Question 1

When a country allows international trade and becomes an importer of a good,

Accepted Answer

A)  domestic producers of the good become better off. 
B)  domestic consumers of the good become worse off. 
C)  the gains of the winners exceed the losses of the losers. 
D)  All of the above are correct. 
A)  domestic producers of the good become better off. 
B)  domestic consumers of the good become worse off. 
C)  the gains of the winners exceed the losses of the losers. 
D)  All of the above are correct.

Question 2

If the United States imports televisions and the U.S.government imposes a tariff on televisions,then

Accepted Answer

A)  total surplus in the American television market decreases. 
B)  producer surplus in the American television market increases. 
C)  U.S. imports of foreign televisions decrease. 
D)  All of the above are correct. 
A)  total surplus in the American television market decreases. 
B)  producer surplus in the American television market increases. 
C)  U.S. imports of foreign televisions decrease. 
D)  All of the above are correct.

Question 3

Figure 9-9
  
-Refer to Figure 9-9.Producer surplus in this market after 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 4

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 5

Figure 9-13
  
-Refer to Figure 9-13.Consumer surplus before trade is

Accepted Answer

A)  $1,600. 
B)  $2,400. 
C)  $3,200. 
D)  $3,600. 
A)  $1,600. 
B)  $2,400. 
C)  $3,200. 
D)  $3,600.

Question 6

When a country allows trade and becomes an importer of bottled water,which of the following is not a consequence?

Accepted Answer

A)  The gains of domestic consumers of bottled water exceed the losses of domestic producers of bottled water. 
B)  The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water. 
C)  The price paid by domestic consumers of bottled water decreases. 
D)  The price received by domestic producers of bottled water decreases. 
A)  The gains of domestic consumers of bottled water exceed the losses of domestic producers of bottled water. 
B)  The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water. 
C)  The price paid by domestic consumers of bottled water decreases. 
D)  The price received by domestic producers of bottled water decreases.

Question 7

In a December 2007 New York Times column,Paul Krugman noted that

Accepted Answer

A)  it is difficult to find instances of trade between high-wage countries in the modern era. 
B)  it is difficult to find instances of trade between high-wage countries and low-wage countries in the modern era. 
C)  the United States now imports more oil and other raw materials from other advanced countries than from the third world. 
D)  the United States now imports more manufactured goods from the third world than from other advanced countries. 
A)  it is difficult to find instances of trade between high-wage countries in the modern era. 
B)  it is difficult to find instances of trade between high-wage countries and low-wage countries in the modern era. 
C)  the United States now imports more oil and other raw materials from other advanced countries than from the third world. 
D)  the United States now imports more manufactured goods from the third world than from other advanced countries.

Question 8

Figure 9-1
The figure illustrates the market for wool in Scotland.
  
-Refer to Figure 9-1.In the absence of trade,total surplus in the Scotland wool market amounts to

Accepted Answer

A)  187.5 
B)  275.0 
C)  378.5 
D)  412.5 
A)  187.5 
B)  275.0 
C)  378.5 
D)  412.5

Question 9

Since World War II,GATT has been responsible for reducing the average tariff among member countries from about

Accepted Answer

A)  40 percent to about 5 percent. 
B)  40 percent to about 20 percent. 
C)  80 percent to about 20 percent. 
D)  20 percent to about 10 percent. 
A)  40 percent to about 5 percent. 
B)  40 percent to about 20 percent. 
C)  80 percent to about 20 percent. 
D)  20 percent to about 10 percent.

Question 10

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 United States

Accepted Answer

A)  will become an importer of peaches. 
B)  will become an exporter of peaches. 
C)  may become either an importer or an exporter of peaches, but this cannot be determined. 
D)  will experience increases in both consumer surplus and producer surplus. 
A)  will become an importer of peaches. 
B)  will become an exporter of peaches. 
C)  may become either an importer or an exporter of peaches, but this cannot be determined. 
D)  will experience increases in both consumer surplus and producer surplus.

