Question 1

When the nation of Worldova allows trade and becomes an exporter of silk,

Accepted Answer

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

Question 2

In September 2009,China took steps toward imposing tariffs on American exports of

Accepted Answer

A)  automotive products and chicken in response to President Obama's decision to impose tariffs on toys imported from China. 
B)  airplanes and beef in response to President Obama's decision to impose tariffs on toys imported from China. 
C)  automotive products and chicken in response to President Obama's decision to impose tariffs on tires imported from China. 
D)  airplanes and beef in response to President Obama's decision to impose tariffs on tires imported from China. 
A)  automotive products and chicken in response to President Obama's decision to impose tariffs on toys imported from China. 
B)  airplanes and beef in response to President Obama's decision to impose tariffs on toys imported from China. 
C)  automotive products and chicken in response to President Obama's decision to impose tariffs on tires imported from China. 
D)  airplanes and beef in response to President Obama's decision to impose tariffs on tires imported from China.

Question 3

A tariff on a product makes

Accepted Answer

A)  domestic sellers better off and domestic buyers worse off. 
B)  domestic sellers worse off and domestic buyers worse off. 
C)  domestic sellers better off and domestic buyers better off. 
D)  domestic sellers worse off and domestic buyers better off. 
A)  domestic sellers better off and domestic buyers worse off. 
B)  domestic sellers worse off and domestic buyers worse off. 
C)  domestic sellers better off and domestic buyers better off. 
D)  domestic sellers worse off and domestic buyers better off.

Question 4

Figure 9-2
  
-Refer to Figure 9-2.This country

Accepted Answer

A)  has a comparative advantage in baskets. 
B)  should export baskets. 
C)  is a price taker in the world economy. 
D)  All of the above are correct. 
A)  has a comparative advantage in baskets. 
B)  should export baskets. 
C)  is a price taker in the world economy. 
D)  All of the above are correct.

Question 5

Figure 9-6
  
-Refer to Figure 9-6.When the tariff is imposed,domestic consumers

Accepted Answer

A)  lose by $500. 
B)  lose by $900. 
C)  gain by $500. 
D)  gain by $900. 
A)  lose by $500. 
B)  lose by $900. 
C)  gain by $500. 
D)  gain by $900.

Question 6

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world.When it ends its trade restrictions,it discovers that it is importing incense,exporting steel,and neither importing nor exporting rugs.We can conclude that Aquilonia's new free-trade policy has

Accepted Answer

A)  increased consumer surplus and producer surplus in the incense market. 
B)  increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. 
C)  decreased consumer surplus in both the steel and rug markets. 
D)  decreased consumer surplus in the steel market and increased total surplus in the incense market. 
A)  increased consumer surplus and producer surplus in the incense market. 
B)  increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. 
C)  decreased consumer surplus in both the steel and rug markets. 
D)  decreased consumer surplus in the steel market and increased total surplus in the incense market.

Question 7

Figure 9-10. The figure applies to Mexico and the good is rifles.
  
-Refer to Figure 9-10.With trade,the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Accepted Answer

A)  P1 and Q1. 
B)  P1 and Q2. 
C)  P2 and Q2. 
D)  P0 and Q0. 
A)  P1 and Q1. 
B)  P1 and Q2. 
C)  P2 and Q2. 
D)  P0 and Q0.

Question 8

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

Accepted Answer

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

Question 9

Figure 9-3. The domestic country is China.
  
-Refer to Figure 9-3.Relative to a no-trade situation,which of the following comes with trade?

Accepted Answer

A)  Consumer surplus increases by $1,800 and producer surplus increases by $1,600. 
B)  Consumer surplus decreases by $1,000 and producer surplus increases by $1,500. 
C)  Consumer surplus decreases by $1,000 and producer surplus increases by $1,750. 
D)  Total surplus increases by $400. 
A)  Consumer surplus increases by $1,800 and producer surplus increases by $1,600. 
B)  Consumer surplus decreases by $1,000 and producer surplus increases by $1,500. 
C)  Consumer surplus decreases by $1,000 and producer surplus increases by $1,750. 
D)  Total surplus increases by $400.

Question 10

Which of the following tools and concepts is useful in the analysis of international trade?

Accepted Answer

A)  total surplus 
B)  domestic supply 
C)  equilibrium price 
D)  All of the above are correct. 
A)  total surplus 
B)  domestic supply 
C)  equilibrium price 
D)  All of the above are correct.

Question 11

Suppose a country begins to allow international trade in steel.Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel?

Accepted Answer

A)  The sum of consumer surplus and producer surplus for domestic traders of steel increases. 
B)  The quantity of steel demanded by domestic consumers increases. 
C)  Domestic producers of steel receive a higher price for steel. 
D)  The losses of the losers exceed the gains of the winners. 
A)  The sum of consumer surplus and producer surplus for domestic traders of steel increases. 
B)  The quantity of steel demanded by domestic consumers increases. 
C)  Domestic producers of steel receive a higher price for steel. 
D)  The losses of the losers exceed the gains of the winners.

