Question 1

Figure 9-17  
-Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff

Accepted Answer

A) decreases imports of the good by 16 units and increases domestic production of the good by 8 units. 
B) decreases imports of the good by 16 units and increases domestic production of the good by 16 units. 
C) decreases imports of the good by 24 units and increases domestic production of the good by 8 units. 
D) decreases imports of the good by 24 units and increases domestic production of the good by 24 units. 
A) decreases imports of the good by 16 units and increases domestic production of the good by 8 units. 
B) decreases imports of the good by 16 units and increases domestic production of the good by 16 units. 
C) decreases imports of the good by 24 units and increases domestic production of the good by 8 units. 
D) decreases imports of the good by 24 units and increases domestic production of the good by 24 units.

Question 2

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

Accepted Answer

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

Question 3

Figure 9-4. The domestic country is Nicaragua.  
-Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

Accepted Answer

A) $625, and this is an increase in total surplus. 
B) $750, and this is an increase in total surplus. 
C) $625, and this is a decrease in total surplus. 
D) $750, and this is a decrease in total surplus. 
A) $625, and this is an increase in total surplus. 
B) $750, and this is an increase in total surplus. 
C) $625, and this is a decrease in total surplus. 
D) $750, and this is a decrease in total surplus.

Question 4

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 the world price of peaches is $5, then

Accepted Answer

A) producer surplus will be smaller than it would be if Isoland banned trade. 
B) consumer surplus will be smaller than it would be if Isoland banned trade. 
C) the domestic quantity of peaches demanded will exceed the domestic quantity of peaches supplied. 
D) Isoland will be an importer of peaches. 
A) producer surplus will be smaller than it would be if Isoland banned trade. 
B) consumer surplus will be smaller than it would be if Isoland banned trade. 
C) the domestic quantity of peaches demanded will exceed the domestic quantity of peaches supplied. 
D) Isoland will be an importer of peaches.

Question 5

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. Suppose the government imposes a tariff of $20 per unit. Relative to the free-trade outcome, the imposition of the tariff

Accepted Answer

A) decreases imports of the good by 300 units and increases domestic production of the good by 300 units. 
B) decreases imports of the good by 300 units and increases domestic production of the good by 600 units. 
C) decreases imports of the good by 600 units and increases domestic production of the good by 300 units. 
D) decreases imports of the good by 600 units and increases domestic production of the good by 600 units. 
A) decreases imports of the good by 300 units and increases domestic production of the good by 300 units. 
B) decreases imports of the good by 300 units and increases domestic production of the good by 600 units. 
C) decreases imports of the good by 600 units and increases domestic production of the good by 300 units. 
D) decreases imports of the good by 600 units and increases domestic production of the good by 600 units.

Question 6

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

Accepted Answer

A) better off regardless of how Colombia responds. 
B) better off if Colombia removes the subsidies, and will be no worse off if it doesn't. 
C) worse off if Colombia doesn't remove the subsidies in response to the threat. 
D) worse off regardless of how Colombia responds. 
A) better off regardless of how Colombia responds. 
B) better off if Colombia removes the subsidies, and will be no worse off if it doesn't. 
C) worse off if Colombia doesn't remove the subsidies in response to the threat. 
D) worse off regardless of how Colombia responds.

Question 7

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. The country for which the figure is drawn

Accepted Answer

A) has a comparative advantage relative to other countries in the production of cars and it will export cars. 
B) has a comparative advantage relative to other countries in the production of cars and it will import cars. 
C) has a comparative disadvantage relative to other countries in the production of cars and it will export cars. 
D) has a comparative disadvantage relative to other countries in the production of cars and it will import cars. 
A) has a comparative advantage relative to other countries in the production of cars and it will export cars. 
B) has a comparative advantage relative to other countries in the production of cars and it will import cars. 
C) has a comparative disadvantage relative to other countries in the production of cars and it will export cars. 
D) has a comparative disadvantage relative to other countries in the production of cars and it will import cars.

Question 8

Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that

Accepted Answer

A) Spain imports olive oil. 
B) the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed. 
C) consumer surplus in Spain would exceed producer surplus in Spain if trade with other countries were not allowed. 
D) All of the above are correct. 
A) Spain imports olive oil. 
B) the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed. 
C) consumer surplus in Spain would exceed producer surplus in Spain if trade with other countries were not allowed. 
D) All of the above are correct.

Question 9

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

Accepted Answer

A) True 
 B)False

Question 10

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 are consumer surplus, producer surplus, tariff revenue, and total surplus?

Accepted Answer

With trade and a tariff, consu

Question 11

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Accepted Answer

A) True 
 B)False

Question 12

A tariff on a product

Accepted Answer

A) enhances the economic well-being of the domestic economy. 
B) increases the domestic quantity supplied. 
C) increases the domestic quantity demanded. 
D) results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus. 
A) enhances the economic well-being of the domestic economy. 
B) increases the domestic quantity supplied. 
C) increases the domestic quantity demanded. 
D) results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.

Question 13

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Accepted Answer

A) True 
 B)False

Question 14

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S.  
-​Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is

Accepted Answer

A) ​$4800. 
B) ​$2400. 
C) ​$600. 
D) ​$6000. 
A) ​$4800. 
B) ​$2400. 
C) ​$600. 
D) ​$6000.

Question 15

Domestic producers of a good become worse off, and domestic consumers of a good become better 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) the country in question has a comparative advantage, relative to other countries, 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) the country in question has a comparative advantage, relative to other countries, in producing the good. 
D) total surplus does not change as a result.

Question 16

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that

Accepted Answer

A) both consumer surplus and producer surplus increase. 
B) consumer surplus increases and producer surplus decreases. 
C) consumer surplus decreases and producer surplus increases. 
D) both consumer surplus and producer surplus decrease. 
A) both consumer surplus and producer surplus increase. 
B) consumer surplus increases and producer surplus decreases. 
C) consumer surplus decreases and producer surplus increases. 
D) both consumer surplus and producer surplus decrease.

Question 17

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2. Without trade, consumer surplus is

Accepted Answer

A) $423. 
B) $845. 
C) $1,690. 
D) $3,380. 
A) $423. 
B) $845. 
C) $1,690. 
D) $3,380.

Question 18

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

Accepted Answer

With trade and a tariff, consu

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. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

With trade

Question 20

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 $45. Then, relative to the no-trade situation, international trade in cardboard

Accepted Answer

A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. 
B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. 
C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. 
D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. 
A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. 
B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. 
C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. 
D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00.

Figure 9-17 -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff

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

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

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 the world price of peaches is $5, then

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

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. The country for which the figure is drawn

Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

A tariff on a product

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is

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

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, consumer surplus is

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 9-17 -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff

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

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

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 the world price of peaches is $5, then

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

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. The country for which the figure is drawn

Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

A tariff on a product

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -​Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is

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

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, consumer surplus is

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 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is