Question 1

It is not necessary for a young industry to be protected in order to grow and succeed in international markets.

Accepted Answer

A) True 
 B)False

Question 2

Use the following information to answer the following questions.
The before-trade price of logs in New Zealand is $100 per cubic metre. The world price of logs is $200 per cubic metre. New Zealand is a price taker in the world log market.
-If trade in logs is allowed, New Zealand will become an:

Accepted Answer

A)  importer of logs and the price of logs in New Zealand will be $100 
B)  importer of logs and the price of logs in New Zealand will be $200 
C)  exporter of logs and the price of logs in New Zealand will be $100 
D)  exporter of logs and the price of logs in New Zealand will be $200 
A)  importer of logs and the price of logs in New Zealand will be $100 
B)  importer of logs and the price of logs in New Zealand will be $200 
C)  exporter of logs and the price of logs in New Zealand will be $100 
D)  exporter of logs and the price of logs in New Zealand will be $200

Question 3

As an economist, do any arguments justify trade restrictions? Explain.

Accepted Answer

Most economists would dismiss the jobs a

Question 4

Graph 9-3
  
-In Graph 9-3, the free-trade price and quantity demanded would be:

Accepted Answer

A)  P1, Q1 
B)  P1, Q4 
C)  P2, Q2 
D)  P2, Q3 
A)  P1, Q1 
B)  P1, Q4 
C)  P2, Q2 
D)  P2, Q3

Question 5

Graph 9-6
This graph refers to the market for oil in Spain.
  
-According to Graph 9-6, producer surplus plus consumer surplus in Spain before trade would be:

Accepted Answer

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

Question 6

Graph 9-9
  
-In Graph 9-9, producer surplus after the tariff would be:

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 7

Trade among nations is ultimately based on:

Accepted Answer

A)  absolute advantage 
B)  international trade treaties 
C)  comparative advantage 
D)  exploitation of weaker countries by more powerful countries 
A)  absolute advantage 
B)  international trade treaties 
C)  comparative advantage 
D)  exploitation of weaker countries by more powerful countries

Question 8

Economists fear that national security arguments are used too quickly by producers at consumers' expense.

Accepted Answer

A) True 
 B)False

Question 9

Graph 9-2
This graph refers to the market for saddles in Argentina.
  
-According to Graph 9-2, the equilibrium price and the equilibrium quantity of saddles in Argentina before trade would be:

Accepted Answer

A)  P1, Q2 
B)  P1, Q1 
C)  P0, Q0 
D)  P0, Q1 
A)  P1, Q2 
B)  P1, Q1 
C)  P0, Q0 
D)  P0, Q1

Question 10

Suppose the before-trade domestic price of natural gas in Australia is $15 per kg. The world price of natural gas is $30 per kg. Australia is a price-taker in the natural gas market.
-According to this statement, if trade in natural gas is allowed, Australian consumers of natural gas:

Accepted Answer

A)  will be better off 
B)  will be worse off 
C)  will be unaffected 
D)  could be helped or hurt 
A)  will be better off 
B)  will be worse off 
C)  will be unaffected 
D)  could be helped or hurt

Question 11

Can a government always gain revenue by imposing a tariff?

Accepted Answer

No, a tariff may be so high th

Question 12

If New Zealand exports wool to China, and imports cameras from China, then it is likely that:

Accepted Answer

A)  New Zealand has a comparative advantage in producing cameras and China has a comparative advantage in producing wool. 
B)  New Zealand has a comparative advantage in producing wool and China has a comparative advantage in producing cameras. 
C)  New Zealand and China would both be better off if they each produced wool and cameras. 
D)  New Zealand subsidises the production of wool. 
A)  New Zealand has a comparative advantage in producing cameras and China has a comparative advantage in producing wool. 
B)  New Zealand has a comparative advantage in producing wool and China has a comparative advantage in producing cameras. 
C)  New Zealand and China would both be better off if they each produced wool and cameras. 
D)  New Zealand subsidises the production of wool.

Question 13

Graph 9-8
  
-According to Graph 9-8, the price and quantity demanded after trade would be:

Accepted Answer

A)  $9300 
B)  $9900 
C)  $15 400 
D)  $15 600 
A)  $9300 
B)  $9900 
C)  $15 400 
D)  $15 600

Question 14

Policymakers in Australia are increasingly considering trade restrictions in order to protect domestic producers from foreign competitors.

Accepted Answer

A) True 
 B)False

Question 15

What are the arguments in favour of trade restrictions and what are the counter-arguments?

