Question 1

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.

Question 2

Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners.
  
-Refer to Figure 9-9.Kenya's gains from trade are represented by the area that is bounded by the points

Accepted Answer

A) (0, P₀), (Q₀, P₀), (Q₂, P₁), and (0, P₁). 
B) (0, P₁), (0, P₂), (Q₀, P₀), and (Q₁, P₁). 
C) (Q₀, P₀), (Q₂, P₁), and (Q₁, P₁). 
D) (0, P₀), (0, P₂), and (Q₀, P₀). 
A) (0, P₀), (Q₀, P₀), (Q₂, P₁), and (0, P₁). 
B) (0, P₁), (0, P₂), (Q₀, P₀), and (Q₁, P₁). 
C) (Q₀, P₀), (Q₂, P₁), and (Q₁, P₁). 
D) (0, P₀), (0, P₂), and (Q₀, P₀).

Question 3

The before-trade price of fish in Greece is $3.00 per pound.The world price of fish is $5.00 per pound.Greece is a price-taker in the fish market.If Greece begins to allow trade in fish,its consumers of fish will become

Accepted Answer

A) better off, its producers of fish will become better off, and on balance the citizens of Greece will become better off. 
B) worse off, its producers of fish will become better off, and on balance the citizens of Greece will become better off. 
C) worse off, its producers of fish will become better off, and on balance the citizens of Greece will become worse off. 
D) better off, its producers of fish will become worse off, and on balance the citizens of Greece will become worse off. 
A) better off, its producers of fish will become better off, and on balance the citizens of Greece will become better off. 
B) worse off, its producers of fish will become better off, and on balance the citizens of Greece will become better off. 
C) worse off, its producers of fish will become better off, and on balance the citizens of Greece will become worse off. 
D) better off, its producers of fish will become worse off, and on balance the citizens of Greece will become worse off.

Question 4

Figure 9-11
  
-Refer to Figure 9-11.Consumer surplus before trade is

Accepted Answer

A) $1,600. 
B) $2,400. 
C) $3,200. 
D) $3,600. 
A) $1,600. 
B) $2,400. 
C) $3,200. 
D) $3,600.

Question 5

Which of the following is not a commonly-advanced argument for trade restrictions?

Accepted Answer

A) the jobs argument 
B) the national-security argument 
C) the infant-industry argument 
D) the efficiency argument 
A) the jobs argument 
B) the national-security argument 
C) the infant-industry argument 
D) the efficiency argument

Question 6

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 7

Scenario 9-1
The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market.
-Refer to Scenario 9-1.If trade in tomatoes is allowed,the price of tomatoes in the United States

Accepted Answer

A) will increase, and this will cause consumer surplus to decrease. 
B) will decrease, and this will cause consumer surplus to increase. 
C) will be unaffected, and consumer surplus will be unaffected as well. 
D) could increase or decrease or be unaffected; this cannot be determined. 
A) will increase, and this will cause consumer surplus to decrease. 
B) will decrease, and this will cause consumer surplus to increase. 
C) will be unaffected, and consumer surplus will be unaffected as well. 
D) could increase or decrease or be unaffected; this cannot be determined.

Question 8

Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars.
  
-Refer to Figure 9-7.The country for which the figure is drawn

Accepted Answer

A) has a comparative advantage relative to other countries in the production of cars and it will export cars. 
B) has a comparative advantage relative to other countries in the production of cars and it will import cars. 
C) has a comparative disadvantage relative to other countries in the production of cars and it will export cars. 
D) has a comparative disadvantage relative to other countries in the production of cars and it will import cars. 
A) has a comparative advantage relative to other countries in the production of cars and it will export cars. 
B) has a comparative advantage relative to other countries in the production of cars and it will import cars. 
C) has a comparative disadvantage relative to other countries in the production of cars and it will export cars. 
D) has a comparative disadvantage relative to other countries in the production of cars and it will import cars.

Question 9

Figure 9-14
  
-Refer to Figure 9-14.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.

Question 10

Which of the following statements is true?

Accepted Answer

A) Free trade benefits a country when it exports but harms it when it imports. 
B) "Voluntary" limits on Canadian exports of hogs are better for the United States than U.S.tariffs placed on Canadian hog exports. 
C) Tariffs and quotas differ in that tariffs work like a tax and therefore impose deadweight losses, whereas quotas do not impose deadweight losses. 
D) Free trade benefits a country both when it exports and when it imports. 
A) Free trade benefits a country when it exports but harms it when it imports. 
B) "Voluntary" limits on Canadian exports of hogs are better for the United States than U.S.tariffs placed on Canadian hog exports. 
C) Tariffs and quotas differ in that tariffs work like a tax and therefore impose deadweight losses, whereas quotas do not impose deadweight losses. 
D) Free trade benefits a country both when it exports and when it imports.

