Exam 9: Application: International Trade

The nation of Aquilonia 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 rice, exporting steel, and neither importing nor exporting TVs. We can conclude that producer surplus in Aquilonia is now

The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

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 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, producer surplus in China is

At present, the United States uses a system of quotas to limit the amount of sugar imported into the country. Which of the following statements is most likely true?

A tax on an imported good is called a

When a country takes a unilateral approach to free trade, it

Figure 9-2 -Refer to Figure 9-2. As a result of trade, total surplus increases by

Tariffs and quotas are different in the sense that

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market before trade is

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?

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

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. Given that Vietnam is a small country, it is apparent from the figure that

Figure 9-17 -Refer to Figure 9-17. The amount of revenue collected by the government from the tariff is

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1. With trade, Scotland will

When a country that imports a particular good imposes an import quota on that good,

If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

The price of sugar that prevails in international markets is called the

Chile is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Chile imposes a $7 tariff on chips. Which of the following outcomes is possible?