Question 1

Several arguments for restricting trade have been advanced. Those arguments do not include

Accepted Answer

A)   the jobs argument.
B)   the protection-as-a-bargaining-chip argument.
C)   the no-deadweight-loss argument.
D)   the infant-industry argument.E) B) and D)
F) A) and D)

Question 2

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

Question 3

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Accepted Answer

A)   Ireland has a comparative advantage relative to the United States in producing pineapples, and China has a comparative advantage relative to Ireland in producing beer.
B)   Ireland has a comparative advantage relative to China in producing beer, and the United States has a comparative advantage relative to Ireland in producing pineapples.
C)   Ireland has an absolute advantage relative to the United States in producing pineapples, and China has an absolute advantage relative to Ireland in producing beer.
D)   Ireland has an absolute advantage relative to China in producing beer, and the United States has an absolute advantage relative to Ireland in producing pineapples.E) A) and B)
F) A) and C)

Question 4

For Country A, the world price of textiles exceeds the domestic equilibrium price of textiles. As a result, international trade allows sellers of textiles in Country A to experience greater producer surplus than they otherwise would experience.

Accepted Answer

A) True 
 B)False

Question 5

Figure 9-28
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers supply?

Accepted Answer

Domestic consumers w...

Question 6

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. With trade and without a tariff,

Accepted Answer

A)   the domestic price is equal to the world price.
B)   roses are sold at $4 in this market.
C)   there is a shortage of 400 roses in this market.
D)   this country imports 200 roses.E) A) and D)
F) A) and B)

Question 7

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Accepted Answer

A)   cannot experience significant gains or losses by trading with other countries.
B)   cannot have a significant comparative advantage over other countries.
C)   cannot affect world prices by trading with other countries.
D)   All of the above are correct.E) None of the above
F) B) and D)

Question 8

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

Accepted Answer

A)   England has a comparative advantage over other countries and England will export wine.
B)   England has a comparative advantage over other countries and England will import wine.
C)   other countries have a comparative advantage over England and England will export wine.
D)   other countries have a comparative advantage over England and England will import wine.E) A) and B)
F) None of the above

Question 9

Figure 9-27
The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-27. If the country allows free trade, how many units will domestic consumers demand and how many units will domestic producers produce?

Accepted Answer

With trade, domestic...

Question 10

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 for domestic crude-oil consumers decreases.
B)   the demand for crude oil by domestic crude-oil consumers decreases.
C)   the losses of the domestic losers outweigh the gains of the domestic winners.
D)   domestic crude-oil producers sell less crude oil.E) A) and B)
F) B) and C)

Question 11

When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?

Accepted Answer

A)   The gains of domestic consumers of bottled water exceed the losses of domestic producers of bottled water.
B)   The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water.
C)   The price paid by domestic consumers of bottled water decreases.
D)   The price received by domestic producers of bottled water decreases.E) B) and C)
F) A) and B)

Question 12

Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that

Accepted Answer

A)   if Canada were to allow trade, it would export hockey sticks.
B)   Canada has an absolute advantage, relative to other countries, in producing hockey sticks.
C)   Canada has a comparative advantage, relative to other countries, in producing baseball bats.
D)   All of the above are correct.E) All of the above
F) B) and D)

Question 13

Patterns of trade among nations are primarily determined by

Accepted Answer

A)   cultural considerations.
B)   political considerations.
C)   comparative advantage.
D)   differences in the income elasticity of demand among nations.E) A) and D)
F) A) and C)

Question 14

Japan imposes a $300 per ton tariff on imported steel, raising the price charged in Japan to $1,000. Using only this information, which of the following statements is correct?

Accepted Answer

A)   The world price for steel is $300.
B)   The world price for steel is $700.
C)   The world price for steel is $1,000.
D)   The world price for steel is $1,300.E) A) and D)
F) All of the above

Question 15

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. The equilibrium price and the equilibrium quantity of cheese in Wales before trade are

Accepted Answer

A)   P1 and Q2.
B)   P1 and Q1.
C)   P0 and Q0.
D)   P0 and Q1.E) B) and C)
F) All of the above

Question 16

Which of the following is the most accurate statement?

Accepted Answer

A)   Protection is necessary in order for young industries to grow up and be successful.
B)   Protection is not necessary for an industry to grow.
C)   Protection is necessary because if young industries are not protected, they may suffer losses.
D)   Protection may not always be necessary for infant industries, but it has proven to be useful in most cases.E) A) and C)
F) All of the above

Question 17

Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?

Accepted Answer

A)   The price of paper in Republica decreased as a result of the policy change.
B)   Republica began exporting paper as a result of the policy change.
C)   The domestic demand curve for paper shifted to the right as a result of the policy change.
D)   The domestic quantity of paper demanded increased as a result of the policy change.E) B) and C)
F) None of the above

Question 18

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Accepted Answer

A)   P1 and Q2.
B)   P1 and Q1.
C)   P0 and Q0.
D)   P3 and Q1.E) A) and C)
F) B) and C)

Question 19

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. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

Accepted Answer

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

Question 20

Figure 9-25
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. 
-Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Accepted Answer

A)   $25.
B)   $50.
C)   $75.
D)   $100.E) A) and D)
F) C) and D)

Exam 9: Application: International Trade

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. The equilibrium price and the equilibrium quantity of cheese in Wales before trade are

Correct Answer
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Correct Answer
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Japan imposes a $300 per ton tariff on imported steel, raising the price charged in Japan to $1,000. Using only this information, which of the following statements is correct?

Correct Answer
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Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers supply?

Correct Answer
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Domestic consumers w...
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When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?

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 9-14. 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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Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that

Correct Answer
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Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Correct Answer
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When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Correct Answer
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Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?

Correct Answer
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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. With trade and without a tariff,

Correct Answer
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Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Correct Answer
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Assume, for England, that the domestic price of wine without international trade is lower than the world price of wine. This suggests that, in the production of wine,

Correct Answer
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Patterns of trade among nations are primarily determined by

Correct Answer
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Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Correct Answer
verified

Correct Answer
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With trade, domestic...
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Which of the following is the most accurate statement?

Correct Answer
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Several arguments for restricting trade have been advanced. Those arguments do not include

Correct Answer
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For Country A, the world price of textiles exceeds the domestic equilibrium price of textiles. As a result, international trade allows sellers of textiles in Country A to experience greater producer surplus than they otherwise would experience.

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. The equilibrium price and the equilibrium quantity of cheese in Wales before trade are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Japan imposes a $300 per ton tariff on imported steel, raising the price charged in Japan to $1,000. Using only this information, which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedDomestic consumers w...View AnswerShow Answer

When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?

Correct AnswerverifiedShow Answer

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

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

Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that

Correct AnswerverifiedShow Answer

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Correct AnswerverifiedShow Answer

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Correct AnswerverifiedShow Answer

Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. With trade and without a tariff,

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Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Patterns of trade among nations are primarily determined by

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Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade, domestic...View AnswerShow Answer

Which of the following is the most accurate statement?

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Several arguments for restricting trade have been advanced. Those arguments do not include

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For Country A, the world price of textiles exceeds the domestic equilibrium price of textiles. As a result, international trade allows sellers of textiles in Country A to experience greater producer surplus than they otherwise would experience.

Correct AnswerverifiedShow Answer

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Domestic consumers w...
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With trade, domestic...
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