Accepted Answer

Arguments mentioned in the text include

Question 16

Graph 9-1
This graph refers to the market for beef in Japan.
  
-According to Graph 9-1, if trade in beef is allowed, Japanese:

Accepted Answer

A)  consumer surplus will increase and producer surplus will decrease 
B)  consumer surplus will decrease and producer surplus will increase 
C)  producer surplus and consumer surplus will increase 
D)  producer surplus and consumer surplus will be unaffected 
A)  consumer surplus will increase and producer surplus will decrease 
B)  consumer surplus will decrease and producer surplus will increase 
C)  producer surplus and consumer surplus will increase 
D)  producer surplus and consumer surplus will be unaffected

Question 17

Graph 9-5
This graph refers to the market for oil in Spain.
  
-According to Graph 9-5, the price and quantity of oil in Spain before trade would be:

Accepted Answer

A)  P0, Q0 
B)  P1, Q1 
C)  P1, Q2 
D)  P1, Q0 
A)  P0, Q0 
B)  P1, Q1 
C)  P1, Q2 
D)  P1, Q0

Question 18

Suppose the before-trade domestic price of natural gas in Australia is $15 per kg. The world price of natural gas is $30 per kg. Australia is a price-taker in the natural gas market.
-According to this statement, if trade in natural gas is allowed, total wellbeing in Australia:

Accepted Answer

A)  will increase 
B)  will decrease 
C)  will be unaffected 
D)  could increase or decrease 
A)  will increase 
B)  will decrease 
C)  will be unaffected 
D)  could increase or decrease

Question 19

Graph 9-4
This graph refers to the market for kiwifruit in New Zealand.
  
-According to Graph 9-4, consumer surplus in New Zealand after the trade in kiwifruit is:

Accepted Answer

A)  a 
B)  a + b 
C)  a + b + c 
D)  c 
A)  a 
B)  a + b 
C)  a + b + c 
D)  c

Question 20

Without free trade, the domestic price of a good must be equal to the world price of a good.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

It is not necessary for a young industry to be protected in order to grow and succeed in international markets.

Use the following information to answer the following questions. The before-trade price of logs in New Zealand is $100 per cubic metre. The world price of logs is $200 per cubic metre. New Zealand is a price taker in the world log market. -If trade in logs is allowed, New Zealand will become an:

As an economist, do any arguments justify trade restrictions? Explain.

Graph 9-3 -In Graph 9-3, the free-trade price and quantity demanded would be:

Graph 9-6 This graph refers to the market for oil in Spain. -According to Graph 9-6, producer surplus plus consumer surplus in Spain before trade would be:

Graph 9-9 -In Graph 9-9, producer surplus after the tariff would be:

Trade among nations is ultimately based on:

Economists fear that national security arguments are used too quickly by producers at consumers' expense.

Graph 9-2 This graph refers to the market for saddles in Argentina. -According to Graph 9-2, the equilibrium price and the equilibrium quantity of saddles in Argentina before trade would be:

Suppose the before-trade domestic price of natural gas in Australia is $15 per kg. The world price of natural gas is $30 per kg. Australia is a price-taker in the natural gas market. -According to this statement, if trade in natural gas is allowed, Australian consumers of natural gas:

Can a government always gain revenue by imposing a tariff?

If New Zealand exports wool to China, and imports cameras from China, then it is likely that:

Graph 9-8 -According to Graph 9-8, the price and quantity demanded after trade would be:

Policymakers in Australia are increasingly considering trade restrictions in order to protect domestic producers from foreign competitors.

What are the arguments in favour of trade restrictions and what are the counter-arguments?

Graph 9-1 This graph refers to the market for beef in Japan. -According to Graph 9-1, if trade in beef is allowed, Japanese:

Graph 9-5 This graph refers to the market for oil in Spain. -According to Graph 9-5, the price and quantity of oil in Spain before trade would be:

Suppose the before-trade domestic price of natural gas in Australia is $15 per kg. The world price of natural gas is $30 per kg. Australia is a price-taker in the natural gas market. -According to this statement, if trade in natural gas is allowed, total wellbeing in Australia:

Graph 9-4 This graph refers to the market for kiwifruit in New Zealand. -According to Graph 9-4, consumer surplus in New Zealand after the trade in kiwifruit is:

Without free trade, the domestic price of a good must be equal to the world price of a good.

Ten Lessons From 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

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

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

Five Debates Over Macroeconomic Policy

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