboard.
C)  96 tons of cardboard and Boxland's producers supply 115 tons of cardboard.
D)  80 tons of cardboard and Boxland's producers supply 120 tons of cardboard.E) None of the above
F) A) and B)

Question 11

How does an import quota differ from an equivalent tariff?

Accepted Answer

Both the import quota and the tariff rai...

Question 12

Which of the following arguments for trade restrictions is often advanced?

Accepted Answer

A)  Trade restrictions make all Americans better off.
B)  Trade restrictions increase economic efficiency.
C)  Trade restrictions are necessary for economic growth.
D)  Trade restrictions are sometimes necessary for national security.E) C) and D)
F) B) and D)

Question 13

In the market for apples in a certain country, consumer surplus increases and total surplus increases when that country

Accepted Answer

A)  abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of apples.
B)  abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of apples.
C)  abandons a free-trade policy, adopts a no-trade policy, and becomes an importer of apples.
D)  abandons a free-trade policy, adopts a no-trade policy, and becomes an exporter of apples.E) None of the above
F) B) and D)

Question 14

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Accepted Answer

A)  $100.
B)  $200.
C)  $400.
D)  $500.E) All of the above
F) A) and D)

Question 15

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. Suppose the world price of cardboard is $45. Then Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)  $88.75.
B)  $102.50.
C)  $122.50.
D)  $135.00.E) All of the above
F) B) and C)

Question 16

Trade enhances the economic well-being of a nation in the sense that

Accepted Answer

A)  both domestic producers and domestic consumers of a good become better off with trade, regardless of whether the nation imports or exports the good in question.
B)  the gains of domestic producers of a good exceed the losses of domestic consumers of a good, regardless of whether the nation imports or exports the good in question.
C)  trade results in an increase in total surplus.
D)  trade puts downward pressure on the prices of all goods.E) A) and B)
F) A) and C)

Question 17

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. If this country chooses to trade, the price of calculators in this country will be

Accepted Answer

A)  $15 and 80 calculators will be sold domestically.
B)  $15 and 130 calculators will be sold domestically.
C)  $20 and 80 calculators will be sold domestically.
D)  $20 and 130 calculators will be sold domestically.E) A) and B)
F) B) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

When a country that imports a particular good imposes a tariff 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 B)
F) B) and C)

Question 20

Figure 9-21
The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-21. Producer surplus with free trade is

Accepted Answer

A)  $14,000.
B)  $18,000.
C)  $24,000.
D)  $32,000.E) All of the above
F) None of the above

Exam 9: Application: International Trade

Which of the following arguments for trade restrictions is often advanced?

Correct Answer
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Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

Correct Answer
verified

Trade enhances the economic well-being of a nation in the sense that

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

When a country that imports a particular good imposes a tariff on that good,

Correct Answer
verified

How does an import quota differ from an equivalent tariff?

Correct Answer
verified
Both the import quota and the tariff rai...
View Answer

Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Correct Answer
verified

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Correct Answer
verified

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

Correct Answer
verified

Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade, thus reducing the gains from trade.

Correct Answer
verified

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

Correct Answer
verified

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Correct Answer
verified

Correct Answer
verified

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

In the market for apples in a certain country, consumer surplus increases and total surplus increases when that country

Correct Answer
verified

Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip. Suppose Denmark removes the tariff. Which of the following outcomes is not possible?

Correct Answer
verified

List five arguments given to support trade restrictions.

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

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

Correct Answer
verified

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. If this country chooses to trade, the price of calculators in this country will be

Correct Answer
verified

Exam 9: Application: International Trade

Which of the following arguments for trade restrictions is often advanced?

Correct AnswerverifiedShow Answer

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

Correct AnswerverifiedShow Answer

Trade enhances the economic well-being of a nation in the sense that

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

When a country that imports a particular good imposes a tariff on that good,

Correct AnswerverifiedShow Answer

How does an import quota differ from an equivalent tariff?

Correct AnswerverifiedBoth the import quota and the tariff rai...View AnswerShow Answer

Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade, thus reducing the gains from trade.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

In the market for apples in a certain country, consumer surplus increases and total surplus increases when that country

Correct AnswerverifiedShow Answer

Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip. Suppose Denmark removes the tariff. Which of the following outcomes is not possible?

Correct AnswerverifiedShow Answer

List five arguments given to support trade restrictions.

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

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

Correct AnswerverifiedShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. If this country chooses to trade, the price of calculators in this country will be

Correct AnswerverifiedShow Answer

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Both the import quota and the tariff rai...
View Answer

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

Correct Answer
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Correct Answer
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