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Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is 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, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. , where 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, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. represents the domestic quantity of cardboard demanded, in tons, and 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, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is 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, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. , where 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, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. represents the domestic quantity of cardboard supplied, in tons, and 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, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard, A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,


A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off.
B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.
C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.

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

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Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,


A) Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off.
B) Turkish consumers of wheat become worse off and Turkish producers of wheat become better off.
C) Turkish consumers of wheat become better off and Turkish producers of wheat become worse off.
D) Turkish consumers of wheat become better off and Turkish producers of wheat become better off.

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

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When a country allows trade and becomes an exporter of bicycles,


A) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country rises.
B) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country falls.
C) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country rises.
D) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country falls.

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

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Figure 9-9 Figure 9-9 -Refer to Figure 9-9. Producer surplus in this market before trade is A) A. B) A + B. C) B + C + D. D) C. -Refer to Figure 9-9. Producer surplus in this market before trade is


A) A.
B) A + B.
C) B + C + D.
D) C.

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

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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. 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. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $3, then the policy change results in a A) $15.00 decrease in producer surplus. B) $45.00 increase in consumer surplus. C) $20.00 increase in total surplus. D) $12.50 increase in total surplus. -Refer to Figure 9-18. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $3, then the policy change results in a


A) $15.00 decrease in producer surplus.
B) $45.00 increase in consumer surplus.
C) $20.00 increase in total surplus.
D) $12.50 increase in total surplus.

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

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William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

A) True
B) False

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

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Trade among nations is ultimately based on


A) absolute advantage.
B) strategic advantage.
C) comparative advantage.
D) technical advantage.

E) None of the above
F) B) and C)

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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


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

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Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade? -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

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With trade, consumer surplus f...

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The before-trade price of fish in Germany is $8.00 per pound. The world price of fish is $6.00 per pound. Germany is a price-taker in the fish market. If Germany allows trade in fish, then Germany will become an


A) importer of fish and the price of fish in Germany will be $6.00.
B) importer of fish and the price of fish in Germany will be $8.00.
C) exporter of fish and the price of fish in Germany will be $6.00.
D) exporter of fish and the price of fish in Germany will be $8.00.

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

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Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: 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, how much are consumer surplus, producer surplus, and producer surplus with trade? -Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, how much are consumer surplus, producer surplus, and producer surplus with trade?

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With trade, consumer...

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Figure 9-9 Figure 9-9 -Refer to Figure 9-9. Total surplus in this market before trade is A) A + B. B) A + B + C. C) A + B + C + D. D) B + C + D. -Refer to Figure 9-9. Total surplus in this market before trade is


A) A + B.
B) A + B + C.
C) A + B + C + D.
D) B + C + D.

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

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​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. ​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26.​ The figure shows that A) ​there will be a surplus of baseballs if the U.S. opens the market for baseballs to international trade. B) ​there will be a shortage of baseballs after the U.S. market for baseballs opens up to international trade. C) ​the U.S. has a comparative advantage in the production of baseballs. D) ​other countries have an absolute advantage in the production of baseballs. -Refer to Figure 9-26.​ The figure shows that


A) ​there will be a surplus of baseballs if the U.S. opens the market for baseballs to international trade.
B) ​there will be a shortage of baseballs after the U.S. market for baseballs opens up to international trade.
C) ​the U.S. has a comparative advantage in the production of baseballs.
D) ​other countries have an absolute advantage in the production of baseballs.

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

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​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. ​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will​ A) ​import 600 baseballs. B) ​export 300 baseballs. C) ​import 400 baseballs. D) ​export 600 baseballs. -Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will​


A) ​import 600 baseballs.
B) ​export 300 baseballs.
C) ​import 400 baseballs.
D) ​export 600 baseballs.

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

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Refer to Figure 9-15. Producer surplus with trade and without a tariff is


A) G.
B) C + G.
C) A + C + G.
D) A + B + C + G.

E) A) and D)
F) None of the above

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Use the graph to answer the following questions about CDs. Use the graph to answer the following questions about CDs. a.What is the equilibrium price of CDs before trade? b.What is the equilibrium quantity of CDs before trade? c.What is the price of CDs after trade is allowed? d.What is the quantity of CDs exported after trade is allowed? e.What is the amount of consumer surplus before trade? f. What is the amount of consumer surplus after trade? g. What is the amount of producer surplus before trade? h. What is the amount of producer surplus after trade? i. What is the amount of total surplus before trade? j. What is the amount of total surplus after trade? k. What is the change in total surplus because of trade? a.What is the equilibrium price of CDs before trade? b.What is the equilibrium quantity of CDs before trade? c.What is the price of CDs after trade is allowed? d.What is the quantity of CDs exported after trade is allowed? e.What is the amount of consumer surplus before trade? f. What is the amount of consumer surplus after trade? g. What is the amount of producer surplus before trade? h. What is the amount of producer surplus after trade? i. What is the amount of total surplus before trade? j. What is the amount of total surplus after trade? k. What is the change in total surplus because of trade?

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a.$12
b.50
c.$15
d.3...

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Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as


A) confirmation of the virtues of free trade.
B) confirmation of the infant-industry argument.
C) confirmation that free trade agreements are not necessary.
D) confirmation that specialization in absolute advantage works.

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

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For any country, if the world price of copper is lower than the domestic price of copper without trade, that country should


A) export copper.
B) import copper.
C) neither export nor import copper, since that country cannot gain from trade.
D) neither export nor import copper, since that country already produces copper at a low cost compared to other countries.

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

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Suppose Iceland goes from being an isolated country to being an exporter of coats. As a result,


A) consumer surplus increases for consumers of coats in Iceland.
B) producer surplus increases for producers of coats in Iceland.
C) total surplus remains unchanged in the coat market in Iceland.
D) it is reasonable to infer that other countries have a comparative advantage over Iceland in coat production.

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

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