Question 1

Figure 9-20
The figure illustrates the market for rice in Vietnam.  
-Refer to Figure 9-20. From the figure it is apparent that

Accepted Answer

A) Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
B) foreign countries have a comparative advantage in producing rice, relative to Vietnam. 
C) Vietnam has an absolute advantage in producing rice, relative to the rest of the world. 
D) foreign countries have an absolute advantage in producing rice, relative to Vietnam. 
A) Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
B) foreign countries have a comparative advantage in producing rice, relative to Vietnam. 
C) Vietnam has an absolute advantage in producing rice, relative to the rest of the world. 
D) foreign countries have an absolute advantage in producing rice, relative to Vietnam.

Question 2

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.  
-Refer to Figure 9-16. The tariff

Accepted Answer

A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B) increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F. 
A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B) increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

Question 3

Figure 9-6  
-Refer to Figure 9-6. Without trade, the equilibrium price of carnations is

Accepted Answer

A) $8 and the equilibrium quantity is 300. 
B) $6 and the equilibrium quantity is 200. 
C) $6 and the equilibrium quantity is 400. 
D) $4 and the equilibrium quantity is 500. 
A) $8 and the equilibrium quantity is 300. 
B) $6 and the equilibrium quantity is 200. 
C) $6 and the equilibrium quantity is 400. 
D) $4 and the equilibrium quantity is 500.

Question 4

Which of the following is not an important question for economic policy raised by the experience of the textile industry?

Accepted Answer

A) How does international trade affect consumer well-being? 
B) Who gains and who loses from free trade among countries? 
C) How do the gains from trade compare to the losses? 
D) Which argument for restricting free trade is politically feasible? 
A) How does international trade affect consumer well-being? 
B) Who gains and who loses from free trade among countries? 
C) How do the gains from trade compare to the losses? 
D) Which argument for restricting free trade is politically feasible?

Question 5

Figure 9-12  
-Refer to Figure 9-12. Consumer surplus after 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 6

When a country allows trade and becomes an importer of a good,

Accepted Answer

A) both domestic producers and domestic consumers become better off. 
B) domestic producers become better off, and domestic consumers become worse off. 
C) domestic producers become worse off, and domestic consumers become better off. 
D) both domestic producers and domestic consumers become worse off. 
A) both domestic producers and domestic consumers become better off. 
B) domestic producers become better off, and domestic consumers become worse off. 
C) domestic producers become worse off, and domestic consumers become better off. 
D) both domestic producers and domestic consumers become worse off.

Question 7

Figure 9-5  
-Refer to Figure 9-5. With trade, the price of wagons in this country is

Accepted Answer

A) $8, with 70 wagons produced in this country, 20 of which are exported. 
B) $8, with 90 wagons produced in this country, 50 of which are exported. 
C) $5, with 40 wagons produced in this country and another 30 wagons imported. 
D) $5, with 40 wagons produced in this country and another 50 wagons imported. 
A) $8, with 70 wagons produced in this country, 20 of which are exported. 
B) $8, with 90 wagons produced in this country, 50 of which are exported. 
C) $5, with 40 wagons produced in this country and another 30 wagons imported. 
D) $5, with 40 wagons produced in this country and another 50 wagons imported.

Question 8

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then

Accepted Answer

A) total surplus in the American television market decreases. 
B) producer surplus in the American television market increases. 
C) U.S. imports of foreign televisions decrease. 
D) All of the above are correct. 
A) total surplus in the American television market decreases. 
B) producer surplus in the American television market increases. 
C) U.S. imports of foreign televisions decrease. 
D) All of the above are correct.

Question 9

Figure 9-3. The domestic country is China.  
-Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is

Accepted Answer

A) $400. 
B) $500. 
C) $600. 
D) $750. 
A) $400. 
B) $500. 
C) $600. 
D) $750.

Question 10

The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Accepted Answer

A) True 
 B)False

Question 11

The world price of cotton is the highest price of cotton observed anywhere in the world.

Accepted Answer

A) True 
 B)False

Question 12

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 13

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Accepted Answer

A) True 
 B)False

Question 14

Figure 9-13  
-Refer to Figure 9-13. With trade, producer surplus is

Accepted Answer

A) $900. 
B) $1,100. 
C) $1,500. 
D) $2,000. 
A) $900. 
B) $1,100. 
C) $1,500. 
D) $2,000.

Question 15

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 16

Figure 9-12  
-Refer to Figure 9-12. Producer surplus after trade is

Accepted Answer

A) $7,000. 
B) $7,500. 
C) $8,800. 
D) $9,600. 
A) $7,000. 
B) $7,500. 
C) $8,800. 
D) $9,600.

Question 17

Figure 9-6  
-Refer to Figure 9-6. Before the tariff is imposed, this country

Accepted Answer

A) imports 200 carnations. 
B) imports 400 carnations. 
C) exports 200 carnations. 
D) exports 400 carnations. 
A) imports 200 carnations. 
B) imports 400 carnations. 
C) exports 200 carnations. 
D) exports 400 carnations.

Question 18

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches 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 19

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 $60 and international trade is allowed. Then Boxland's consumers demand

Accepted Answer

A) 110 tons of cardboard and Boxland's producers supply 120 tons of cardboard. 
B) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 115 tons of cardboard. 
D) 80 tons of cardboard and Boxland's producers supply 120 tons of cardboard. 
A) 110 tons of cardboard and Boxland's producers supply 120 tons of cardboard. 
B) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 115 tons of cardboard. 
D) 80 tons of cardboard and Boxland's producers supply 120 tons of cardboard.

Question 20

A tariff on a product

Accepted Answer

A) is a direct quantitative restriction on the amount of a good that can be imported. 
B) increases the domestic quantity supplied. 
C) increases domestic consumer surplus. 
D) All of the above are correct. 
A) is a direct quantitative restriction on the amount of a good that can be imported. 
B) increases the domestic quantity supplied. 
C) increases domestic consumer surplus. 
D) All of the above are correct.

Exam 9: Application: International Trade

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. From the figure it is apparent that

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The tariff

Figure 9-6 -Refer to Figure 9-6. Without trade, the equilibrium price of carnations is

Which of the following is not an important question for economic policy raised by the experience of the textile industry?

Figure 9-12 -Refer to Figure 9-12. Consumer surplus after trade is

When a country allows trade and becomes an importer of a good,

Figure 9-5 -Refer to Figure 9-5. With trade, the price of wagons in this country is

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is

The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

The world price of cotton is the highest price of cotton observed anywhere in the world.

The rules established under GATT are enforced by the

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Figure 9-13 -Refer to Figure 9-13. With trade, producer surplus is

A tariff on a product

Figure 9-12 -Refer to Figure 9-12. Producer surplus after trade is

Figure 9-6 -Refer to Figure 9-6. Before the tariff is imposed, this country

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

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

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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