Question 1

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 2

Which of the following is not a commonly-advanced argument for trade restrictions?

Accepted Answer

A) The jobs argument 
B) The national-security argument 
C) The infant-industry argument 
D) The efficiency argument 
A) The jobs argument 
B) The national-security argument 
C) The infant-industry argument 
D) The efficiency argument

Question 3

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 4

Figure 9-5  
-Refer to Figure 9-5. Producer surplus in this market before trade is

Accepted Answer

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

Question 5

Figure 9-1
​
 Uganda
 
-Refer to Figure 9-1. From the figure it is apparent that

Accepted Answer

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

Question 6

If Honduras were to subsidize the production of wool blankets and sell them in Sweden at artificially low prices, the Swedish economy would be worse off.

Accepted Answer

A) True 
 B)False

Question 7

Figure 9-1
​
 Uganda
 
-Refer to Figure 9-1. With trade, total surplus in the Ugandan coffee market amounts to

Accepted Answer

A) $180.00. 
B) $700.00. 
C) $880.00. 
D) $825.00. 
A) $180.00. 
B) $700.00. 
C) $880.00. 
D) $825.00.

Question 8

Figure 9-10
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 9-10. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how many units will domestic consumers demand and how many units will domestic producers supply?

Accepted Answer

With trade and a tariff, domes

Question 9

Import quotas and tariffs both cause the quantity of imports to fall.

Accepted Answer

A) True 
 B)False

Question 10

Figure 9-3  
-Refer to Figure 9-3. The amount of revenue collected by the government from the tariff is

Accepted Answer

A) $200. 
B) $400. 
C) $300. 
D) $100. 
A) $200. 
B) $400. 
C) $300. 
D) $100.

Question 11

Figure 9-10
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 9-10. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer

Question 12

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Accepted Answer

A) True 
 B)False

Question 13

Figure 9-7
The following diagram shows the domestic demand and domestic supply curves in a market.   ​
-Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Accepted Answer

With trade, consumer surplus f

Question 14

Figure 9-4  
-Refer to Figure 9-4. When the country for which the figure is drawn allows international trade in crude oil,

Accepted Answer

A) consumer surplus for domestic crude oil consumers decreases. 
B) the demand for crude oil by domestic crude oil consumers decreases. 
C) the losses of the domestic losers outweigh the gains of the domestic winners. 
D) domestic crude oil producers sell less crude oil. 
A) consumer surplus for domestic crude oil consumers decreases. 
B) the demand for crude oil by domestic crude oil consumers decreases. 
C) the losses of the domestic losers outweigh the gains of the domestic winners. 
D) domestic crude oil producers sell less crude oil.

Question 15

Assume, for China, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Accepted Answer

A) China has a comparative advantage over other countries and China will import oranges. 
B) China has a comparative advantage over other countries and China will export oranges. 
C) other countries have a comparative advantage over China and China will import oranges. 
D) other countries have a comparative advantage over China and China will export oranges. 
A) China has a comparative advantage over other countries and China will import oranges. 
B) China has a comparative advantage over other countries and China will export oranges. 
C) other countries have a comparative advantage over China and China will import oranges. 
D) other countries have a comparative advantage over China and China will export oranges.

Question 16

Figure 9-4  
-Refer to Figure 9-4. A result of this country allowing international trade in crude oil is as follows:

Accepted Answer

A) The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel. 
B) The effect on the well-being of domestic crude-oil consumers is unclear in that they now buy more crude oil, but at a higher price per barrel. 
C) The effect on the well-being of the country is unclear in that domestic producer surplus increases, while the effect on domestic consumer surplus is unclear. 
D) domestic consumers lose by more than domestic producers gain. 
A) The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel. 
B) The effect on the well-being of domestic crude-oil consumers is unclear in that they now buy more crude oil, but at a higher price per barrel. 
C) The effect on the well-being of the country is unclear in that domestic producer surplus increases, while the effect on domestic consumer surplus is unclear. 
D) domestic consumers lose by more than domestic producers gain.

Question 17

Figure 9-1
​
 Uganda
 
-Refer to Figure 9-1. When trade is allowed,

Accepted Answer

A) Ugandan producers of coffee become better off and Ugandan consumers of coffee become worse off. 
B) Ugandan consumers of coffee become better off and Ugandan producers of coffee become worse off. 
C) both Ugandan producers and consumers of coffee become better off. 
D) both Ugandan producers and consumers of coffee become worse off. 
A) Ugandan producers of coffee become better off and Ugandan consumers of coffee become worse off. 
B) Ugandan consumers of coffee become better off and Ugandan producers of coffee become worse off. 
C) both Ugandan producers and consumers of coffee become better off. 
D) both Ugandan producers and consumers of coffee become worse off.

Question 18

Most economists support the infant-industry argument because it is so easy to implement in practice.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-4  
-Refer to Figure 9-4. Producer surplus in this market before trade is

Accepted Answer

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

Question 20

Figure 9-5  
-Spain is an importer of computer chips, taking the world price of $10 per chip as given. Suppose Spain imposes a $5 tariff on chips. Which of the following outcomes is possible?

Accepted Answer

A) Spanish consumers of chips lose and Spanish producers of chips gain. 
B) Fewer Spanish-produced chips are sold in Spain. 
C) Spanish consumers and producers of chips gain. 
D) Total surplus in the Spanish chip market increases. 
A) Spanish consumers of chips lose and Spanish producers of chips gain. 
B) Fewer Spanish-produced chips are sold in Spain. 
C) Spanish consumers and producers of chips gain. 
D) Total surplus in the Spanish chip market increases.

Exam 9: Application: International Trade

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

Which of the following is not a commonly-advanced argument for trade restrictions?

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.

Figure 9-5 -Refer to Figure 9-5. Producer surplus in this market before trade is

Figure 9-1 ​ Uganda -Refer to Figure 9-1. From the figure it is apparent that

If Honduras were to subsidize the production of wool blankets and sell them in Sweden at artificially low prices, the Swedish economy would be worse off.

Figure 9-1 ​ Uganda -Refer to Figure 9-1. With trade, total surplus in the Ugandan coffee market amounts to

Import quotas and tariffs both cause the quantity of imports to fall.

Figure 9-3 -Refer to Figure 9-3. The amount of revenue collected by the government from the tariff is

Figure 9-10 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 9-10. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. ​ -Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Figure 9-4 -Refer to Figure 9-4. When the country for which the figure is drawn allows international trade in crude oil,

Assume, for China, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Figure 9-4 -Refer to Figure 9-4. A result of this country allowing international trade in crude oil is as follows:

Figure 9-1 ​ Uganda -Refer to Figure 9-1. When trade is allowed,

Most economists support the infant-industry argument because it is so easy to implement in practice.

Figure 9-4 -Refer to Figure 9-4. Producer surplus in this market before trade is

Figure 9-5 -Spain is an importer of computer chips, taking the world price of $10 per chip as given. Suppose Spain imposes a $5 tariff on chips. Which of the following outcomes is possible?

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

Applications: 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

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Figure 9-1 Uganda -Refer to Figure 9-1. From the figure it is apparent that

Figure 9-1 Uganda -Refer to Figure 9-1. With trade, total surplus in the Ugandan coffee market amounts to

Figure 9-10 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 9-10. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Figure 9-1 Uganda -Refer to Figure 9-1. When trade is allowed,