Question 1

Figure 9-6  
-Refer to Figure 9-6. The size of the tariff on carnations is

Accepted Answer

A) $8 per dozen. 
B) $6 per dozen. 
C) $4 per dozen. 
D) $2 per dozen. 
A) $8 per dozen. 
B) $6 per dozen. 
C) $4 per dozen. 
D) $2 per dozen.

Question 2

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Accepted Answer

A) True 
 B)False

Question 3

Scenario 9-2
For a small country called Boxland, the equation of the domestic demand curve for cardboard is
S1U1B1 S1U1B0
S1U1B1 S1U1B0
 $Q ^ { D } = 200 - 2 P$ ,
where $Q ^ { D }$ represents the domestic quantity of cardboard demanded, in tons, and $P$ represents the price of a ton of cardboard.For Boxland, the equation of the domestic supply curve for cardboard is
S1U1B1 S1U1B0
S1U1B1 S1U1B0
 $Q ^ { S } = - 60 + 3 P$ ,
where $Q ^ { s }$ represents the domestic quantity of cardboard supplied, in tons, and $P$ again represents the price of a ton of cardboard.
-Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?

Accepted Answer

A) It increases consumer surplus, decreases producer surplus, and increases total surplus. 
B) It increases consumer surplus, increases producer surplus, and increases total surplus. 
C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. 
D) It decreases consumer surplus, increases producer surplus, and increases total surplus. 
A) It increases consumer surplus, decreases producer surplus, and increases total surplus. 
B) It increases consumer surplus, increases producer surplus, and increases total surplus. 
C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. 
D) It decreases consumer surplus, increases producer surplus, and increases total surplus.

Question 4

Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?

Accepted Answer

A) The price of paper in Republica decreased as a result of the policy change. 
B) Republica began exporting paper as a result of the policy change. 
C) The domestic demand curve for paper shifted to the right as a result of the policy change. 
D) The domestic quantity of paper demanded increased as a result of the policy change. 
A) The price of paper in Republica decreased as a result of the policy change. 
B) Republica began exporting paper as a result of the policy change. 
C) The domestic demand curve for paper shifted to the right as a result of the policy change. 
D) The domestic quantity of paper demanded increased as a result of the policy change.

Question 5

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Accepted Answer

A) China and North Korea 
B) Chile and South Korea 
C) Russia and Japan 
D) the United States and Mexico 
A) China and North Korea 
B) Chile and South Korea 
C) Russia and Japan 
D) the United States and Mexico

Question 6

Scenario 9-2
For a small country called Boxland, the equation of the domestic demand curve for cardboard is
S1U1B1 S1U1B0
S1U1B1 S1U1B0
 $Q ^ { D } = 200 - 2 P$ ,
where $Q ^ { D }$ represents the domestic quantity of cardboard demanded, in tons, and $P$ represents the price of a ton of cardboard.For Boxland, the equation of the domestic supply curve for cardboard is
S1U1B1 S1U1B0
S1U1B1 S1U1B0
 $Q ^ { S } = - 60 + 3 P$ ,
where $Q ^ { s }$ represents the domestic quantity of cardboard supplied, in tons, and $P$ again represents the price of a ton of cardboard.
-Refer to Scenario 9-2. Suppose the world price of cardboard is $45 and international trade is allowed. Then Boxland's consumers demand

Accepted Answer

A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard.

Question 7

Figure 9-13  
-Refer to Figure 9-13. 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 8

When a country that imports a particular good imposes a tariff on that good,

Accepted Answer

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

Question 9

Figure 9-5  
-Refer to Figure 9-5. If this country allows free trade in wagons,

Accepted Answer

A) consumers will gain and producers will lose. 
B) consumers will lose and producers will gain. 
C) both consumers and producers will gain. 
D) both consumers and producers will lose. 
A) consumers will gain and producers will lose. 
B) consumers will lose and producers will gain. 
C) both consumers and producers will gain. 
D) both consumers and producers will lose.

