Question 1

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

Accepted Answer

A)  Total surplus in the domestic country falls. 
B)  Producer surplus in the domestic country increases. 
C)  The domestic country experiences a deadweight loss. 
D)  Revenue is raised for the domestic government. 
A)  Total surplus in the domestic country falls. 
B)  Producer surplus in the domestic country increases. 
C)  The domestic country experiences a deadweight loss. 
D)  Revenue is raised for the domestic government.

Question 2

Figure 9-3. The domestic country is China.
  
-Refer to Figure 9-3.With trade,producer surplus in China is

Accepted Answer

A)  $800. 
B)  $1,200. 
C)  $1,800. 
D)  $2,700. 
A)  $800. 
B)  $1,200. 
C)  $1,800. 
D)  $2,700.

Question 3

Free trade causes job losses in industries in which a country does not have a comparative advantage,but it also causes job gains in industries in which the country has a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 4

When a country that imports shoes imposes a tariff on shoes,buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Accepted Answer

A) True 
 B)False

Question 5

Figure 9-20
The figure illustrates the market for rice in Vietnam.
  
-Refer to Figure 9-20.Vietnam's gains from trade in rice amount to

Accepted Answer

A)  750. 
B)  1,000. 
C)  1,250. 
D)  1,500. 
A)  750. 
B)  1,000. 
C)  1,250. 
D)  1,500.

Question 6

The world price of a ton of steel is $1,000.Before Russia allowed trade in steel,the price of a ton of steel there was $650.Once Russia allowed trade in steel with other countries,Russia began

Accepted Answer

A)  exporting steel and the price per ton in Russia remained at $650. 
B)  exporting steel and the price per ton in Russia increased to $1,000. 
C)  importing steel and the price per ton in Russia remained at $650. 
D)  importing steel and the price per ton in Russia increased to $1,000. 
A)  exporting steel and the price per ton in Russia remained at $650. 
B)  exporting steel and the price per ton in Russia increased to $1,000. 
C)  importing steel and the price per ton in Russia remained at $650. 
D)  importing steel and the price per ton in Russia increased to $1,000.

Question 7

Trade enhances the economic well-being of a nation in the sense that

Accepted Answer

A)  both domestic producers and domestic consumers of a good become better off with trade, regardless of whether the nation imports or exports the good in question. 
B)  the gains of domestic producers of a good exceed the losses of domestic consumers of a good, regardless of whether the nation imports or exports the good in question. 
C)  trade results in an increase in total surplus. 
D)  trade puts downward pressure on the prices of all goods. 
A)  both domestic producers and domestic consumers of a good become better off with trade, regardless of whether the nation imports or exports the good in question. 
B)  the gains of domestic producers of a good exceed the losses of domestic consumers of a good, regardless of whether the nation imports or exports the good in question. 
C)  trade results in an increase in total surplus. 
D)  trade puts downward pressure on the prices of all goods.

Question 8

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.
  
-Refer to Figure 9-16.The tariff

Accepted Answer

A)  decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B)  increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C)  creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D)  increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F. 
A)  decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B)  increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C)  creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D)  increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

Question 9

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,consumer surplus in the textile market amounts to

Accepted Answer

A)  $210. 
B)  $320. 
C)  $405. 
D)  $910. 
A)  $210. 
B)  $320. 
C)  $405. 
D)  $910.

Question 10

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars.
  
-Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

Accepted Answer

A)  is represented by the area A + B + C. 
B)  is represented by the area A + B + D. 
C)  is smaller than producer surplus without international trade in cars. 
D)  is larger than total surplus without international trade in cars. 
A)  is represented by the area A + B + C. 
B)  is represented by the area A + B + D. 
C)  is smaller than producer surplus without international trade in cars. 
D)  is larger than total surplus without international trade in cars.

Question 11

Figure 9-11
  
-Refer to Figure 9-11.Consumer surplus in this market after trade is

Accepted Answer

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

Question 12

NAFTA is an example of a multilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Question 13

Figure 9-13
  
-Refer to Figure 9-13.With trade,domestic production and domestic consumption,respectively,are

Accepted Answer

A)  600 and 600. 
B)  600 and 300. 
C)  300 and 900. 
D)  600 and 900. 
A)  600 and 600. 
B)  600 and 300. 
C)  300 and 900. 
D)  600 and 900.