Question 11

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Accepted Answer

A) True 
 B)False

Question 12

In analyzing the gains and losses from international trade,to say that Moldova is a small country is to say that

Accepted Answer

A)  Moldova can only import goods; it cannot export goods. 
B)  Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C)  only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D)  Moldova is a price taker. 
A)  Moldova can only import goods; it cannot export goods. 
B)  Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C)  only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D)  Moldova is a price taker.

Question 13

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 $3,then the policy change results in a

Accepted Answer

A)  $15.00 decrease in producer surplus. 
B)  $45.00 increase in consumer surplus. 
C)  $20.00 increase in total surplus. 
D)  $12.50 increase in total surplus. 
A)  $15.00 decrease in producer surplus. 
B)  $45.00 increase in consumer surplus. 
C)  $20.00 increase in total surplus. 
D)  $12.50 increase in total surplus.

Question 14

Figure 9-1
The figure illustrates the market for wool in Scotland.
  
-Refer to Figure 9-1.When trade in wool is allowed,consumer surplus in Scotland

Accepted Answer

A)  increases by the area B + D. 
B)  increases by the area C + F. 
C)  decreases by the area B + D. 
D)  decreases by the area D + G. 
A)  increases by the area B + D. 
B)  increases by the area C + F. 
C)  decreases by the area B + D. 
D)  decreases by the area D + G.

Question 15

Figure 9-17
  
-Refer to Figure 9-17.With free trade,the country imports

Accepted Answer

A)  16 units of the good. 
B)  24 units of the good. 
C)  60 units of the good. 
D)  64 units of the good. 
A)  16 units of the good. 
B)  24 units of the good. 
C)  60 units of the good. 
D)  64 units of the good.

Question 16

Figure 9-20
The figure illustrates the market for rice in Vietnam.
  
-Refer to Figure 9-20.From the figure it is apparent that

Accepted Answer

A)  Vietnam will experience a shortage of rice if trade is not allowed. 
B)  Vietnam will experience a surplus of rice if trade is not allowed. 
C)  Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
D)  foreign countries have a comparative advantage in producing rice, relative to Vietnam. 
A)  Vietnam will experience a shortage of rice if trade is not allowed. 
B)  Vietnam will experience a surplus of rice if trade is not allowed. 
C)  Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
D)  foreign countries have a comparative advantage in producing rice, relative to Vietnam.

Question 17

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 18

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 19

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

Accepted Answer

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

Question 20

In the market for apples in a certain country,consumer surplus increases and total surplus increases when that country

Accepted Answer

A)  abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of apples. 
B)  abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of apples. 
C)  abandons a free-trade policy, adopts a no-trade policy, and becomes an importer of apples. 
D)  abandons a free-trade policy, adopts a no-trade policy, and becomes an exporter of apples. 
A)  abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of apples. 
B)  abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of apples. 
C)  abandons a free-trade policy, adopts a no-trade policy, and becomes an importer of apples. 
D)  abandons a free-trade policy, adopts a no-trade policy, and becomes an exporter of apples.

Exam 9: Application: International Trade.

When a country allows international trade and becomes an importer of a good,

If the United States imports televisions and the U.S.government imposes a tariff on televisions,then

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

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

Figure 9-13 -Refer to Figure 9-13.Consumer surplus before trade is

When a country allows trade and becomes an importer of bottled water,which of the following is not a consequence?

In a December 2007 New York Times column,Paul Krugman noted that

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.In the absence of trade,total surplus in the Scotland wool market amounts to

Since World War II,GATT has been responsible for reducing the average tariff among member countries from about

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 United States

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

In analyzing the gains and losses from international trade,to say that Moldova is a small country is to say that

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.When trade in wool is allowed,consumer surplus in Scotland

Figure 9-17 -Refer to Figure 9-17.With free trade,the country imports

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.From the figure it is apparent that

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

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

In the market for apples in a certain country,consumer surplus increases and total surplus increases when that country

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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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