Question 1

Figure 9-1
The figure illustrates the market for wool in New Zealand.  
-Refer to Figure 9-1.When trade is allowed,

Accepted Answer

A)  New Zealand producers of wool become better off and New Zealand consumers of wool become worse off. 
B)  New Zealand consumers of wool become better off and New Zealand producers of wool become worse off. 
C)  both New Zealand producers and consumers of wool become better off. 
D)  both New Zealand producers and consumers of wool become worse off. 
A)  New Zealand producers of wool become better off and New Zealand consumers of wool become worse off. 
B)  New Zealand consumers of wool become better off and New Zealand producers of wool become worse off. 
C)  both New Zealand producers and consumers of wool become better off. 
D)  both New Zealand producers and consumers of wool become worse off.

Question 2

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

Accepted Answer

A)  government's revenue from the tariff. 
B)  producer surplus after the tariff becomes effective. 
C)  the decrease in consumer surplus,relative to the free-trade situation,as a result of the tariff. 
D)  the decrease in total surplus,relative to the free-trade situation,as a result of the tariff. 
A)  government's revenue from the tariff. 
B)  producer surplus after the tariff becomes effective. 
C)  the decrease in consumer surplus,relative to the free-trade situation,as a result of the tariff. 
D)  the decrease in total surplus,relative to the free-trade situation,as a result of the tariff.

Question 3

Figure 9-7.The figure applies to the nation of Wales and the good is cheese.  
-Refer to Figure 9-7.Which of the following is a valid equation for the gains from trade?

Accepted Answer

A)  Gains from trade = (1/2)(P1 - P0)(Q2 - Q1). 
B)  Gains from trade = (1/2)(P1 - P0)(Q2 - Q0) 
C)  Gains from trade = (1/2)(P1 - P0)(Q1 + Q2). 
D)  Gains from trade = (1/2)(Q1)(P3 - P1). 
A)  Gains from trade = (1/2)(P1 - P0)(Q2 - Q1). 
B)  Gains from trade = (1/2)(P1 - P0)(Q2 - Q0) 
C)  Gains from trade = (1/2)(P1 - P0)(Q1 + Q2). 
D)  Gains from trade = (1/2)(Q1)(P3 - P1).

Question 4

Figure 9-15  
-Refer to Figure 9-15.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Accepted Answer

A)  Q2 - Q1. 
B)  Q3 - Q2. 
C)  Q4 - Q3. 
D)  Q4 - Q3 + Q2 - Q1. 
A)  Q2 - Q1. 
B)  Q3 - Q2. 
C)  Q4 - Q3. 
D)  Q4 - Q3 + Q2 - Q1.

Question 5

If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

Accepted Answer

A)  the country will be an exporter of the good. 
B)  the country will be an importer of the good. 
C)  the country will be neither an exporter nor an importer of the good. 
D)  Additional information is needed about demand to determine whether the country will be an exporter of the good,an importer of the good,or neither. 
A)  the country will be an exporter of the good. 
B)  the country will be an importer of the good. 
C)  the country will be neither an exporter nor an importer of the good. 
D)  Additional information is needed about demand to determine whether the country will be an exporter of the good,an importer of the good,or neither.

Question 6

Figure 9-7.The figure applies to the nation of Wales and the good is cheese.  
-Refer to Figure 9-7.Which of the following is a valid equation for Welsh consumer surplus with trade?

Accepted Answer

A)  Consumer surplus with trade = (1/2)(Q0)(P1 - P0). 
B)  Consumer surplus with trade = (1/2)(Q0)(P3 - P0). 
C)  Consumer surplus with trade = (1/2)(Q1)(P3 - P1). 
D)  None of the above is correct. 
A)  Consumer surplus with trade = (1/2)(Q0)(P1 - P0). 
B)  Consumer surplus with trade = (1/2)(Q0)(P3 - P0). 
C)  Consumer surplus with trade = (1/2)(Q1)(P3 - P1). 
D)  None of the above is correct.

