Exam 9: Application: International Trade

Zelzar 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. Which groups in Zelzar are better off as a result of the new free-trade policy?

For any country, if the world price of zinc is higher than the domestic price of zinc without trade, that country should

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

The "unfair-competition" argument might be cited by an American who believes that

Scenario 9-2 For a small country called Boxland, the equation of the domestic demand curve for cardboard is $Q ^ { D } = 200 - 2 P$ , 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 $Q ^ { S } = - 60 + 3 P$ , 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 Boxland's gains from international trade in cardboard amount to

After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.

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.

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for Welsh producer surplus with trade?

Figure 9-5 -Refer to Figure 9-5. With trade, total surplus is

Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs. An economist would argue that

Suppose the United States exports cars to Switzerland and imports cheese from France. This situation suggests

Finland allows trade with the rest of the world. We can determine whether Finland has a comparative advantage in producing pork if we

Figure 9-15 -Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are

Figure 9-17 -Refer to Figure 9-17. When the country moves from free trade to trade and a tariff, consumer surplus

When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy, the result was that the country began to import automobiles. The change in policy improved the well-being of that nation in the sense that

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that

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?