Question 1

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

Accepted Answer

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

Question 2

In September 2009,President Obama imposed a 35 percent tariff on

Accepted Answer

A)  tires imported from South Korea. 
B)  tires imported from China. 
C)  automobiles imported from South Korea. 
D)  beef imported from Canada. 
A)  tires imported from South Korea. 
B)  tires imported from China. 
C)  automobiles imported from South Korea. 
D)  beef imported from Canada.

Question 3

When a country takes a unilateral approach to free trade,it

Accepted Answer

A)  removes trade restrictions on its own. 
B)  reduces its trade restrictions while other countries do the same. 
C)  does not remove trade restrictions no matter what other countries do. 
D)  is willing to trade with multiple countries at once. 
A)  removes trade restrictions on its own. 
B)  reduces its trade restrictions while other countries do the same. 
C)  does not remove trade restrictions no matter what other countries do. 
D)  is willing to trade with multiple countries at once.

Question 4

Scenario 9-2
For a small country called Boxland, the equation of the domestic demand curve for cardboard is   
where   represents the domestic quantity of cardboard demanded, in tons, and 
   represents the price of a ton of cardboard.
For Boxland, the equation of the domestic supply curve for cardboard is   
where   represents the domestic quantity of cardboard supplied, in tons, and   again represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $60.Then,if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

Accepted Answer

A)  domestic producers of cardboard become better off and domestic consumers of cardboard become better off. 
B)  domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. 
C)  domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. 
D)  domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. 
A)  domestic producers of cardboard become better off and domestic consumers of cardboard become better off. 
B)  domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. 
C)  domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. 
D)  domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.

Question 5

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Accepted Answer

A)  this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing soybeans. 
C)  the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off. 
D)  All of the above are correct. 
A)  this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing soybeans. 
C)  the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off. 
D)  All of the above are correct.

Question 6

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

Accepted Answer

A)  that country becomes an exporter of pistachios. 
B)  that country has a comparative advantage in producing pistachios. 
C)  at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country. 
D)  All of the above are correct. 
A)  that country becomes an exporter of pistachios. 
B)  that country has a comparative advantage in producing pistachios. 
C)  at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country. 
D)  All of the above are correct.

Question 7

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

Accepted Answer

A)  government's revenue from the tariff. 
B)  producer surplus after the tariff becomes effective. 
C)  the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff. 
D)  the decrease in total surplus, relative to the free-trade situation, as a result of the tariff. 
A)  government's revenue from the tariff. 
B)  producer surplus after the tariff becomes effective. 
C)  the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff. 
D)  the decrease in total surplus, relative to the free-trade situation, as a result of the tariff.

Question 8

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

Accepted Answer

A)  domestic producers become better off, and domestic consumers become worse off. 
B)  domestic producers become worse off, and domestic consumers become better off. 
C)  domestic consumers become better off, but the effect on the well-being of domestic producers is ambiguous. 
D)  domestic producers become worse off, but the effect on the well-being of domestic consumers is ambiguous. 
A)  domestic producers become better off, and domestic consumers become worse off. 
B)  domestic producers become worse off, and domestic consumers become better off. 
C)  domestic consumers become better off, but the effect on the well-being of domestic producers is ambiguous. 
D)  domestic producers become worse off, but the effect on the well-being of domestic consumers is ambiguous.

Question 9

When a country moves away from a free trade position and imposes a tariff on imports,it causes

Accepted Answer

A)  a decrease in total surplus in the market. 
B)  a decrease in producer surplus in the market. 
C)  an increase in consumer surplus in the market. 
D)  a decrease in revenue to the government. 
A)  a decrease in total surplus in the market. 
B)  a decrease in producer surplus in the market. 
C)  an increase in consumer surplus in the market. 
D)  a decrease in revenue to the government.

Question 10

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.If Isoland allows international trade and if the world price of peaches is $3,then

Accepted Answer

A)  Isoland has a comparative advantage, relative to other countries, in producing peaches. 
B)  Isoland will export peaches. 
C)  producer surplus with trade exceeds producer surplus without trade. 
D)  consumer surplus with trade exceeds consumer surplus without trade. 
A)  Isoland has a comparative advantage, relative to other countries, in producing peaches. 
B)  Isoland will export peaches. 
C)  producer surplus with trade exceeds producer surplus without trade. 
D)  consumer surplus with trade exceeds consumer surplus without trade.

Question 11

Without free trade,the domestic price of a good must be equal to the world price of a good.

Accepted Answer

A) True 
 B)False

Question 12

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 13

What are the arguments in favor of trade restrictions,and what are the counterarguments? According to most economists,do any of these arguments really justify trade restrictions? Explain.

Accepted Answer

Arguments mentioned in the text include

Question 14

If Belgium exports chocolate to the rest of the world,then Belgian chocolate producers benefit from higher producer surplus,Belgian chocolate consumers are worse off because of lower consumer surplus,and total surplus in Belgium increases because of the exports of chocolate.

