Question 1

When a government imposes a tariff on a product, the domestic price will equal the world price.

Accepted Answer

A) True 
 B)False

Question 2

Suppose Japan exports cars to Russia and imports wine from France. This situation suggests

Accepted Answer

A) Japan has a comparative advantage relative to France in producing wine, and Russia has a comparative advantage to Japan in producing cars. 
B) Japan has a comparative advantage relative to Russia in producing cars, and France has a comparative advantage relative to Japan in producing wine. 
C) Japan has an absolute advantage relative to Russia in producing cars, and France has an absolute advantage relative to Japan in producing wine. 
D) Japan has an absolute advantage relative to France in producing wine, and Russia has an absolute advantage relative to Japan in producing cars. 
A) Japan has a comparative advantage relative to France in producing wine, and Russia has a comparative advantage to Japan in producing cars. 
B) Japan has a comparative advantage relative to Russia in producing cars, and France has a comparative advantage relative to Japan in producing wine. 
C) Japan has an absolute advantage relative to Russia in producing cars, and France has an absolute advantage relative to Japan in producing wine. 
D) Japan has an absolute advantage relative to France in producing wine, and Russia has an absolute advantage relative to Japan in producing cars.

Question 3

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6. The size of the tariff on roses is

Accepted Answer

A) $4. 
B) $2. 
C) -$2. 
D) $1. 
A) $4. 
B) $2. 
C) -$2. 
D) $1.

Question 4

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2. As a result of trade, total surplus increases by

Accepted Answer

A) $50. 
B) $100. 
C) $250. 
D) $500. 
A) $50. 
B) $100. 
C) $250. 
D) $500.

Question 5

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Accepted Answer

A) lose by $200. 
B) lose by $450. 
C) gain by $200. 
D) gain by $450. 
A) lose by $200. 
B) lose by $450. 
C) gain by $200. 
D) gain by $450.

Question 6

Figure 9-15  
-Refer to Figure 9-15. Consumer surplus with the 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 7

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit.  
-When a country allows trade and becomes an exporter of bicycles,

Accepted Answer

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. 
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.

Question 8

President Bush imposed temporary tariffs on imported steel in 2002. The reasons for this trade restriction is most consistent with the

Accepted Answer

A) national-security argument. 
B) infant-industry argument. 
C) unfair competition argument. 
D) protection-as-a-bargaining chip-argument. 
A) national-security argument. 
B) infant-industry argument. 
C) unfair competition argument. 
D) protection-as-a-bargaining chip-argument.

Question 9

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then

Accepted Answer

A) that country becomes an exporter of pistachios. 
B) that country has a comparative advantage in producing pistachios. 
C) at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country. 
D) All of the above are correct. 
A) that country becomes an exporter of pistachios. 
B) that country has a comparative advantage in producing pistachios. 
C) at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country. 
D) All of the above are correct.

Question 10

Figure 9-15  
-Refer to Figure 9-15. The amount of government revenue created by the tariff is

Accepted Answer

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

Question 11

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, relative to the no-trade situation, international trade in cardboard

Accepted Answer

A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. 
B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. 
C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. 
D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. 
A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. 
B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. 
C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. 
D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984.

Question 12

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. 
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.

Question 13

When a country that imports a particular good imposes an import quota on that good,

Accepted Answer

A) consumer surplus increases and total surplus increases in the market for that good. 
B) consumer surplus increases and total surplus decreases in the market for that good. 
C) consumer surplus decreases and total surplus increases in the market for that good. 
D) consumer surplus decreases and total surplus decreases in the market for that good. 
A) consumer surplus increases and total surplus increases in the market for that good. 
B) consumer surplus increases and total surplus decreases in the market for that good. 
C) consumer surplus decreases and total surplus increases in the market for that good. 
D) consumer surplus decreases and total surplus decreases in the market for that good.

Question 14

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 15

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit.  
-Refer to Figure 9-24. With free trade, total surplus is

Accepted Answer

A) $500. 
B) $800. 
C) $1,000. 
D) $1,300. 
A) $500. 
B) $800. 
C) $1,000. 
D) $1,300.

Question 16

Figure 9-17  
-Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus

Accepted Answer

A) increases by $1,200 and producer surplus increases by $600. 
B) increases by $1,200 and producer surplus decreases by $600. 
C) decreases by $1,350 and producer surplus increases by $450. 
D) decreases by $1,350 and producer surplus decreases by $450. 
A) increases by $1,200 and producer surplus increases by $600. 
B) increases by $1,200 and producer surplus decreases by $600. 
C) decreases by $1,350 and producer surplus increases by $450. 
D) decreases by $1,350 and producer surplus decreases by $450.

Question 17

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. 
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.

Question 18

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. 
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.

Question 19

Figure 9-4. The domestic country is Nicaragua.  
-Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

Accepted Answer

A) $375. 
B) $2,000. 
C) $2,250. 
D) $8,700. 
A) $375. 
B) $2,000. 
C) $2,250. 
D) $8,700.

Question 20

Figure 9-28
The following diagram shows the domestic demand and domestic supply curves in a market.  
-Refer to Figure 9-28. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric

Exam 9: Application: International Trade

When a government imposes a tariff on a product, the domestic price will equal the world price.

Suppose Japan exports cars to Russia and imports wine from France. This situation suggests

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The size of the tariff on roses is

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. As a result of trade, total surplus increases by

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Figure 9-15 -Refer to Figure 9-15. Consumer surplus with the tariff is

Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -When a country allows trade and becomes an exporter of bicycles,

President Bush imposed temporary tariffs on imported steel in 2002. The reasons for this trade restriction is most consistent with the

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then

Figure 9-15 -Refer to Figure 9-15. The amount of government revenue created by the tariff is

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

When a country that imports a particular good imposes an import quota on that good,

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. With free trade, total surplus is

Figure 9-17 -Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus

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

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

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

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

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