Question 1

Figure 9-6
  
-Refer to Figure 9-6.With free trade,what would total surplus increase by

Accepted Answer

A) $60 
B) $75 
C) $120 
D) $145 
A) $60 
B) $75 
C) $120 
D) $145

Question 2

When a country allows trade and becomes an exporter of a good,what is the result

Accepted Answer

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

Question 3

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

Accepted Answer

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

Question 4

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Accepted Answer

A) True 
 B)False

Question 5

Figure 9-6
  
-Refer to Figure 9-6.If this country allows free trade in wagons,how much will consumers gain or lose

Accepted Answer

A) lose by $75 
B) lose by $240 
C) gain by $120 
D) gain by $240 
A) lose by $75 
B) lose by $240 
C) gain by $120 
D) gain by $240

Question 6

Which of the following is an argument for restricting trade

Accepted Answer

A) Trade restrictions make all Canadians better off. 
B) Trade restrictions increase economic efficiency. 
C) Trade restrictions are necessary for economic growth. 
D) Trade restrictions are necessary to protect infant industries. 
A) Trade restrictions make all Canadians better off. 
B) Trade restrictions increase economic efficiency. 
C) Trade restrictions are necessary for economic growth. 
D) Trade restrictions are necessary to protect infant industries.

Question 7

What does it mean for a country if the world price of a product is higher than its domestic price

Accepted Answer

A) The country should import that product. 
B) The country should no longer produce that product. 
C) The country has a comparative advantage in that product. 
D) The country could benefit by imposing a tariff on that product. 
A) The country should import that product. 
B) The country should no longer produce that product. 
C) The country has a comparative advantage in that product. 
D) The country could benefit by imposing a tariff on that product.

Question 8

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 9

Figure 9-12
  
-Refer to Figure 9-12.As a result of the tariff,what would deadweight loss be

Accepted Answer

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

Question 10

Which of the following is an argument for restricting trade

Accepted Answer

A) Trade restrictions make all Canadians better off. 
B) Trade restrictions increase economic efficiency. 
C) Trade restrictions are necessary for economic growth. 
D) Trade restrictions are sometimes necessary for national security. 
A) Trade restrictions make all Canadians better off. 
B) Trade restrictions increase economic efficiency. 
C) Trade restrictions are necessary for economic growth. 
D) Trade restrictions are sometimes necessary for national security.

Question 11

When a country allows trade and becomes an importer of a good,who is better off

Accepted Answer

A) Both domestic producers and domestic consumers are better off. 
B) Domestic producers are better off, and domestic consumers are worse off. 
C) Domestic producers are worse off, and domestic consumers are better off. 
D) Both domestic producers and domestic consumers are worse off. 
A) Both domestic producers and domestic consumers are better off. 
B) Domestic producers are better off, and domestic consumers are worse off. 
C) Domestic producers are worse off, and domestic consumers are better off. 
D) Both domestic producers and domestic consumers are worse off.

Question 12

Figure 9-11
  
-Refer to Figure 9-11.Before the tariff is imposed,what is government revenue

Accepted Answer

A) $0 
B) $200 
C) $400 
D) $600 
A) $0 
B) $200 
C) $400 
D) $600

Question 13

How do many economists feel about protecting infant industries

Accepted Answer

A) Protection is necessary in order for young industries to compete against foreign companies. 
B) Protection is not necessary for an industry to grow. 
C) Protection is necessary because if young industries are not protected, they may suffer losses. 
D) Protection may not always be necessary for infant industries, but it has proven to be useful in most cases. 
A) Protection is necessary in order for young industries to compete against foreign companies. 
B) Protection is not necessary for an industry to grow. 
C) Protection is necessary because if young industries are not protected, they may suffer losses. 
D) Protection may not always be necessary for infant industries, but it has proven to be useful in most cases.

Question 14

Since World War II,what reduction in the average tariff has GATT achieved among member countries

Accepted Answer

A) from about 20 percent to about 10 percent 
B) from about 40 percent to about 5 percent 
C) from about 40 percent to about 20 percent 
D) from about 80 percent to about 20 percent 
A) from about 20 percent to about 10 percent 
B) from about 40 percent to about 5 percent 
C) from about 40 percent to about 20 percent 
D) from about 80 percent to about 20 percent

Question 15

Figure 9-10
  
-Refer to Figure 9-10.What would be domestic production and domestic consumption,respectively,after trade

Accepted Answer

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

Question 16

When Ford and General Motors import automobile parts from Mexico at prices below those they must pay in Canada,who is worse off

Accepted Answer

A) Workers who assemble Ford and General Motors vehicles become worse off. 
B) Canadian consumers, taken as a group, become worse off. 
C) Mexican consumers, taken as a group, become worse off. 
D) Canadian companies that manufacture automobile parts become worse off. 
A) Workers who assemble Ford and General Motors vehicles become worse off. 
B) Canadian consumers, taken as a group, become worse off. 
C) Mexican consumers, taken as a group, become worse off. 
D) Canadian companies that manufacture automobile parts become worse off.

Question 17

Figure 9-8
  
-Figure 9-8 shows the domestic market for solar panels in Germany.What would be the price of solar panels and the quantity demanded in Germany after trade

Accepted Answer

A) P₀, Q₀ 
B) P₁, Q₀ 
C) P₁, Q₂ 
D) P₂, Q₂ 
A) P₀, Q₀ 
B) P₁, Q₀ 
C) P₁, Q₂ 
D) P₂, Q₂

Question 18

China produces shoes at a lower cost than Canada. As a result, most of the shoes purchased in Canada are made in China. Should this be a concern to anyone in Canada? If so, who should be concerned and why? If not, why not?

Accepted Answer

As a result of the free trade between Ca

Question 19

Figure 9-9
  
-Refer to Figure 9-9.What is producer surplus plus consumer surplus in this market after trade

Accepted Answer

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

Question 20

Import tariffs cause the quantity of imports to fall.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Figure 9-6 -Refer to Figure 9-6.With free trade,what would total surplus increase by

When a country allows trade and becomes an exporter of a good,what is the result

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

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Figure 9-6 -Refer to Figure 9-6.If this country allows free trade in wagons,how much will consumers gain or lose

Which of the following is an argument for restricting trade

What does it mean for a country if the world price of a product is higher than its domestic price

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.

Figure 9-12 -Refer to Figure 9-12.As a result of the tariff,what would deadweight loss be

Which of the following is an argument for restricting trade

When a country allows trade and becomes an importer of a good,who is better off

Figure 9-11 -Refer to Figure 9-11.Before the tariff is imposed,what is government revenue

How do many economists feel about protecting infant industries

Since World War II,what reduction in the average tariff has GATT achieved among member countries

Figure 9-10 -Refer to Figure 9-10.What would be domestic production and domestic consumption,respectively,after trade

When Ford and General Motors import automobile parts from Mexico at prices below those they must pay in Canada,who is worse off

Figure 9-8 -Figure 9-8 shows the domestic market for solar panels in Germany.What would be the price of solar panels and the quantity demanded in Germany after trade

China produces shoes at a lower cost than Canada. As a result, most of the shoes purchased in Canada are made in China. Should this be a concern to anyone in Canada? If so, who should be concerned and why? If not, why not?

Figure 9-9 -Refer to Figure 9-9.What is producer surplus plus consumer surplus in this market after trade

Import tariffs 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 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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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