Question 1

A major difference between tariffs and import quotas is that

Accepted Answer

A)  tariffs create deadweight losses, but import quotas do not. 
B)  tariffs help domestic consumers, and import quotas help domestic producers. 
C)  tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import. 
D)  All of the above are correct. 
A)  tariffs create deadweight losses, but import quotas do not. 
B)  tariffs help domestic consumers, and import quotas help domestic producers. 
C)  tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import. 
D)  All of the above are correct.

Question 2

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

Accepted Answer

A)  both domestic producers and domestic consumers become better off. 
B)  domestic producers become better off, and domestic consumers become worse off. 
C)  domestic producers become worse off, and domestic consumers become better off. 
D)  both domestic producers and domestic consumers become worse off. 
A)  both domestic producers and domestic consumers become better off. 
B)  domestic producers become better off, and domestic consumers become worse off. 
C)  domestic producers become worse off, and domestic consumers become better off. 
D)  both domestic producers and domestic consumers become worse off.

Question 3

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price,then it must be the case that

Accepted Answer

A)  both consumer surplus and producer surplus increase. 
B)  consumer surplus increases and producer surplus decreases. 
C)  consumer surplus decreases and producer surplus increases. 
D)  both consumer surplus and producer surplus decrease. 
A)  both consumer surplus and producer surplus increase. 
B)  consumer surplus increases and producer surplus decreases. 
C)  consumer surplus decreases and producer surplus increases. 
D)  both consumer surplus and producer surplus decrease.

Question 4

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

Accepted Answer

A)  the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good. 
B)  the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good. 
C)  the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good. 
D)  the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good. 
A)  the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good. 
B)  the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good. 
C)  the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good. 
D)  the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good.

Question 5

Figure 9-7. The figure applies to the nation of Wales and the good is cheese.
  
-Refer to Figure 9-7.With trade,Wales

Accepted Answer

A)  imports Q2 - Q1 units of cheese. 
B)  exports Q2 - Q1 units of cheese. 
C)  imports Q2 - Q0 units of cheese. 
D)  exports Q2 - Q0 units of cheese. 
A)  imports Q2 - Q1 units of cheese. 
B)  exports Q2 - Q1 units of cheese. 
C)  imports Q2 - Q0 units of cheese. 
D)  exports Q2 - Q0 units of cheese.

Question 6

Figure 9-15
  
-Refer to Figure 9-15.Producer surplus with trade and without a tariff is

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 7

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

Accepted Answer

A)  312.5. 
B)  367.0. 
C)  467.5. 
D)  495.0. 
A)  312.5. 
B)  367.0. 
C)  467.5. 
D)  495.0.

Question 8

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Accepted Answer

A)  consumer surplus increases and total surplus increases in the market for that good. 
B)  consumer surplus increases and total surplus decreases in the market for that good. 
C)  consumer surplus decreases and total surplus increases in the market for that good. 
D)  consumer surplus decreases and total surplus decreases in the market for that good. 
A)  consumer surplus increases and total surplus increases in the market for that good. 
B)  consumer surplus increases and total surplus decreases in the market for that good. 
C)  consumer surplus decreases and total surplus increases in the market for that good. 
D)  consumer surplus decreases and total surplus decreases in the market for that good.

Question 9

When the nation of Duxembourg allows trade and becomes an importer of software,

Accepted Answer

A)  residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises. 
B)  residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls. 
C)  residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises. 
D)  residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls. 
A)  residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises. 
B)  residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls. 
C)  residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises. 
D)  residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls.

Question 10

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

Accepted Answer

A)  everyone in the country benefits. 
B)  the gains of the winners exceed the losses of the losers. 
C)  the losses of the losers exceed the gains of the winners. 
D)  everyone in the country loses. 
A)  everyone in the country benefits. 
B)  the gains of the winners exceed the losses of the losers. 
C)  the losses of the losers exceed the gains of the winners. 
D)  everyone in the country loses.

Question 11

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter of a particular good,

Accepted Answer

A)  consumer surplus increases and total surplus increases in the market for that good. 
B)  consumer surplus increases and total surplus decreases in the market for that good. 
C)  consumer surplus decreases and total surplus increases in the market for that good. 
D)  consumer surplus decreases and total surplus decreases in the market for that good. 
A)  consumer surplus increases and total surplus increases in the market for that good. 
B)  consumer surplus increases and total surplus decreases in the market for that good. 
C)  consumer surplus decreases and total surplus increases in the market for that good. 
D)  consumer surplus decreases and total surplus decreases in the market for that good.

