Question 1

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

Accepted Answer

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

Question 2

Import quotas and tariffs produce similar results.Which of the following is not one of those results?

Accepted Answer

A)  The domestic price of the good increases. 
B)  Consumer surplus of domestic consumers increases. 
C)  Producer surplus of domestic producers increases. 
D)  A deadweight loss is experienced by the domestic country. 
A)  The domestic price of the good increases. 
B)  Consumer surplus of domestic consumers increases. 
C)  Producer surplus of domestic producers increases. 
D)  A deadweight loss is experienced by the domestic country.

Question 3

Figure 9-10.The figure applies to the nation of Australia and the good is cameras.  
-Refer to Figure 9-10.The area bounded by the points (Q0,P0),(Q2,P1),and (Q1,P1)represents

Accepted Answer

A)  Australia's gains from trade. 
B)  the amount by which Australia's gain in producer surplus exceeds its loss in consumer surplus due to trade. 
C)  Australia's loss in total surplus due to trade. 
D)  All of the above are correct. 
A)  Australia's gains from trade. 
B)  the amount by which Australia's gain in producer surplus exceeds its loss in consumer surplus due to trade. 
C)  Australia's loss in total surplus due to trade. 
D)  All of the above are correct.

Question 4

When a nation first begins to trade with other countries and the nation becomes an importer of corn,

Accepted Answer

A)  this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing corn. 
C)  the nation's consumers of corn become better off and the nation's producers of corn become worse off. 
D)  All of the above are correct. 
A)  this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing corn. 
C)  the nation's consumers of corn become better off and the nation's producers of corn become worse off. 
D)  All of the above are correct.

Question 5

Figure 9-11  
-Refer to Figure 9-11.Producer surplus in this market after trade is

Accepted Answer

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

Question 6

Figure 9-15  
-Refer to Figure 9-15.Consumer surplus with the tariff is

Accepted Answer

A)  A. 
B)  A + B. 
C)  A + C + G. 
D)  A + B + C + D +E + F. 
A)  A. 
B)  A + B. 
C)  A + C + G. 
D)  A + B + C + D +E + F.

Question 7

Figure 9-3.The domestic country is China.  
-Refer to Figure 9-3.With trade,China will

Accepted Answer

A)  import 100 pencil sharpeners. 
B)  import 250 pencil sharpeners. 
C)  export 150 pencil sharpeners. 
D)  export 250 pencil sharpeners. 
A)  import 100 pencil sharpeners. 
B)  import 250 pencil sharpeners. 
C)  export 150 pencil sharpeners. 
D)  export 250 pencil sharpeners.

Question 8

After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat,the nation began importing wheat.As a result,total surplus in the wheat market increased by $10 million.Which of the following changes could have occurred as well?

Accepted Answer

A)  The price of wheat in that nation increased with the adoption of the new policy. 
B)  The domestic quantity of wheat supplied increased with the adoption of the new policy. 
C)  Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million. 
D)  Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million. 
A)  The price of wheat in that nation increased with the adoption of the new policy. 
B)  The domestic quantity of wheat supplied increased with the adoption of the new policy. 
C)  Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million. 
D)  Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million.

Question 9

If a tariff is placed on watches,the price of both domestic and imported watches will rise by the amount of the tariff.

Accepted Answer

A) True 
 B)False

Question 10

Figure 9-2  
-Refer to Figure 9-2.With free trade,consumer surplus is

Accepted Answer

A)  $45. 
B)  $80. 
C)  $210. 
D)  $245. 
A)  $45. 
B)  $80. 
C)  $210. 
D)  $245.

Question 11

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 12

If a small country imposes a tariff on an imported good,domestic sellers will gain producer surplus,the government will gain tariff revenue,and domestic consumers will gain consumer surplus.

Accepted Answer

A) True 
 B)False

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

In December 2007,the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy.Of those surveyed,

Accepted Answer

A)  57 percent said free international trade helped the economy. 
B)  27 percent said free international trade helped the economy. 
C)  30 percent said free international trade hurt the economy. 
D)  16 percent said free international trade hurt the economy. 
A)  57 percent said free international trade helped the economy. 
B)  27 percent said free international trade helped the economy. 
C)  30 percent said free international trade hurt the economy. 
D)  16 percent said free international trade hurt the economy.

