Question 1

Figure 9-12  
-Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

Accepted Answer

A)  $18 and 400. 
B)  $18 and 800. 
C)  $14 and 400. 
D)  $14 and 600. 
A)  $18 and 400. 
B)  $18 and 800. 
C)  $14 and 400. 
D)  $14 and 600.

Question 2

Figure 9-17  
-Refer to Figure 9-17.The deadweight loss caused by the tariff is

Accepted Answer

A)  $24. 
B)  $72. 
C)  $96. 
D)  $150. 
A)  $24. 
B)  $72. 
C)  $96. 
D)  $150.

Question 3

Figure 9-5  
-Refer to Figure 9-5.Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of wagons to an exporter of wagons?

Accepted Answer

A)  Incomes of domestic citizens increase,and wagons are a normal good. 
B)  Within this country,the price of a substitute for wagons decreases. 
C)  Within this country,the price of a complement to wagons decreases. 
D)  Wages increase for domestic workers who produce wagons. 
A)  Incomes of domestic citizens increase,and wagons are a normal good. 
B)  Within this country,the price of a substitute for wagons decreases. 
C)  Within this country,the price of a complement to wagons decreases. 
D)  Wages increase for domestic workers who produce wagons.

Question 4

Figure 9-15  
-Refer to Figure 9-15.For the saddle market,area B represents

Accepted Answer

A)  government's revenue from the tariff. 
B)  the deadweight loss of the tariff. 
C)  the increase in producer surplus,relative to the free-trade situation,as a result of the tariff. 
D)  None of the above is correct. 
A)  government's revenue from the tariff. 
B)  the deadweight loss of the tariff. 
C)  the increase in producer surplus,relative to the free-trade situation,as a result of the tariff. 
D)  None of the above is correct.

Question 5

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 6

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 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

Figure 9-13  
-Refer to Figure 9-13.With trade,the country

Accepted Answer

A)  exports 200 units of the good. 
B)  exports 400 units of the good. 
C)  imports 400 units of the good. 
D)  imports 600 units of the good. 
A)  exports 200 units of the good. 
B)  exports 400 units of the good. 
C)  imports 400 units of the good. 
D)  imports 600 units of the good.

Question 10

Most economists view the United States' experience with trade as

Accepted Answer

A)  one from which no firm conclusions about the virtues of free trade can be reached,due to the relatively short history of international trade in the U.S. 
B)  one from which no firm conclusions about the virtues of free trade can be reached,due to the lack of trade within the U.S.throughout most of the early history of the U.S. 
C)  an ongoing experiment that confirms the virtues of free trade. 
D)  an ongoing experiment that calls into serious question the notion that free trade enhances the economic well-being of a nation. 
A)  one from which no firm conclusions about the virtues of free trade can be reached,due to the relatively short history of international trade in the U.S. 
B)  one from which no firm conclusions about the virtues of free trade can be reached,due to the lack of trade within the U.S.throughout most of the early history of the U.S. 
C)  an ongoing experiment that confirms the virtues of free trade. 
D)  an ongoing experiment that calls into serious question the notion that free trade enhances the economic well-being of a nation.

Question 11

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

Accepted Answer

A)  removes trade restrictions on its own. 
B)  reduces its trade restrictions while other countries do the same. 
C)  does not remove trade restrictions no matter what other countries do. 
D)  is willing to trade with multiple countries at once. 
A)  removes trade restrictions on its own. 
B)  reduces its trade restrictions while other countries do the same. 
C)  does not remove trade restrictions no matter what other countries do. 
D)  is willing to trade with multiple countries at once.

Question 12

Figure 9-2  
-Refer to Figure 9-2.The world price for baskets represents

Accepted Answer

A)  the demand for baskets from the rest of the world. 
B)  the supply of baskets from the rest of the world. 
C)  the level of inefficiency in the domestic market caused by trade. 
D)  the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage. 
A)  the demand for baskets from the rest of the world. 
B)  the supply of baskets from the rest of the world. 
C)  the level of inefficiency in the domestic market caused by trade. 
D)  the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage.

Question 13

Figure 9-5  
-Refer to Figure 9-5.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country,given that wagons and horses are complements?

Accepted Answer

A)  The quantity of wagons that this country imports would increase. 
B)  The quantity of wagons that this country imports would decrease,but the country would still be an importer of wagons. 
C)  This country would switch from being an importer of wagons to an exporter of wagons. 
D)  The domestic price without trade would move closer to the world price. 
A)  The quantity of wagons that this country imports would increase. 
B)  The quantity of wagons that this country imports would decrease,but the country would still be an importer of wagons. 
C)  This country would switch from being an importer of wagons to an exporter of wagons. 
D)  The domestic price without trade would move closer to the world price.

Exam 9: Application: International Trade

Figure 9-12 -Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

Figure 9-17 -Refer to Figure 9-17.The deadweight loss caused by the tariff is

Figure 9-5 -Refer to Figure 9-5.Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of wagons to an exporter of wagons?

Figure 9-15 -Refer to Figure 9-15.For the saddle market,area B represents

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

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

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.

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.

Figure 9-13 -Refer to Figure 9-13.With trade,the country

Most economists view the United States' experience with trade as

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

Figure 9-2 -Refer to Figure 9-2.The world price for baskets represents

Figure 9-5 -Refer to Figure 9-5.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country,given that wagons and horses are complements?

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

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