Question 14

If the world price of sugar is lower than Brazil's domestic price of sugar without trade,then Brazil

Accepted Answer

A)  should import sugar. 
B)  has a comparative advantage in sugar. 
C)  should produce just enough sugar to satisfy domestic demand. 
D)  should produce no sugar domestically. 
A)  should import sugar. 
B)  has a comparative advantage in sugar. 
C)  should produce just enough sugar to satisfy domestic demand. 
D)  should produce no sugar domestically.

Question 15

Domestic producers of a good become better off,and domestic consumers of a good become worse 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)  other countries have a comparative advantage, relative to the country in question, 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)  other countries have a comparative advantage, relative to the country in question, in producing the good. 
D)  total surplus does not change as a result.

Question 16

What is the fundamental basis for trade among nations?

Accepted Answer

A)  shortages or surpluses in nations that do not trade 
B)  misguided economic policies 
C)  absolute advantage 
D)  comparative advantage 
A)  shortages or surpluses in nations that do not trade 
B)  misguided economic policies 
C)  absolute advantage 
D)  comparative advantage

Question 17

Figure 9-12
  
-Refer to Figure 9-12.With trade,domestic production and domestic consumption,respectively,are

Accepted Answer

A)  600 and 400. 
B)  800 and 400. 
C)  400 and 600. 
D)  400 and 800. 
A)  600 and 400. 
B)  800 and 400. 
C)  400 and 600. 
D)  400 and 800.

Question 18

Figure 9-5
  
-Refer to Figure 9-5.Total surplus with trade exceeds total surplus without trade by

Accepted Answer

A)  $60. 
B)  $75. 
C)  $135. 
D)  $210. 
A)  $60. 
B)  $75. 
C)  $135. 
D)  $210.

Question 19

A common argument in favor of restricting international trade in good x is based on the premise that

Accepted Answer

A)  international trade reduces total surplus in countries that export good x. 
B)  international trade reduces total surplus in countries that import good x. 
C)  international trade is desirable only when countries with different domestic supplies of natural resources play by different rules when trading with one another. 
D)  trade restrictions can be useful when one country bargains with its trading partners. 
A)  international trade reduces total surplus in countries that export good x. 
B)  international trade reduces total surplus in countries that import good x. 
C)  international trade is desirable only when countries with different domestic supplies of natural resources play by different rules when trading with one another. 
D)  trade restrictions can be useful when one country bargains with its trading partners.

Question 20

Figure 9-15
  
-Refer to Figure 9-15.With the tariff,the domestic price and domestic quantity demanded are

Accepted Answer

A)  P1 and Q1. 
B)  P1 and Q4. 
C)  P2 and Q2. 
D)  P2 and Q3. 
A)  P1 and Q1. 
B)  P1 and Q4. 
C)  P2 and Q2. 
D)  P2 and Q3.

Exam 9: Application: International Trade.

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

Figure 9-3. The domestic country is China. -Refer to Figure 9-3.With trade,producer surplus in China is

Free trade causes job losses in industries in which a country does not have a comparative advantage,but it also causes job gains in industries in which the country has a comparative advantage.

When a country that imports shoes imposes a tariff on shoes,buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.Vietnam's gains from trade in rice amount to

The world price of a ton of steel is $1,000.Before Russia allowed trade in steel,the price of a ton of steel there was $650.Once Russia allowed trade in steel with other countries,Russia began

Trade enhances the economic well-being of a nation in the sense that

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16.The tariff

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,consumer surplus in the textile market amounts to

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

Figure 9-11 -Refer to Figure 9-11.Consumer surplus in this market after trade is

NAFTA is an example of a multilateral approach to achieving free trade.

Figure 9-13 -Refer to Figure 9-13.With trade,domestic production and domestic consumption,respectively,are

If the world price of sugar is lower than Brazil's domestic price of sugar without trade,then Brazil

Domestic producers of a good become better off,and domestic consumers of a good become worse off,when a country begins allowing international trade in that good and

What is the fundamental basis for trade among nations?

Figure 9-12 -Refer to Figure 9-12.With trade,domestic production and domestic consumption,respectively,are

Figure 9-5 -Refer to Figure 9-5.Total surplus with trade exceeds total surplus without trade by

A common argument in favor of restricting international trade in good x is based on the premise that

Figure 9-15 -Refer to Figure 9-15.With the tariff,the domestic price and domestic quantity demanded are

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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