Question 12

For a given country,comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

Accepted Answer

A) True 
 B)False

Question 13

In 2001,the U.S.agreed to support China's entry into the World Trade Organization.Under a special "safeguard provision" of that agreement,American companies or workers harmed by imports from China can ask the government for protection by demonstrating that

Accepted Answer

A)  imports from China pose a hazard to the health of American citizens. 
B)  China is competing unfairly or selling its products at less than their true cost. 
C)  products that are allegedly "made in China" are actually made in a different country. 
D)  American producers have suffered a "market disruption" or a "surge" in imports from China. 
A)  imports from China pose a hazard to the health of American citizens. 
B)  China is competing unfairly or selling its products at less than their true cost. 
C)  products that are allegedly "made in China" are actually made in a different country. 
D)  American producers have suffered a "market disruption" or a "surge" in imports from China.

Question 14

The rules established under GATT are enforced by the

Accepted Answer

A)  governments of the nations that are involved in GATT. 
B)  North American Free Trade Association. 
C)  World Trade Organization. 
D)  European Union. 
A)  governments of the nations that are involved in GATT. 
B)  North American Free Trade Association. 
C)  World Trade Organization. 
D)  European Union.

Question 15

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Accepted Answer

A)  People face tradeoffs. 
B)  Trade can make everyone better off. 
C)  Governments can sometimes improve market outcomes. 
D)  Prices rise when the government prints too much money. 
A)  People face tradeoffs. 
B)  Trade can make everyone better off. 
C)  Governments can sometimes improve market outcomes. 
D)  Prices rise when the government prints too much money.

Question 16

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

Accepted Answer

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

Question 17

Figure 9-4. The domestic country is Nicaragua.
  
-Refer to Figure 9-4.With trade,Nicaragua

Accepted Answer

A)  imports 150 calculators. 
B)  imports 250 calculators. 
C)  exports 100 calculators. 
D)  exports 250 calculators. 
A)  imports 150 calculators. 
B)  imports 250 calculators. 
C)  exports 100 calculators. 
D)  exports 250 calculators.

Question 18

Figure 9-17
  
-Refer to Figure 9-17.Relative to the free-trade outcome,the imposition of the tariff

Accepted Answer

A)  decreases imports of the good by 16 units and increases domestic production of the good by 8 units. 
B)  decreases imports of the good by 16 units and increases domestic production of the good by 16 units. 
C)  decreases imports of the good by 24 units and increases domestic production of the good by 8 units. 
D)  decreases imports of the good by 24 units and increases domestic production of the good by 24 units. 
A)  decreases imports of the good by 16 units and increases domestic production of the good by 8 units. 
B)  decreases imports of the good by 16 units and increases domestic production of the good by 16 units. 
C)  decreases imports of the good by 24 units and increases domestic production of the good by 8 units. 
D)  decreases imports of the good by 24 units and increases domestic production of the good by 24 units.

Question 19

Which of the following assertions is not correct about the multilateral approach to free trade?

Accepted Answer

A)  The multilateral approach has the potential to result in freer trade than does the unilateral approach. 
B)  The multilateral approach may have a political advantage over the unilateral approach. 
C)  The multilateral approach is simpler than the unilateral approach. 
D)  NAFTA and GATT both represent multilateral approaches to free trade. 
A)  The multilateral approach has the potential to result in freer trade than does the unilateral approach. 
B)  The multilateral approach may have a political advantage over the unilateral approach. 
C)  The multilateral approach is simpler than the unilateral approach. 
D)  NAFTA and GATT both represent multilateral approaches to free trade.

Question 20

A tariff on a product

Accepted Answer

A)  enhances the economic well-being of the domestic economy. 
B)  increases the domestic quantity supplied. 
C)  increases the domestic quantity demanded. 
D)  results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus. 
A)  enhances the economic well-being of the domestic economy. 
B)  increases the domestic quantity supplied. 
C)  increases the domestic quantity demanded. 
D)  results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.

Exam 9: Application: International Trade.

When the nation of Worldova allows trade and becomes an exporter of silk,

In September 2009,China took steps toward imposing tariffs on American exports of

A tariff on a product makes

Figure 9-2 -Refer to Figure 9-2.This country

Figure 9-6 -Refer to Figure 9-6.When the tariff is imposed,domestic consumers

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world.When it ends its trade restrictions,it discovers that it is importing incense,exporting steel,and neither importing nor exporting rugs.We can conclude that Aquilonia's new free-trade policy has

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.With trade,the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

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

Figure 9-3. The domestic country is China. -Refer to Figure 9-3.Relative to a no-trade situation,which of the following comes with trade?

Which of the following tools and concepts is useful in the analysis of international trade?

Suppose a country begins to allow international trade in steel.Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel?

For a given country,comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

In 2001,the U.S.agreed to support China's entry into the World Trade Organization.Under a special "safeguard provision" of that agreement,American companies or workers harmed by imports from China can ask the government for protection by demonstrating that

The rules established under GATT are enforced by the

With which of the Ten Principles of Economics is the study of international trade most closely connected?

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

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4.With trade,Nicaragua

Figure 9-17 -Refer to Figure 9-17.Relative to the free-trade outcome,the imposition of the tariff

Which of the following assertions is not correct about the multilateral approach to free trade?

A tariff on a product

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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