Question 1

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. If this country allows free trade in tricycles,

Accepted Answer

A) consumers will gain and producers will lose. 
B) consumers will lose and producers will gain. 
C) both consumers and producers will gain. 
D) both consumers and producers will lose. 
A) consumers will gain and producers will lose. 
B) consumers will lose and producers will gain. 
C) both consumers and producers will gain. 
D) both consumers and producers will lose.

Question 2

If the world price of coffee is lower than Colombia's domestic price of coffee without trade, then Colombia

Accepted Answer

A) should import coffee. 
B) has a comparative advantage in coffee. 
C) should produce just enough coffee to satisfy domestic demand. 
D) should produce no coffee domestically. 
A) should import coffee. 
B) has a comparative advantage in coffee. 
C) should produce just enough coffee to satisfy domestic demand. 
D) should produce no coffee domestically.

Question 3

Figure 9-26
The following diagram shows the domestic demand and domestic supply curves in a market.  
-Refer to Figure 9-26. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric

Question 4

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

Accepted Answer

A) Mexico has a comparative advantage over other countries and Mexico will export beets. 
B) Mexico has a comparative advantage over other countries and Mexico will import beets. 
C) other countries have a comparative advantage over Mexico and Mexico will export beets. 
D) other countries have a comparative advantage over Mexico and Mexico will import beets. 
A) Mexico has a comparative advantage over other countries and Mexico will export beets. 
B) Mexico has a comparative advantage over other countries and Mexico will import beets. 
C) other countries have a comparative advantage over Mexico and Mexico will export beets. 
D) other countries have a comparative advantage over Mexico and Mexico will import beets.

Question 5

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Accepted Answer

A) the country becomes an importer of the good as a result. 
B) the world price exceeds the domestic price of the good that prevailed before international trade was allowed. 
C) other countries have a comparative advantage, relative to the country in question, in producing the good. 
D) total surplus does not change as a result. 
A) the country becomes an importer of the good as a result. 
B) the world price exceeds the domestic price of the good that prevailed before international trade was allowed. 
C) other countries have a comparative advantage, relative to the country in question, in producing the good. 
D) total surplus does not change as a result.

Question 6

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. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus and producer surplus?

Accepted Answer

With trade and a tar

Question 7

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Accepted Answer

A) True 
 B)False

Question 8

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. 
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.

Question 9

Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?

Accepted Answer

Nash will

Question 10

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, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric

Question 11

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. 
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.

Question 12

When a country moves away from a free trade position and imposes a tariff on imports, it causes

Accepted Answer

A) a decrease in total surplus in the market. 
B) a decrease in producer surplus in the market. 
C) an increase in consumer surplus in the market. 
D) a decrease in revenue to the government. 
A) a decrease in total surplus in the market. 
B) a decrease in producer surplus in the market. 
C) an increase in consumer surplus in the market. 
D) a decrease in revenue to the government.

Question 13

The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began

Accepted Answer

A) exporting almonds and the price per pound in Uruguay remained at $3.00. 
B) exporting almonds and the price per pound in Uruguay increased to $4.50. 
C) importing almonds and the price per pound in Uruguay remained at $3.00. 
D) importing almonds and the price per pound in Uruguay increased to $4.50. 
A) exporting almonds and the price per pound in Uruguay remained at $3.00. 
B) exporting almonds and the price per pound in Uruguay increased to $4.50. 
C) importing almonds and the price per pound in Uruguay remained at $3.00. 
D) importing almonds and the price per pound in Uruguay increased to $4.50.

Question 14

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

Accepted Answer

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

Question 15

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. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how many units will domestic consumers demand and how many units will domestic producers supply?

Accepted Answer

With trade and a tariff, domes

Question 16

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars.  
-Refer to Figure 9-8. When the country for which the figure is drawn allows international trade in cars,

Accepted Answer

A) consumer surplus increases by the area B. 
B) producer surplus decreases by the area B + D. 
C) total surplus increases by the area D. 
D) All of the above are correct. 
A) consumer surplus increases by the area B. 
B) producer surplus decreases by the area B + D. 
C) total surplus increases by the area D. 
D) All of the above are correct.

Question 17

Figure 9-17  
-Refer to Figure 9-17. When the country moves from free trade to trade and a tariff, consumer surplus

Accepted Answer

A) decreases by $576 and producer surplus does not change. 
B) decreases by $576 and producer surplus increases by $192. 
C) decreases by $792 and producer surplus does not change. 
D) decreases by $792 and producer surplus increases by $192. 
A) decreases by $576 and producer surplus does not change. 
B) decreases by $576 and producer surplus increases by $192. 
C) decreases by $792 and producer surplus does not change. 
D) decreases by $792 and producer surplus increases by $192.

Question 18

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. Without trade, producer surplus amounts to

Accepted Answer

A) $810. 
B) $1,620. 
C) $3,240. 
D) $6,480. 
A) $810. 
B) $1,620. 
C) $3,240. 
D) $6,480.

Question 19

List four benefits of international trade.

Accepted Answer

Increased variety of goods; lo

Question 20

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Accepted Answer

A) Moldova can only import goods; it cannot export goods. 
B) Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C) only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D) Moldova is a price taker. 
A) Moldova can only import goods; it cannot export goods. 
B) Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C) only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D) Moldova is a price taker.

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,

If the world price of coffee is lower than Colombia's domestic price of coffee without trade, then Colombia

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

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

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

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

Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?

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, what are the equilibrium price and equilibrium quantity in this market?

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,

When a country moves away from a free trade position and imposes a tariff on imports, it causes

The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began

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

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. When the country for which the figure is drawn allows international trade in cars,

Figure 9-17 -Refer to Figure 9-17. When the country moves from free trade to trade and a tariff, consumer surplus

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, producer surplus amounts to

List four benefits of international trade.

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

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

Exam 9: Application: International Trade

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,

If the world price of coffee is lower than Colombia's domestic price of coffee without trade, then Colombia

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

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

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

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

Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?

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, what are the equilibrium price and equilibrium quantity in this market?

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,

When a country moves away from a free trade position and imposes a tariff on imports, it causes

The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began

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

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. When the country for which the figure is drawn allows international trade in cars,

Figure 9-17 -Refer to Figure 9-17. When the country moves from free trade to trade and a tariff, consumer surplus

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, producer surplus amounts to

List four benefits of international trade.

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

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