Question 1

Figure 9-1
The figure illustrates the market for coffee in Guatemala.  
-Refer to Figure 9-1. From the figure it is apparent that

Accepted Answer

A) Guatemala will export coffee if trade is allowed. 
B) Guatemala will import coffee if trade is allowed. 
C) Guatemala has nothing to gain either by importing or exporting coffee. 
D) the world price will fall if Guatemala begins to allow its citizens to trade with other countries. 
A) Guatemala will export coffee if trade is allowed. 
B) Guatemala will import coffee if trade is allowed. 
C) Guatemala has nothing to gain either by importing or exporting coffee. 
D) the world price will fall if Guatemala begins to allow its citizens to trade with other countries.

Question 2

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles.  
-Refer to Figure 9-19. With free trade, consumer surplus in the textile market amounts to

Accepted Answer

A) $210. 
B) $320. 
C) $405. 
D) $910. 
A) $210. 
B) $320. 
C) $405. 
D) $910.

Question 3

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

Accepted Answer

A) 2,000 units of rice and their producer surplus will be 4,000. 
B) 2,000 units of rice and their producer surplus will be 7,500. 
C) 3,000 units of rice and their producer surplus will be 7,500. 
D) 3,000 units of rice and their producer surplus will be 9,000. 
A) 2,000 units of rice and their producer surplus will be 4,000. 
B) 2,000 units of rice and their producer surplus will be 7,500. 
C) 3,000 units of rice and their producer surplus will be 7,500. 
D) 3,000 units of rice and their producer surplus will be 9,000.

Question 4

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 consumer surplus exceeds its loss in producer surplus due to trade. 
C) Mexico's gain 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 consumer surplus exceeds its loss in producer surplus due to trade. 
C) Mexico's gain in total surplus due to trade. 
D) All of the above are correct.

Question 5

Figure 9-13  
-Refer to Figure 9-13. With trade, domestic production and domestic consumption, respectively, are

Accepted Answer

A) 600 and 600. 
B) 600 and 300. 
C) 300 and 900. 
D) 600 and 900. 
A) 600 and 600. 
B) 600 and 300. 
C) 300 and 900. 
D) 600 and 900.

Question 6

Figure 9-15  
-Refer to Figure 9-15. For the saddle market, area B represents

Accepted Answer

A) government's revenue from the tariff. 
B) the deadweight loss of the tariff. 
C) the increase in producer surplus, relative to the free-trade situation, as a result of the tariff. 
D) None of the above is correct. 
A) government's revenue from the tariff. 
B) the deadweight loss of the tariff. 
C) the increase in producer surplus, relative to the free-trade situation, as a result of the tariff. 
D) None of the above is correct.

Question 7

Most economists view the United States as an ongoing experiment that raises serious doubts about the virtues of free trade.

Accepted Answer

A) True 
 B)False

Question 8

The greater the elasticities of supply and demand, the smaller are the gains from trade.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) gain $100 of producer surplus. 
B) gain $150 of producer surplus. 
C) gain $200 of producer surplus. 
D) gain $300 of producer surplus. 
A) gain $100 of producer surplus. 
B) gain $150 of producer surplus. 
C) gain $200 of producer surplus. 
D) gain $300 of producer surplus.

Question 10

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. In the country for which the figure is drawn, total surplus with international trade in cars

Accepted Answer

A) is represented by the area A + B + C. 
B) is represented by the area A + B + D. 
C) is smaller than producer surplus without international trade in cars. 
D) is larger than total surplus without international trade in cars. 
A) is represented by the area A + B + C. 
B) is represented by the area A + B + D. 
C) is smaller than producer surplus without international trade in cars. 
D) is larger than total surplus without international trade in cars.

Question 11

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Accepted Answer

A) True 
 B)False

Question 12

Figure 9-3. The domestic country is China.  
-Refer to Figure 9-3. If China were to abandon a no-trade policy in favor of a free-trade policy,

Accepted Answer

A) Chinese producers of pencil sharpeners would become worse off. 
B) Chinese consumers of pencil sharpeners would become better off. 
C) total surplus in the Chinese economy would increase. 
D) All of the above are correct. 
A) Chinese producers of pencil sharpeners would become worse off. 
B) Chinese consumers of pencil sharpeners would become better off. 
C) total surplus in the Chinese economy would increase. 
D) All of the above are correct.

Question 13

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.  
-Refer to Figure 9-16. The tariff

Accepted Answer

A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B) increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F. 
A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B) increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

Question 14

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

Accepted Answer

A) Brownland became an exporter of wheat. 
B) consumer surplus in Brownland increased by $3 million. 
C) the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left. 
D) this example is inconsistent with the economic theory of international trade. 
A) Brownland became an exporter of wheat. 
B) consumer surplus in Brownland increased by $3 million. 
C) the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left. 
D) this example is inconsistent with the economic theory of international trade.

Question 15

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.  
-Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

Accepted Answer

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

Question 16

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, how much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer

Question 17

Figure 9-11  
-Refer to Figure 9-11. Consumer surplus in this market after trade is

Accepted Answer

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

Question 18

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. With trade, producer surplus is

Accepted Answer

A) $500. 
B) $1,000. 
C) $1,500. 
D) $2,000. 
A) $500. 
B) $1,000. 
C) $1,500. 
D) $2,000.

Question 19

Figure 9-20
The figure illustrates the market for rice in Vietnam.  
-Refer to Figure 9-20. In the absence of trade, total surplus in the Vietnamese rice market amounts to

Accepted Answer

A) 9,250. 
B) 10,000. 
C) 12,000. 
D) 13,000. 
A) 9,250. 
B) 10,000. 
C) 12,000. 
D) 13,000.

Question 20

Figure 9-12  
-Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

Accepted Answer

A) $54 and 800. 
B) $54 and 1,600. 
C) $42 and 800. 
D) $42 and 1,200. 
A) $54 and 800. 
B) $54 and 1,600. 
C) $42 and 800. 
D) $42 and 1,200.

Exam 9: Application: International Trade

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19. With free trade, consumer surplus in the textile market amounts to

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

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

Figure 9-13 -Refer to Figure 9-13. With trade, domestic production and domestic consumption, respectively, are

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area B represents

Most economists view the United States as an ongoing experiment that raises serious doubts about the virtues of free trade.

The greater the elasticities of supply and demand, the smaller are the gains from trade.

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

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. In the country for which the figure is drawn, total surplus with international trade in cars

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. If China were to abandon a no-trade policy in favor of a free-trade policy,

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The tariff

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

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, how much are consumer surplus, producer surplus, and total surplus with trade?

Figure 9-11 -Refer to Figure 9-11. Consumer surplus in this market after trade is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, producer surplus is

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. In the absence of trade, total surplus in the Vietnamese rice market amounts to

Figure 9-12 -Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

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