Question 7

Figure 9-10.The figure applies to the nation of Australia and the good is cameras.  
-Refer to Figure 9-10.When trade takes place,the quantity Q2 - Q1 is

Accepted Answer

A)  the number of cameras bought and sold in Australia. 
B)  the number of cameras produced in Australia. 
C)  the number of cameras exported by Australia. 
D)  the number of cameras imported by Australia. 
A)  the number of cameras bought and sold in Australia. 
B)  the number of cameras produced in Australia. 
C)  the number of cameras exported by Australia. 
D)  the number of cameras imported by Australia.

Question 8

Turkey is an importer of wheat.The world price of a bushel of wheat is $7.Turkey imposes a $3-per-bushel tariff on wheat.Turkey is a price-taker in the wheat market.As a result of the tariff,

Accepted Answer

A)  Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off. 
B)  Turkish consumers of wheat become worse off and Turkish producers of wheat become better off. 
C)  Turkish consumers of wheat become better off and Turkish producers of wheat become worse off. 
D)  Turkish consumers of wheat become better off and Turkish producers of wheat become better off. 
A)  Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off. 
B)  Turkish consumers of wheat become worse off and Turkish producers of wheat become better off. 
C)  Turkish consumers of wheat become better off and Turkish producers of wheat become worse off. 
D)  Turkish consumers of wheat become better off and Turkish producers of wheat become better off.

Question 9

Figure 9-11  
-Refer to Figure 9-11.The change in total surplus in this market because of trade is

Accepted Answer

A)  A,and this area represents a loss of total surplus. 
B)  B,and this area represents a gain in total surplus. 
C)  C,and this area represents a loss of total surplus. 
D)  D,and this area represents a gain in total surplus. 
A)  A,and this area represents a loss of total surplus. 
B)  B,and this area represents a gain in total surplus. 
C)  C,and this area represents a loss of total surplus. 
D)  D,and this area represents a gain in total surplus.

Question 10

Figure 9-18.On the diagram below,Q represents the quantity of peaches and P represents the price of peaches.The domestic country is Isoland.  
-Refer to Figure 9-18.Suppose Isoland changes from a no-trade policy to a policy that allows international trade.If the world price of peaches is $5,then the policy change results in a

Accepted Answer

A)  $25 decrease in consumer surplus. 
B)  $20 increase in consumer surplus. 
C)  $25 decrease in producer surplus. 
D)  $20 increase in producer surplus. 
A)  $25 decrease in consumer surplus. 
B)  $20 increase in consumer surplus. 
C)  $25 decrease in producer surplus. 
D)  $20 increase in producer surplus.

Question 11

Trade raises the economic well-being of a nation in the sense that

Accepted Answer

A)  the gains of the winners exceed the losses of the losers. 
B)  everyone in an economy gains from trade. 
C)  since countries can choose what products to trade,they will pick those products that are most beneficial to society. 
D)  the nation joins the international community when it begins to engage in trade. 
A)  the gains of the winners exceed the losses of the losers. 
B)  everyone in an economy gains from trade. 
C)  since countries can choose what products to trade,they will pick those products that are most beneficial to society. 
D)  the nation joins the international community when it begins to engage in trade.

Question 12

If Argentina exports oranges to the rest of the world,Argentina's producers of oranges are worse off,and Argentina's consumers of oranges are better off,as a result of trade.

Accepted Answer

A) True 
 B)False

Question 13

Figure 9-1
The figure illustrates the market for wool in New Zealand.  
-Refer to Figure 9-1.When trade in wool is allowed,producer surplus in New Zealand

Accepted Answer

A)  increases by the area B + D. 
B)  increases by the area B + D + G. 
C)  decreases by the area C + F. 
D)  decreases by the area G. 
A)  increases by the area B + D. 
B)  increases by the area B + D + G. 
C)  decreases by the area C + F. 
D)  decreases by the area G.

Question 14

Scenario 9-1
The before-trade domestic price of tomatoes in the United States is $500 per ton.The world price of tomatoes is $600 per ton.The U.S.is a price-taker in the market for tomatoes.
-Refer to Scenario 9-1.If trade in tomatoes is allowed,the

Accepted Answer

A)  price paid by American consumers of tomatoes is unchanged relative to the no-trade situation. 
B)  total well-being of American producers of tomatoes is diminished relative to the no-trade situation. 
C)  total well-being of American consumers of tomatoes is enhanced relative to the no-trade situation. 
D)  total well-being of the United States is enhanced relative to the no-trade situation. 
A)  price paid by American consumers of tomatoes is unchanged relative to the no-trade situation. 
B)  total well-being of American producers of tomatoes is diminished relative to the no-trade situation. 
C)  total well-being of American consumers of tomatoes is enhanced relative to the no-trade situation. 
D)  total well-being of the United States is enhanced relative to the no-trade situation.