Question 15

The world price of a simple electronic calculator is $5.00.Before Singapore allowed trade in calculators,the price of a calculator there was $4.00.Once Singapore began allowing trade in calculators with other countries,Singapore began

Accepted Answer

A)  importing calculators and the price of a calculator in Singapore increased to $5.00. 
B)  importing calculators and the price of a calculator in Singapore remained at $4.00. 
C)  exporting calculators and the price of a calculator in Singapore increased to $5.00. 
D)  exporting calculators and the price of a calculator in Singapore remained at $4.00. 
A)  importing calculators and the price of a calculator in Singapore increased to $5.00. 
B)  importing calculators and the price of a calculator in Singapore remained at $4.00. 
C)  exporting calculators and the price of a calculator in Singapore increased to $5.00. 
D)  exporting calculators and the price of a calculator in Singapore remained at $4.00.

Question 16

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?

Accepted Answer

A)  The sum of consumer surplus and producer surplus for domestic traders of steel increases. 
B)  The quantity of steel demanded by domestic consumers increases. 
C)  Domestic producers of steel receive a higher price for steel. 
D)  The losses of the losers exceed the gains of the winners. 
A)  The sum of consumer surplus and producer surplus for domestic traders of steel increases. 
B)  The quantity of steel demanded by domestic consumers increases. 
C)  Domestic producers of steel receive a higher price for steel. 
D)  The losses of the losers exceed the gains of the winners.

Question 17

Figure 9-6  
-Refer to Figure 9-6.With trade and without a tariff,

Accepted Answer

A)  the domestic price is equal to the world price. 
B)  carnations are sold at $8 in this market. 
C)  there is a shortage of 400 carnations in this market. 
D)  this country imports 200 carnations. 
A)  the domestic price is equal to the world price. 
B)  carnations are sold at $8 in this market. 
C)  there is a shortage of 400 carnations in this market. 
D)  this country imports 200 carnations.

Question 18

Figure 9-3.The domestic country is China.  
-Refer to Figure 9-3.If China were to abandon a no-trade policy in favor of a free-trade policy,

Accepted Answer

A)  Chinese producers of pencil sharpeners would become worse off. 
B)  Chinese consumers of pencil sharpeners would become better off. 
C)  total surplus in the Chinese economy would increase. 
D)  All of the above are correct. 
A)  Chinese producers of pencil sharpeners would become worse off. 
B)  Chinese consumers of pencil sharpeners would become better off. 
C)  total surplus in the Chinese economy would increase. 
D)  All of the above are correct.

Question 19

If the United States imposes a tariff on automobiles,then

Accepted Answer

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

Question 20

Figure 9-7.The figure applies to the nation of Wales and the good is cheese.  
-Refer to Figure 9-7.With trade,the Welsh price of cheese and the Welsh quantity of cheese demanded are

Accepted Answer

A)  P1 and Q2. 
B)  P1 and Q1. 
C)  P0 and Q0. 
D)  P3 and Q1. 
A)  P1 and Q2. 
B)  P1 and Q1. 
C)  P0 and Q0. 
D)  P3 and Q1.

Exam 9: Application: International Trade

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

Import quotas and tariffs produce similar results.Which of the following is not one of those results?

Figure 9-10.The figure applies to the nation of Australia and the good is cameras. -Refer to Figure 9-10.The area bounded by the points (Q0,P0),(Q2,P1),and (Q1,P1)represents

When a nation first begins to trade with other countries and the nation becomes an importer of corn,

Figure 9-11 -Refer to Figure 9-11.Producer surplus in this market after trade is

Figure 9-15 -Refer to Figure 9-15.Consumer surplus with the tariff is

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.With trade,China will

If a tariff is placed on watches,the price of both domestic and imported watches will rise by the amount of the tariff.

Figure 9-2 -Refer to Figure 9-2.With free trade,consumer surplus is

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

If a small country imposes a tariff on an imported good,domestic sellers will gain producer surplus,the government will gain tariff revenue,and domestic consumers will gain consumer surplus.

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.

In December 2007,the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy.Of those surveyed,

The world price of a simple electronic calculator is $5.00.Before Singapore allowed trade in calculators,the price of a calculator there was $4.00.Once Singapore began allowing trade in calculators with other countries,Singapore began

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?

Figure 9-6 -Refer to Figure 9-6.With trade and without a tariff,

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.If China were to abandon a no-trade policy in favor of a free-trade policy,

If the United States imposes a tariff on automobiles,then

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.With trade,the Welsh price of cheese and the Welsh quantity of cheese 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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality 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 Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

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

Filters

Figure 9-10.The figure applies to the nation of Australia and the good is cameras. -Refer to Figure 9-10.The area bounded by the points (Q₀,P₀),(Q₂,P₁),and (Q₁,P₁)represents