Question 12

Figure 9-17
  
-Refer to Figure 9-17.The deadweight loss caused by the tariff is

Accepted Answer

A)  $24. 
B)  $72. 
C)  $96. 
D)  $144. 
A)  $24. 
B)  $72. 
C)  $96. 
D)  $144.

Question 13

Figure 9-20
The figure illustrates the market for rice in Vietnam.
  
-Refer to Figure 9-20.With trade,Vietnamese rice producers will produce

Accepted Answer

A)  2,000 units of rice and their producer surplus will be 4,000. 
B)  2,000 units of rice and their producer surplus will be 7,500. 
C)  3,000 units of rice and their producer surplus will be 7,500. 
D)  3,000 units of rice and their producer surplus will be 9,000. 
A)  2,000 units of rice and their producer surplus will be 4,000. 
B)  2,000 units of rice and their producer surplus will be 7,500. 
C)  3,000 units of rice and their producer surplus will be 7,500. 
D)  3,000 units of rice and their producer surplus will be 9,000.

Question 14

Figure 9-6
  
-Refer to Figure 9-6.Before the tariff is imposed,this country

Accepted Answer

A)  imports 200 carnations. 
B)  imports 400 carnations. 
C)  exports 200 carnations. 
D)  exports 400 carnations. 
A)  imports 200 carnations. 
B)  imports 400 carnations. 
C)  exports 200 carnations. 
D)  exports 400 carnations.

Question 15

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

Accepted Answer

A)  if it works consumer surplus will decline. 
B)  if it works producer surplus falls. 
C)  if it fails the country faces a choice between two bad options. 
D)  if it fails total surplus will increase. 
A)  if it works consumer surplus will decline. 
B)  if it works producer surplus falls. 
C)  if it fails the country faces a choice between two bad options. 
D)  if it fails total surplus will increase.

Question 16

By comparing the world price of horseradish to Cropland's domestic price of horseradish,we can determine whether Cropland

Accepted Answer

A)  will export horseradish (assuming trade is allowed). 
B)  will import horseradish (assuming trade is allowed). 
C)  has a comparative advantage in producing horseradish. 
D)  All of the above are correct. 
A)  will export horseradish (assuming trade is allowed). 
B)  will import horseradish (assuming trade is allowed). 
C)  has a comparative advantage in producing horseradish. 
D)  All of the above are correct.

Question 17

William and Jamal live in the country of Dumexia.When Dumexia legalized international trade in bananas,the price of bananas in Dumexia increased.As a result,William became better off and Jamal became worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Accepted Answer

A) True 
 B)False

Question 18

Figure 9-1
The figure illustrates the market for wool in Scotland.
  
-Refer to Figure 9-1.From the figure it is apparent that

Accepted Answer

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

Question 19

Figure 9-12
  
-Refer to Figure 9-12.Producer surplus after trade is

Accepted Answer

A)  $7,000. 
B)  $7,500. 
C)  $8,800. 
D)  $9,600. 
A)  $7,000. 
B)  $7,500. 
C)  $8,800. 
D)  $9,600.

Question 20

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

Accepted Answer

A)  Scotland producers of wool become better off and Scotland consumers of wool become worse off. 
B)  Scotland consumers of wool become better off and Scotland producers of wool become worse off. 
C)  both Scotland producers and consumers of wool become better off. 
D)  both Scotland producers and consumers of wool become worse off. 
A)  Scotland producers of wool become better off and Scotland consumers of wool become worse off. 
B)  Scotland consumers of wool become better off and Scotland producers of wool become worse off. 
C)  both Scotland producers and consumers of wool become better off. 
D)  both Scotland producers and consumers of wool become worse off.

Exam 9: Application: International Trade.

A major difference between tariffs and import quotas is that

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

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price,then it must be the case that

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

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.With trade,Wales

Figure 9-15 -Refer to Figure 9-15.Producer surplus with trade and without a tariff is

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

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

When the nation of Duxembourg allows trade and becomes an importer of software,

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

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter of a particular good,

Figure 9-17 -Refer to Figure 9-17.The deadweight loss caused by the tariff is

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.With trade,Vietnamese rice producers will produce

Figure 9-6 -Refer to Figure 9-6.Before the tariff is imposed,this country

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

By comparing the world price of horseradish to Cropland's domestic price of horseradish,we can determine whether Cropland

William and Jamal live in the country of Dumexia.When Dumexia legalized international trade in bananas,the price of bananas in Dumexia increased.As a result,William became better off and Jamal became worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.From the figure it is apparent that

Figure 9-12 -Refer to Figure 9-12.Producer surplus after trade is

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

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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