Exam 9: Application: International Trade.

Suppose the Ivory Coast,a small country,imports wheat at the world price of $4 per bushel.If the Ivory Coast imposes a tariff of $1 per bushel on imported wheat,then,other things equal,the price of wheat in Ivory Coast will increase,but by less than $1.

Figure 9-5 -Refer to Figure 9-5.With trade,total surplus is

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

Economists view free trade as a way to raise living standards both at home and abroad.

Using the graph,assume that the government imposes a $1 tariff on hammers.Answer the following questions given this information. a.What is the domestic price and quantity demanded of hammers after the tariff is imposed? b.What is the quantity of hammers imported before the tariff? c.What is the quantity of hammers imported after the tariff? d.What would be the amount of consumer surplus before the tariff? e.What would be the amount of consumer surplus after the tariff? f.What would be the amount of producer surplus before the tariff? g.What would be the amount of producer surplus after the tariff? h.What would be the amount of government revenue because of the tariff? i.What would be the total amount of deadweight loss due to the tariff?

For any country,if the world price of zinc is higher than the domestic price of zinc without trade,that country should

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

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

Suppose the United States exports cars to Canada and imports bananas from Mexico.This situation suggests

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

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,the country for which the figure is drawn will

The principle of comparative advantage asserts that

Figure 9-2 -Refer to Figure 9-2.Without trade,producer surplus is

Suppose the United States exports cars to Switzerland and imports cheese from France.This situation suggests

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

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

President Bush imposed temporary tariffs on imported steel in 2002.The reasons for this trade restriction is most consistent with the

If Argentina exports oranges to the rest of the world,Argentina's producers of oranges are worse off,and Argentina's consumers of oranges are better off,as a result of trade.

Figure 9-6 -Refer to Figure 9-6.The amount of deadweight loss caused by the tariff equals