Question 15

When a country that imports shoes imposes a tariff on shoes,buyers of shoes in that country become worse off.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

If the United Kingdom imports tea cups from other countries,then U.K.producers of tea cups are better off,and U.K.consumers of tea cups are worse off,as a result of trade.

Accepted Answer

A) True 
 B)False

Question 18

Figure 9-6  
-The before-trade price of fish in Denmark is $10.00 per pound.The world price of fish is $6.00 per pound.Denmark is a price-taker in the fish market.If Denmark begins to allow trade in fish,its consumers of fish will become

Accepted Answer

A)  better off,its producers of fish will become better off,and on balance the citizens of Denmark will become better off. 
B)  worse off,its producers of fish will become better off,and on balance the citizens of Denmark will become worse off 
C)  worse off,its producers of fish will become better off,and on balance the citizens of Denmark will become worse off . 
D)  better off,its producers of fish will become worse off,and on balance the citizens of Denmark will become better off. 
A)  better off,its producers of fish will become better off,and on balance the citizens of Denmark will become better off. 
B)  worse off,its producers of fish will become better off,and on balance the citizens of Denmark will become worse off 
C)  worse off,its producers of fish will become better off,and on balance the citizens of Denmark will become worse off . 
D)  better off,its producers of fish will become worse off,and on balance the citizens of Denmark will become better off.

Question 19

Figure 9-2  
-Refer to Figure 9-2.Without trade,consumer surplus is

Accepted Answer

A)  $210. 
B)  $245. 
C)  $455. 
D)  $490. 
A)  $210. 
B)  $245. 
C)  $455. 
D)  $490.

Question 20

Figure 9-15  
-Refer to Figure 9-15.As a result of the tariff,there is a deadweight loss that amounts to

Accepted Answer

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

Exam 9: Application: International Trade

Figure 9-1 The figure illustrates the market for wool in New Zealand. -Refer to Figure 9-1.When trade is allowed,

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

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.Which of the following is a valid equation for the gains from trade?

Figure 9-15 -Refer to Figure 9-15.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.Which of the following is a valid equation for Welsh consumer surplus with trade?

Figure 9-10.The figure applies to the nation of Australia and the good is cameras. -Refer to Figure 9-10.When trade takes place,the quantity Q2 - Q1 is

Turkey is an importer of wheat.The world price of a bushel of wheat is $7.Turkey imposes a $3-per-bushel tariff on wheat.Turkey is a price-taker in the wheat market.As a result of the tariff,

Figure 9-11 -Refer to Figure 9-11.The change in total surplus in this market because of trade is

Trade raises the economic well-being of a nation in the sense that

If Argentina exports oranges to the rest of the world,Argentina's producers of oranges are worse off,and Argentina's consumers of oranges are better off,as a result of trade.

Figure 9-1 The figure illustrates the market for wool in New Zealand. -Refer to Figure 9-1.When trade in wool is allowed,producer surplus in New Zealand

Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton.The world price of tomatoes is $600 per ton.The U.S.is a price-taker in the market for tomatoes. -Refer to Scenario 9-1.If trade in tomatoes is allowed,the

When a country that imports shoes imposes a tariff on shoes,buyers of shoes in that country become worse off.

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

If the United Kingdom imports tea cups from other countries,then U.K.producers of tea cups are better off,and U.K.consumers of tea cups are worse off,as a result of trade.

Figure 9-6 -The before-trade price of fish in Denmark is $10.00 per pound.The world price of fish is $6.00 per pound.Denmark is a price-taker in the fish market.If Denmark begins to allow trade in fish,its consumers of fish will become

Figure 9-2 -Refer to Figure 9-2.Without trade,consumer surplus is

Figure 9-15 -Refer to Figure 9-15.As a result of the tariff,there is a deadweight loss that amounts to

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.When trade takes place,the quantity Q₂ - Q₁ is