Question 11

Figure 9-15. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.
  
-Refer to Figure 9-15.Government revenue raised by the tariff is represented by the area

Accepted Answer

A) E. 
B) B + E. 
C) D + E + F. 
D) B + D + E + F. 
A) E. 
B) B + E. 
C) D + E + F. 
D) B + D + E + F.

Question 12

Figure 9-11
  
-Refer to Figure 9-11.With trade,the domestic price and domestic quantity demanded are

Accepted Answer

A) $18 and 400. 
B) $18 and 800. 
C) $14 and 400. 
D) $14 and 600. 
A) $18 and 400. 
B) $18 and 800. 
C) $14 and 400. 
D) $14 and 600.

Question 13

Figure 9-12
  
-Refer to Figure 9-12.With trade,the country

Accepted Answer

A) exports 200 units of the good. 
B) exports 400 units of the good. 
C) imports 400 units of the good. 
D) imports 600 units of the good. 
A) exports 200 units of the good. 
B) exports 400 units of the good. 
C) imports 400 units of the good. 
D) imports 600 units of the good.

Question 14

The world price of a pound of T-bone steak is $9.00.Before Guatemala allowed trade in beef,the price of a pound of T-bone steak there was $12.00.Once Guatemala began allowing trade in beef with other countries,Guatemala began

Accepted Answer

A) exporting T-bone steak and the price per pound in Guatemala remained at $12.00. 
B) exporting T-bone steak and the price per pound in Guatemala decreased to $9.00. 
C) importing T-bone steak and the price per pound in Guatemala remained at $12.00. 
D) importing T-bone steak and the price per pound in Guatemala decreased to $9.00. 
A) exporting T-bone steak and the price per pound in Guatemala remained at $12.00. 
B) exporting T-bone steak and the price per pound in Guatemala decreased to $9.00. 
C) importing T-bone steak and the price per pound in Guatemala remained at $12.00. 
D) importing T-bone steak and the price per pound in Guatemala decreased to $9.00.

Question 15

Scenario 9-1
The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market.
-Refer to Scenario 9-1.If trade in tomatoes is allowed,U.S.producers of tomatoes

Accepted Answer

A) will be better off. 
B) will be worse off. 
C) will be unaffected. 
D) will experience a decrease in their collective producer surplus. 
A) will be better off. 
B) will be worse off. 
C) will be unaffected. 
D) will experience a decrease in their collective producer surplus.

Question 16

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 are both 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 are both multilateral approaches to free trade.

Question 17

Figure 9-4
  
-Refer to Figure 9-4.Without trade,producer surplus amounts to

Accepted Answer

A) $210. 
B) $245. 
C) $450. 
D) $455. 
A) $210. 
B) $245. 
C) $450. 
D) $455.

Question 18

Figure 9-10
  
-Refer to Figure 9-10.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 19

Figure 9-4
  
-Refer to Figure 9-4.With trade,consumer surplus is

Accepted Answer

A) $245. 
B) $362.50. 
C) $367.50. 
D) $607.50. 
A) $245. 
B) $362.50. 
C) $367.50. 
D) $607.50.

Question 20

Import quotas and tariffs both cause the quantity of imports to fall.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

A tariff on a product

Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.Kenya's gains from trade are represented by the area that is bounded by the points

The before-trade price of fish in Greece is $3.00 per pound.The world price of fish is $5.00 per pound.Greece is a price-taker in the fish market.If Greece begins to allow trade in fish,its consumers of fish will become

Figure 9-11 -Refer to Figure 9-11.Consumer surplus before trade is

Which of the following is not a commonly-advanced argument for trade restrictions?

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

Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,the price of tomatoes in the United States

Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-7.The country for which the figure is drawn

Figure 9-14 -Refer to Figure 9-14.With the tariff,the domestic price and domestic quantity demanded are

Which of the following statements is true?

Figure 9-15. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-15.Government revenue raised by the tariff is represented by the area

Figure 9-11 -Refer to Figure 9-11.With trade,the domestic price and domestic quantity demanded are

Figure 9-12 -Refer to Figure 9-12.With trade,the country

The world price of a pound of T-bone steak is $9.00.Before Guatemala allowed trade in beef,the price of a pound of T-bone steak there was $12.00.Once Guatemala began allowing trade in beef with other countries,Guatemala began

Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,U.S.producers of tomatoes

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

Figure 9-4 -Refer to Figure 9-4.Without trade,producer surplus amounts to

Figure 9-10 -Refer to Figure 9-10.Consumer surplus in this market after trade is

Figure 9-4 -Refer to Figure 9-4.With trade,consumer surplus is

Import quotas and tariffs both cause the quantity of imports to fall.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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