Question 10

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 11

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 12

Figure 9-2  
-Refer to Figure 9-2. The world price for baskets represents

Accepted Answer

A) the demand for baskets from the rest of the world. 
B) the supply of baskets from the rest of the world. 
C) the level of inefficiency in the domestic market caused by trade. 
D) the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage. 
A) the demand for baskets from the rest of the world. 
B) the supply of baskets from the rest of the world. 
C) the level of inefficiency in the domestic market caused by trade. 
D) the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage.

Question 13

Honduras is an importer of goose-down pillows. The world price of these pillows is $50. Honduras imposes a $7 tariff on pillows. Honduras is a price-taker in the pillow market. As a result of the tariff, the price of goose-down pillows in Honduras

Accepted Answer

A) remains at $50 and the quantity of goose-down pillows purchased in Honduras decreases. 
B) increases to $57 and the quantity of goose-down pillows purchased in Honduras decreases. 
C) increases to a new price between $50 and $57 and the quantity of goose-down pillows purchased in Honduras decreases. 
D) increases to a new price above $57 and the quantity of goose-down pillows purchased in Honduras remains the same. 
A) remains at $50 and the quantity of goose-down pillows purchased in Honduras decreases. 
B) increases to $57 and the quantity of goose-down pillows purchased in Honduras decreases. 
C) increases to a new price between $50 and $57 and the quantity of goose-down pillows purchased in Honduras decreases. 
D) increases to a new price above $57 and the quantity of goose-down pillows purchased in Honduras remains the same.

Question 14

Figure 9-17  
-Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to

Accepted Answer

A) $400. 
B) $600. 
C) $750. 
D) $1,000. 
A) $400. 
B) $600. 
C) $750. 
D) $1,000.

Question 15

Assume, for Singapore, that the domestic price of soybeans without international trade is higher than the world price of soybeans. This suggests that, in the production of soybeans,

Accepted Answer

A) Singapore has a comparative advantage over other countries and Singapore will import soybeans. 
B) Singapore has a comparative advantage over other countries and Singapore will export soybeans. 
C) other countries have a comparative advantage over Singapore and Singapore will import soybeans. 
D) other countries have a comparative advantage over Singapore and Singapore will export soybeans. 
A) Singapore has a comparative advantage over other countries and Singapore will import soybeans. 
B) Singapore has a comparative advantage over other countries and Singapore will export soybeans. 
C) other countries have a comparative advantage over Singapore and Singapore will import soybeans. 
D) other countries have a comparative advantage over Singapore and Singapore will export soybeans.

Question 16

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

Accepted Answer

A) 187.5 
B) 275.0 
C) 378.5 
D) 412.5 
A) 187.5 
B) 275.0 
C) 378.5 
D) 412.5

Question 17

"Owners of firms in young industries should be willing to incur temporary losses if they believe that those firms will be profitable in the long run." This observation helps to explain why many economists are skeptical about the

Accepted Answer

A) national-security argument. 
B) infant-industry argument. 
C) unfair-competition argument. 
D) jobs argument. 
A) national-security argument. 
B) infant-industry argument. 
C) unfair-competition argument. 
D) jobs argument.

Question 18

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 19

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

Accepted Answer

A) True 
 B)False

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

Figure 9-6 -Refer to Figure 9-6. The size of the tariff on carnations is

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Figure 9-13 -Refer to Figure 9-13. With trade, the country

When a country that imports a particular good imposes a tariff on that good,

Figure 9-5 -Refer to Figure 9-5. If this country allows free trade in wagons,

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

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

Figure 9-2 -Refer to Figure 9-2. The world price for baskets represents

Honduras is an importer of goose-down pillows. The world price of these pillows is $50. Honduras imposes a $7 tariff on pillows. Honduras is a price-taker in the pillow market. As a result of the tariff, the price of goose-down pillows in Honduras

Figure 9-17 -Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to

Assume, for Singapore, that the domestic price of soybeans without international trade is higher than the world price of soybeans. This suggests that, in the production of soybeans,

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

"Owners of firms in young industries should be willing to incur temporary losses if they believe that those firms will be profitable in the long run." This observation helps to explain why many economists are skeptical about the

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

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

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

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 Macroeconomic Models

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

Six Debates Over Macroeconomic Policy

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