Accepted Answer

A) True 
 B)False

Question 15

When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy,the result was that the country began to import automobiles.The change in policy improved the well-being of that nation in the sense that

Accepted Answer

A)  both producers of automobiles and consumers of automobiles in that nation became better off as a result. 
B)  the gains to automobile producers in that nation exceeded the losses of the automobile consumers in that nation. 
C)  the gains to automobile consumers in that nation exceeded the losses of the automobile producers in that nation. 
D)  even though total surplus in that nation decreased, it was still true that consumer surplus and producer surplus increased. 
A)  both producers of automobiles and consumers of automobiles in that nation became better off as a result. 
B)  the gains to automobile producers in that nation exceeded the losses of the automobile consumers in that nation. 
C)  the gains to automobile consumers in that nation exceeded the losses of the automobile producers in that nation. 
D)  even though total surplus in that nation decreased, it was still true that consumer surplus and producer surplus increased.

Question 16

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Accepted Answer

A) True 
 B)False

Question 17

Scenario 9-2
For a small country called Boxland, the equation of the domestic demand curve for cardboard is   
where   represents the domestic quantity of cardboard demanded, in tons, and 
   represents the price of a ton of cardboard.
For Boxland, the equation of the domestic supply curve for cardboard is   
where   represents the domestic quantity of cardboard supplied, in tons, and   again represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $60.Then,relative to the no-trade situation,international trade in cardboard produces which of the following results for Boxland?

Accepted Answer

A)  It decreases consumer surplus, increases producer surplus, and decreases total surplus. 
B)  It decreases consumer surplus, increases producer surplus, and increases total surplus. 
C)  It decreases consumer surplus, decreases producer surplus, and decreases total surplus. 
D)  It increases consumer surplus, increases producer surplus, and increases total surplus. 
A)  It decreases consumer surplus, increases producer surplus, and decreases total surplus. 
B)  It decreases consumer surplus, increases producer surplus, and increases total surplus. 
C)  It decreases consumer surplus, decreases producer surplus, and decreases total surplus. 
D)  It increases consumer surplus, increases producer surplus, and increases total surplus.

Question 18

Figure 9-5
  
-Refer to Figure 9-5.With trade,this country

Accepted Answer

A)  exports 20 wagons. 
B)  exports 50 wagons. 
C)  imports 30 wagons. 
D)  imports 50 wagons. 
A)  exports 20 wagons. 
B)  exports 50 wagons. 
C)  imports 30 wagons. 
D)  imports 50 wagons.

Question 19

Figure 9-1
The figure illustrates the market for wool in Scotland.
  
-Refer to Figure 9-1.Relative to the no-trade situation,trade with the rest of the world results in

Accepted Answer

A)  Scotland consumers paying a higher price for wool. 
B)  a decrease in producer surplus in Scotland. 
C)  a decrease in total surplus in Scotland. 
D)  All of the above are correct. 
A)  Scotland consumers paying a higher price for wool. 
B)  a decrease in producer surplus in Scotland. 
C)  a decrease in total surplus in Scotland. 
D)  All of the above are correct.

Question 20

The imposition of a tariff on imported wine will increase the domestic price of wine,decrease the quantity of wine imported,and increase the quantity of wine produced domestically.

Accepted Answer

A) True 
 B)False

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

In September 2009,President Obama imposed a 35 percent tariff on

When a country takes a unilateral approach to free trade,it

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

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

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

When a country moves away from a free trade position and imposes a tariff on imports,it causes

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.If Isoland allows international trade and if the world price of peaches is $3,then

Without free trade,the domestic price of a good must be equal to the world price of a good.

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.

What are the arguments in favor of trade restrictions,and what are the counterarguments? According to most economists,do any of these arguments really justify trade restrictions? Explain.

If Belgium exports chocolate to the rest of the world,then Belgian chocolate producers benefit from higher producer surplus,Belgian chocolate consumers are worse off because of lower consumer surplus,and total surplus in Belgium increases because of the exports of chocolate.

When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy,the result was that the country began to import automobiles.The change in policy improved the well-being of that nation in the sense that

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Figure 9-5 -Refer to Figure 9-5.With trade,this country

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.Relative to the no-trade situation,trade with the rest of the world results in

The imposition of a tariff on imported wine will increase the domestic price of wine,decrease the quantity of wine imported,and increase the quantity of wine produced domestically.

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.

Filters

Exam 9: Application: International Trade.

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

In September 2009,President Obama imposed a 35 percent tariff on

When a country takes a unilateral approach to free trade,it

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

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

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

When a country moves away from a free trade position and imposes a tariff on imports,it causes

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.If Isoland allows international trade and if the world price of peaches is $3,then

Without free trade,the domestic price of a good must be equal to the world price of a good.

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.

What are the arguments in favor of trade restrictions,and what are the counterarguments? According to most economists,do any of these arguments really justify trade restrictions? Explain.

If Belgium exports chocolate to the rest of the world,then Belgian chocolate producers benefit from higher producer surplus,Belgian chocolate consumers are worse off because of lower consumer surplus,and total surplus in Belgium increases because of the exports of chocolate.

When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy,the result was that the country began to import automobiles.The change in policy improved the well-being of that nation in the sense that

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Figure 9-5 -Refer to Figure 9-5.With trade,this country

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.Relative to the no-trade situation,trade with the rest of the world results in

The imposition of a tariff on imported wine will increase the domestic price of wine,decrease the quantity of wine imported,and increase the quantity of wine produced domestically.

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.

Filters