Question 1

Figure 9-15  
-Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

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 2

When the nation of Worldova allows trade and becomes an exporter of silk,

Accepted Answer

A) residents of Worldova who produce silk become worse off; residents of Worldova who buy silk become better off; and the economic well-being of Worldova rises. 
B) residents of Worldova who produce silk become worse off; residents of Worldova who buy silk become better off; and the economic well-being of Worldova falls. 
C) residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova rises. 
D) residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova falls. 
A) residents of Worldova who produce silk become worse off; residents of Worldova who buy silk become better off; and the economic well-being of Worldova rises. 
B) residents of Worldova who produce silk become worse off; residents of Worldova who buy silk become better off; and the economic well-being of Worldova falls. 
C) residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova rises. 
D) residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova falls.

Question 3

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that

Accepted Answer

A) an import quota has no effect on consumer surplus, while a tariff decreases consumer surplus. 
B) an import quota has no effect on producer surplus, while a tariff decreases producer surplus. 
C) a tariff raises total surplus, while an import quota does not. 
D) a tariff raises revenue for that country's government, while an import quota does not. 
A) an import quota has no effect on consumer surplus, while a tariff decreases consumer surplus. 
B) an import quota has no effect on producer surplus, while a tariff decreases producer surplus. 
C) a tariff raises total surplus, while an import quota does not. 
D) a tariff raises revenue for that country's government, while an import quota does not.

Question 4

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Accepted Answer

A) True 
 B)False

Question 5

If a country allows trade and, for a certain good, the domestic price without trade is lower 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 6

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, the

Accepted Answer

A) price paid by American consumers of peaches is unchanged relative to the no-trade situation. 
B) total well-being of American producers of peaches is diminished relative to the no-trade situation. 
C) total well-being of American consumers of peaches is enhanced relative to the no-trade situation. 
D) total well-being of the United States is enhanced relative to the no-trade situation. 
A) price paid by American consumers of peaches is unchanged relative to the no-trade situation. 
B) total well-being of American producers of peaches is diminished relative to the no-trade situation. 
C) total well-being of American consumers of peaches is enhanced relative to the no-trade situation. 
D) total well-being of the United States is enhanced relative to the no-trade situation.

Question 7

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

Accepted Answer

A) a decrease in consumer surplus. 
B) an increase in producer surplus. 
C) an increase in total surplus. 
D) All of the above are correct. 
A) a decrease in consumer surplus. 
B) an increase in producer surplus. 
C) an increase in total surplus. 
D) All of the above are correct.

Question 8

Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

Accepted Answer

A) Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will export coffee. 
B) Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will import coffee. 
C) other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will export coffee. 
D) other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will import coffee. 
A) Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will export coffee. 
B) Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will import coffee. 
C) other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will export coffee. 
D) other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will import coffee.

Question 9

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Accepted Answer

A) foreign competitors that can produce quality textile goods at low cost. 
B) lower prices of goods that are substitutes for clothing. 
C) a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good. 
D) the fact that the minimum wage in the U.S. has failed to keep pace with the cost of living. 
A) foreign competitors that can produce quality textile goods at low cost. 
B) lower prices of goods that are substitutes for clothing. 
C) a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good. 
D) the fact that the minimum wage in the U.S. has failed to keep pace with the cost of living.

Question 10

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. Suppose the country imposes a $1 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 11

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

Accepted Answer

A) True 
 B)False

Question 12

Figure 9-25
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit.  
-Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The amount of revenue collected by the government from the tariff is

Accepted Answer

A) $50. 
B) $100. 
C) $150. 
D) $200. 
A) $50. 
B) $100. 
C) $150. 
D) $200.

Question 13

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Accepted Answer

A) True 
 B)False

Question 14

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, how many units will domestic consumers demand and how many units will domestic producers produce?

Accepted Answer

With trade, domestic

Question 15

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. The amount of revenue collected by the government from the tariff is

Accepted Answer

A) $6,000. 
B) $9,000. 
C) $12,000. 
D) $15,000. 
A) $6,000. 
B) $9,000. 
C) $12,000. 
D) $15,000.

Question 16

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. Without trade, consumer surplus amounts to

Accepted Answer

A) $810. 
B) $1,620. 
C) $3,240. 
D) $6,480. 
A) $810. 
B) $1,620. 
C) $3,240. 
D) $6,480.

Question 17

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. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much is tariff revenue?

Accepted Answer

With trade

Question 18

A tariff is a

Accepted Answer

A) limit on how much of a good can be exported. 
B) limit on how much of a good can be imported. 
C) tax on an exported good. 
D) tax on an imported good. 
A) limit on how much of a good can be exported. 
B) limit on how much of a good can be imported. 
C) tax on an exported good. 
D) tax on an imported good.

Question 19

Figure 9-1
The figure illustrates the market for coffee in Guatemala.  
-Refer to Figure 9-1. With trade, total surplus in the Guatemalan coffee market amounts to

Accepted Answer

A) 1,250. 
B) 1,468. 
C) 1,870. 
D) 1,980. 
A) 1,250. 
B) 1,468. 
C) 1,870. 
D) 1,980.

Question 20

Figure 9-7. The figure applies to the nation of Wales and the good is cheese.  
-Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

Accepted Answer

A) Gains from trade = (1/2)(P1 - P0)(Q2 - Q1). 
B) Gains from trade = (1/2)(P1 - P0)(Q2 - Q0) 
C) Gains from trade = (1/2)(P1 - P0)(Q1 + Q2). 
D) Gains from trade = (1/2)(Q1)(P3 - P1). 
A) Gains from trade = (1/2)(P1 - P0)(Q2 - Q1). 
B) Gains from trade = (1/2)(P1 - P0)(Q2 - Q0) 
C) Gains from trade = (1/2)(P1 - P0)(Q1 + Q2). 
D) Gains from trade = (1/2)(Q1)(P3 - P1).

Figure 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

When the nation of Worldova allows trade and becomes an exporter of silk,

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

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

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the

Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The amount of revenue collected by the government from the tariff is

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, consumer surplus amounts to

A tariff is a

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. With trade, total surplus in the Guatemalan coffee market amounts to

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

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 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

When the nation of Worldova allows trade and becomes an exporter of silk,

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

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

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the

Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The amount of revenue collected by the government from the tariff is

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, consumer surplus amounts to

A tariff is a

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. With trade, total surplus in the Guatemalan coffee market amounts to

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

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