Question 1

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Accepted Answer

A) the country will be an exporter of the good. 
B) the country will be an importer of the good. 
C) the country will be neither an exporter nor an importer of the good. 
D) Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither. 
A) the country will be an exporter of the good. 
B) the country will be an importer of the good. 
C) the country will be neither an exporter nor an importer of the good. 
D) Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.

Question 2

Figure 9-13  
-Refer to Figure 9-13. Consumer surplus before trade is

Accepted Answer

A) $1,600. 
B) $2,400. 
C) $3,200. 
D) $3,600. 
A) $1,600. 
B) $2,400. 
C) $3,200. 
D) $3,600.

Question 3

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations:  
-Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, how much are consumer surplus, producer surplus, and producer surplus with trade?

Accepted Answer

With trade, consumer

Question 4

Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?

Accepted Answer

A unilateral approach is when a country

Question 5

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

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

Question 7

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

Accepted Answer

A) will export pecans (assuming trade is allowed). 
B) will import pecans (assuming trade is allowed). 
C) has a comparative advantage in producing pecans. 
D) All of the above are correct. 
A) will export pecans (assuming trade is allowed). 
B) will import pecans (assuming trade is allowed). 
C) has a comparative advantage in producing pecans. 
D) All of the above are correct.

Question 8

The price of sugar that prevails in international markets is called the

Accepted Answer

A) export price of sugar. 
B) import price of sugar. 
C) comparative-advantage price of sugar. 
D) world price of sugar. 
A) export price of sugar. 
B) import price of sugar. 
C) comparative-advantage price of sugar. 
D) world price of sugar.

Question 9

Figure 9-15  
-Refer to Figure 9-15. With the tariff, the quantity of saddles imported is

Accepted Answer

A) Q3 - Q1. 
B) Q3 - Q2. 
C) Q4 - Q1. 
D) Q4 - Q2. 
A) Q3 - Q1. 
B) Q3 - Q2. 
C) Q4 - Q1. 
D) Q4 - Q2.

Question 10

Figure 9-10. The figure applies to Mexico and the good is rifles.  
-Refer to Figure 9-10. The area bounded by the points (Q0, P0), (Q2, P1), and (Q1, P1) represents

Accepted Answer

A) Mexico's gains from trade. 
B) the amount by which Mexico's gain in producer surplus exceeds its loss in consumer surplus due to trade. 
C) Mexico's loss in total surplus due to trade. 
D) All of the above are correct. 
A) Mexico's gains from trade. 
B) the amount by which Mexico's gain in producer surplus exceeds its loss in consumer surplus due to trade. 
C) Mexico's loss in total surplus due to trade. 
D) All of the above are correct.

Question 11

A possible outcome of the multilateral approach to free trade is that such an approach can

Accepted Answer

A) win political support when a unilateral approach cannot. 
B) result in more restricted trade than under a unilateral approach, when international negotiations fail. 
C) result in drastic reductions in tariffs for many countries. 
D) All of the above are correct. 
A) win political support when a unilateral approach cannot. 
B) result in more restricted trade than under a unilateral approach, when international negotiations fail. 
C) result in drastic reductions in tariffs for many countries. 
D) All of the above are correct.

Question 12

​If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

Accepted Answer

A) True 
 B)False

Question 13

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. Suppose the country imposes a $5 per unit tariff. If the country allows trade with a tariff, how much is the deadweight loss caused by the tariff?

Accepted Answer

The deadwe

Question 14

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, how much are consumer surplus, producer surplus, and total surplus in this market?

Accepted Answer

Consumer surplus is

Question 15

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

Accepted Answer

A) $640. 
B) $1,280. 
C) $2,560. 
D) $3,840. 
A) $640. 
B) $1,280. 
C) $2,560. 
D) $3,840.

Question 16

The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

Accepted Answer

A) exporting steel and the price per ton in Russia remained at $650. 
B) exporting steel and the price per ton in Russia increased to $1,000. 
C) importing steel and the price per ton in Russia remained at $650. 
D) importing steel and the price per ton in Russia increased to $1,000. 
A) exporting steel and the price per ton in Russia remained at $650. 
B) exporting steel and the price per ton in Russia increased to $1,000. 
C) importing steel and the price per ton in Russia remained at $650. 
D) importing steel and the price per ton in Russia increased to $1,000.

Question 17

If a country is exporting a good, this is because the country has an absolute advantage in the production of that good.​

Accepted Answer

A) True 
 B)False

Question 18

Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 19

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

Accepted Answer

A) True 
 B)False

Question 20

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing rice, exporting steel, and neither importing nor exporting TVs. We can conclude that producer surplus in Aquilonia is now

Accepted Answer

A) higher in the steel market, lower in the rice market, and unchanged in the TV market. 
B) higher in the rice and steel markets, and unchanged in the TV market. 
C) lower in the rice and TV markets, and higher in the steel market. 
D) lower in the rice and steel markets, and the same in the TV market. 
A) higher in the steel market, lower in the rice market, and unchanged in the TV market. 
B) higher in the rice and steel markets, and unchanged in the TV market. 
C) lower in the rice and TV markets, and higher in the steel market. 
D) lower in the rice and steel markets, and the same in the TV market.

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Figure 9-13 -Refer to Figure 9-13. Consumer surplus before trade is

Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

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

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

The price of sugar that prevails in international markets is called the

Figure 9-15 -Refer to Figure 9-15. With the tariff, the quantity of saddles imported is

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The area bounded by the points (Q₀, P₀), (Q₂, P₁), and (Q₁, P₁) represents

A possible outcome of the multilateral approach to free trade is that such an approach can

If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

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, how much are consumer surplus, producer surplus, and total surplus in this market?

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

If a country is exporting a good, this is because the country has an absolute advantage in the production of that good.

Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing rice, exporting steel, and neither importing nor exporting TVs. We can conclude that producer surplus in Aquilonia is now

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

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Figure 9-13 -Refer to Figure 9-13. Consumer surplus before trade is

Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

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

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

The price of sugar that prevails in international markets is called the

Figure 9-15 -Refer to Figure 9-15. With the tariff, the quantity of saddles imported is

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The area bounded by the points (Q0, P0), (Q2, P1), and (Q1, P1) represents

A possible outcome of the multilateral approach to free trade is that such an approach can

​If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

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, how much are consumer surplus, producer surplus, and total surplus in this market?

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

If a country is exporting a good, this is because the country has an absolute advantage in the production of that good.​

Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing rice, exporting steel, and neither importing nor exporting TVs. We can conclude that producer surplus in Aquilonia is now

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

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The area bounded by the points (Q₀, P₀), (Q₂, P₁), and (Q₁, P₁) represents

If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

If a country is exporting a good, this is because the country has an absolute advantage in the production of that good.