Question 1

Graph 9-6
This graph refers to the market for oil in Spain.  
-According to Graph 9-6, the change in total surplus in Spain because of trade would be:

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 2

Most economists argue that international trade increases social welfare.What are some of the other benefits of international trade?

Accepted Answer

Apart from an increase in consumer or pr

Question 3

Graph 9-9  
-In Graph 9-9, producer surplus after the tariff would be:

Accepted Answer

A) G 
B) C + G 
C) A + C + G 
D) A + B + C + G 
A) G 
B) C + G 
C) A + C + G 
D) A + B + C + G

Question 4

Graph 9-9  
-In Graph 9-9, as a result of the tariff, deadweight loss would be:

Accepted Answer

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

Question 5

Graph 9-1
This graph refers to the market for beef in Japan.  
-According to Graph 9-1, if the world price rose to $6 and trade in beef is allowed, the price of beef in Japan will be:

Accepted Answer

A) $5 per pound 
B) $2 per pound 
C) between $2 per pound and $5 per pound 
D) $6 per pound 
A) $5 per pound 
B) $2 per pound 
C) between $2 per pound and $5 per pound 
D) $6 per pound

Question 6

Australia is considering whether it should import palm oil from Indonesia.If the Australian government is only interested in increasing consumer surplus, what factors should it take into account when deciding whether to import the palm oil?

Accepted Answer

Australia should import the palm oil if

Question 7

The Closer Economic Relations agreement between New Zealand and Australia is designed to ensure that Australia can exercise its absolute advantage.

Accepted Answer

A) True 
 B)False

Question 8

When a country allows trade and becomes an exporter of a good, consumer surplus:

Accepted Answer

A) and producer surplus will increase 
B) and producer surplus will decrease 
C) will increase and producer surplus will decrease 
D) will decrease and producer surplus will increase 
A) and producer surplus will increase 
B) and producer surplus will decrease 
C) will increase and producer surplus will decrease 
D) will decrease and producer surplus will increase

Question 9

The decrease in total surplus that results from a tariff or quota is called the gains from trade.

Accepted Answer

A) True 
 B)False

Question 10

If the price of torches in Estonia is $100 and the world price is $150, how would producer surplus change if Estonia opened to world trade?

Accepted Answer

A) it would rise by $50 
B) it would rise by more than consumer surplus would fall 
C) it wouldn't change but consumer surplus would rise 
D) it would change by the same amount as consumer surplus 
A) it would rise by $50 
B) it would rise by more than consumer surplus would fall 
C) it wouldn't change but consumer surplus would rise 
D) it would change by the same amount as consumer surplus

Question 11

France imports a lot of snow peas from Africa.This means that France has comparative advantage in producing snow peas.

Accepted Answer

A) True 
 B)False

Question 12

If France has a comparative advantage in producing cheese and it allows trade:

Accepted Answer

A) everyone in the country benefits 
B) everyone in the country loses 
C) the gains of the producers exceed the losses of the consumers 
D) the losses of the consumers exceed the gains of the producers 
A) everyone in the country benefits 
B) everyone in the country loses 
C) the gains of the producers exceed the losses of the consumers 
D) the losses of the consumers exceed the gains of the producers

Question 13

Graph 9-4
This graph refers to the market for kiwifruit in New Zealand.  
-According to Graph 9-4, producer surplus in New Zealand after trade is:

Accepted Answer

A) a 
B) a + b 
C) c + b + d 
D) c 
A) a 
B) a + b 
C) c + b + d 
D) c

Question 14

A quota is:

Accepted Answer

A) a type of tax imposed on imports 
B) a physical limit on the quantity of internationally traded goods 
C) a physical limit on the tax level on internationally traded goods 
D) a tool to encourage imports into a country 
A) a type of tax imposed on imports 
B) a physical limit on the quantity of internationally traded goods 
C) a physical limit on the tax level on internationally traded goods 
D) a tool to encourage imports into a country

Question 15

Graph 9-6
This graph refers to the market for oil in Spain.  
-According to Graph 9-6, consumer surplus in Spain before trade would be:

Accepted Answer

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

Question 16

If the domestic price of a good is low relative to the world price, the country has a comparative advantage in producing that good.

Accepted Answer

A) True 
 B)False

Question 17

Many economists oppose the infant industry argument because it is difficult to remove.

Accepted Answer

A) True 
 B)False

Question 18

Graph 9-9  
-In Graph 9-9, consumer surplus after the tariff would be:

Accepted Answer

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

Question 19

Without free trade, the import price of a good must be equal to the export price of a good.

Accepted Answer

A) True 
 B)False

Question 20

Suppose that China can produce every product at an absolutely lower cost than can Australia.Does it pay for China to trade with Australia? Explain.

Accepted Answer

Since international trade is based on co

Exam 9: Application: International Trade

Graph 9-6 This graph refers to the market for oil in Spain. -According to Graph 9-6, the change in total surplus in Spain because of trade would be:

Most economists argue that international trade increases social welfare.What are some of the other benefits of international trade?

Graph 9-9 -In Graph 9-9, producer surplus after the tariff would be:

Graph 9-9 -In Graph 9-9, as a result of the tariff, deadweight loss would be:

Graph 9-1 This graph refers to the market for beef in Japan. -According to Graph 9-1, if the world price rose to $6 and trade in beef is allowed, the price of beef in Japan will be:

Australia is considering whether it should import palm oil from Indonesia.If the Australian government is only interested in increasing consumer surplus, what factors should it take into account when deciding whether to import the palm oil?

The Closer Economic Relations agreement between New Zealand and Australia is designed to ensure that Australia can exercise its absolute advantage.

When a country allows trade and becomes an exporter of a good, consumer surplus:

The decrease in total surplus that results from a tariff or quota is called the gains from trade.

If the price of torches in Estonia is $100 and the world price is $150, how would producer surplus change if Estonia opened to world trade?

France imports a lot of snow peas from Africa.This means that France has comparative advantage in producing snow peas.

If France has a comparative advantage in producing cheese and it allows trade:

Graph 9-4 This graph refers to the market for kiwifruit in New Zealand. -According to Graph 9-4, producer surplus in New Zealand after trade is:

A quota is:

Graph 9-6 This graph refers to the market for oil in Spain. -According to Graph 9-6, consumer surplus in Spain before trade would be:

If the domestic price of a good is low relative to the world price, the country has a comparative advantage in producing that good.

Many economists oppose the infant industry argument because it is difficult to remove.

Graph 9-9 -In Graph 9-9, consumer surplus after the tariff would be:

Without free trade, the import price of a good must be equal to the export price of a good.

Suppose that China can produce every product at an absolutely lower cost than can Australia.Does it pay for China to trade with Australia? Explain.

Ten Lessons From 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

Business Strategy and Oligopoly

Competition Policy

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

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 Trade-Off Between Inflation and Unemployment

Global Financial Crisis of 2008 and Beyond

Five Debates Over Macroeconomic Policy

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