Question 1

When markets open up to international trade, we know that total surplus will rise.​

Accepted Answer

A) True 
 B)False

Question 2

​Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

Accepted Answer

A) True 
 B)False

Question 3

The two basic approaches that a country can take as a means to achieve free trade are the

Accepted Answer

A) unilateral approach and the multilateral approach. 
B) short-run approach and the long-run approach. 
C) continental approach and the global approach. 
D) industry approach and the security approach. 
A) unilateral approach and the multilateral approach. 
B) short-run approach and the long-run approach. 
C) continental approach and the global approach. 
D) industry approach and the security approach.

Question 4

Figure 9-3. The domestic country is China.  
-Refer to Figure 9-3. With no international trade,

Accepted Answer

A) the equilibrium price is $12 and the equilibrium quantity is 300. 
B) the equilibrium price is $16 and the equilibrium quantity is 200. 
C) the equilibrium price is $16 and the equilibrium quantity is 300. 
D) the equilibrium price is $16 and the equilibrium quantity is 450. 
A) the equilibrium price is $12 and the equilibrium quantity is 300. 
B) the equilibrium price is $16 and the equilibrium quantity is 200. 
C) the equilibrium price is $16 and the equilibrium quantity is 300. 
D) the equilibrium price is $16 and the equilibrium quantity is 450.

Question 5

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, how much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer

Question 6

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Accepted Answer

Jumanji wi

Question 7

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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

Question 9

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

Accepted Answer

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. 
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.

Question 10

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.  
-Refer to Figure 9-16. The area C + D + E + F represents

Accepted Answer

A) the decrease in consumer surplus caused by the tariff. 
B) the decrease in total surplus caused by the tariff. 
C) the deadweight loss of the tariff minus government revenue raised by the tariff. 
D) the deadweight loss of the tariff plus government revenue raised by the tariff. 
A) the decrease in consumer surplus caused by the tariff. 
B) the decrease in total surplus caused by the tariff. 
C) the deadweight loss of the tariff minus government revenue raised by the tariff. 
D) the deadweight loss of the tariff plus government revenue raised by the tariff.

Question 11

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

Accepted Answer

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

Question 12

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2. At the world price and with free trade,

Accepted Answer

A) the domestic quantity of calculators demanded is greater than the domestic quantity of calculators supplied. 
B) the calculator market is in equilibrium. 
C) the domestic demand for calculators is perfectly inelastic. 
D) both domestic producers of calculators and domestic consumers of calculators are better off than they were without free trade. 
A) the domestic quantity of calculators demanded is greater than the domestic quantity of calculators supplied. 
B) the calculator market is in equilibrium. 
C) the domestic demand for calculators is perfectly inelastic. 
D) both domestic producers of calculators and domestic consumers of calculators are better off than they were without free trade.

Question 13

Some goods can be produced at low cost only if they are produced in large quantities. This phenomenon is called

Accepted Answer

A) marginal cost of production. 
B) marginal benefit of size. 
C) economies of scale. 
D) economies of production. 
A) marginal cost of production. 
B) marginal benefit of size. 
C) economies of scale. 
D) economies of production.

Question 14

Figure 9-9  
-Refer to Figure 9-9. Consumer surplus in this market after trade is

Accepted Answer

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

Question 15

Which of the following tools and concepts is useful in the analysis of international trade?

Accepted Answer

A) total surplus 
B) domestic supply 
C) equilibrium price 
D) All of the above are correct. 
A) total surplus 
B) domestic supply 
C) equilibrium price 
D) All of the above are correct.

Question 16

Figure 9-12  
-Refer to Figure 9-12. With trade, domestic production and domestic consumption, respectively, are

Accepted Answer

A) 1,200 and 800. 
B) 1,600 and 800. 
C) 800 and 1,200. 
D) 800 and 1,600. 
A) 1,200 and 800. 
B) 1,600 and 800. 
C) 800 and 1,200. 
D) 800 and 1,600.

Question 17

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles.  
-Refer to Figure 9-19. With free trade, the country for which the figure is drawn will

Accepted Answer

A) export 30 units of textiles. 
B) export 50 units of textiles. 
C) import 30 units of textiles. 
D) import 50 units of textiles. 
A) export 30 units of textiles. 
B) export 50 units of textiles. 
C) import 30 units of textiles. 
D) import 50 units of textiles.

Question 18

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Accepted Answer

A) will increase, and this will cause consumer surplus to decrease. 
B) will decrease, and this will cause consumer surplus to increase. 
C) will be unaffected, and consumer surplus will be unaffected as well. 
D) could increase or decrease or be unaffected; this cannot be determined. 
A) will increase, and this will cause consumer surplus to decrease. 
B) will decrease, and this will cause consumer surplus to increase. 
C) will be unaffected, and consumer surplus will be unaffected as well. 
D) could increase or decrease or be unaffected; this cannot be determined.

Question 19

Figure 9-29
The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit.  
-Refer to Figure 9-29. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Accepted Answer

Without trade, consu

Question 20

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. If Isoland allows international trade and if the world price of peaches is $3, then

Accepted Answer

A) Isoland has a comparative advantage, relative to other countries, in producing peaches. 
B) Isoland will export peaches. 
C) producer surplus with trade exceeds producer surplus without trade. 
D) consumer surplus with trade exceeds consumer surplus without trade. 
A) Isoland has a comparative advantage, relative to other countries, in producing peaches. 
B) Isoland will export peaches. 
C) producer surplus with trade exceeds producer surplus without trade. 
D) consumer surplus with trade exceeds consumer surplus without trade.

Exam 9: Application: International Trade

When markets open up to international trade, we know that total surplus will rise.​

​Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

The two basic approaches that a country can take as a means to achieve free trade are the

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With no international trade,

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, how much are consumer surplus, producer surplus, and total surplus with trade?

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

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

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

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The area C + D + E + F represents

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

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. At the world price and with free trade,

Some goods can be produced at low cost only if they are produced in large quantities. This phenomenon is called

Figure 9-9 -Refer to Figure 9-9. Consumer surplus in this market after trade is

Which of the following tools and concepts is useful in the analysis of international trade?

Figure 9-12 -Refer to Figure 9-12. With trade, domestic production and domestic consumption, respectively, are

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19. With free trade, the country for which the figure is drawn will

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. -Refer to Figure 9-29. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

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. If Isoland allows international trade and if the world price of peaches is $3, then

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

When markets open up to international trade, we know that total surplus will rise.

Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.