Exam 9: Application: International Trade

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, will the country import or export this good, and how many units will be imported/exported?

After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Spain is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Spain imposes a $5 tariff on chips. As a result,

The world price of cotton is the highest price of cotton observed anywhere in the world.

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 $5, then the policy change results in a

Deadweight loss measures the decrease in total surplus that results from a tariff or quota.

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

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, will the country import or export this good, and how many units will be imported/exported?

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. Relative to a no-trade situation, which of the following comes with trade?

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

How does an import quota differ from an equivalent tariff?

​When a country opens up to trade in a good for which it has a comparative advantage, and the country begins to export the good, we can conclude that

When a country that imports a particular good imposes a tariff on that good,

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. From the figure it is apparent that

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. With trade, Vietnam will

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. -Refer to Figure 9-22. With free trade, total surplus is

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. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

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

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that