Question 1

One should be especially wary of the national-security argument for restricting trade when that argument is made by

Accepted Answer

A)  representatives of industry. 
B)  representatives of the defense establishment. 
C)  members of households. 
D)  foreign government officials. 
A)  representatives of industry. 
B)  representatives of the defense establishment. 
C)  members of households. 
D)  foreign government officials.

Question 2

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is
$52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Accepted Answer

A)  will increase, and this will cause consumer surplus to decrease. 
B)  will decrease, and this will cause consumer surplus to increase. 
C)  will be unaffected, and consumer surplus will be unaffected as well. 
D)  could increase or decrease or be unaffected; this cannot be determined. 
A)  will increase, and this will cause consumer surplus to decrease. 
B)  will decrease, and this will cause consumer surplus to increase. 
C)  will be unaffected, and consumer surplus will be unaffected as well. 
D)  could increase or decrease or be unaffected; this cannot be determined.

Question 3

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

Accepted Answer

Nash will

Question 4

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach, because the multilateral approach can reduce trade restrictions abroad as well as at home.

Accepted Answer

A) True 
 B)False

Question 5

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Accepted Answer

Jumanji wi

Question 6

Figure 9-12  
-Refer to Figure 9-12. Producer surplus before trade is

Accepted Answer

A)  $14,400. 
B)  $16,800. 
C)  $21,600. 
D)  $24,800. 
A)  $14,400. 
B)  $16,800. 
C)  $21,600. 
D)  $24,800.

Question 7

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

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 8

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

Accepted Answer

A)  $800. 
B)  $1,200. 
C)  $1,800. 
D)  $2,700. 
A)  $800. 
B)  $1,200. 
C)  $1,800. 
D)  $2,700.

Question 9

Scenario 9-2
-For a small country called Boxland, the equation of the domestic demand curve for cardboard is
   where
     represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard.
-For Boxland, the equation of the domestic supply curve for cardboard is
   where
     represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard.
-Refer to Scenario 9-2. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?

Accepted Answer

A)  It decreases consumer surplus, increases producer surplus, and decreases total surplus. 
B)  It decreases consumer surplus, increases producer surplus, and increases total surplus. 
C)  It decreases consumer surplus, decreases producer surplus, and decreases total surplus. 
D)  It increases consumer surplus, increases producer surplus, and increases total surplus. 
A)  It decreases consumer surplus, increases producer surplus, and decreases total surplus. 
B)  It decreases consumer surplus, increases producer surplus, and increases total surplus. 
C)  It decreases consumer surplus, decreases producer surplus, and decreases total surplus. 
D)  It increases consumer surplus, increases producer surplus, and increases total surplus.

Question 10

Zelzar 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 incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?

Accepted Answer

A)  producers of incense and consumers of steel 
B)  consumers of all three goods 
C)  consumers of incense and producers of rugs 
D)  producers of steel and consumers of incense 
A)  producers of incense and consumers of steel 
B)  consumers of all three goods 
C)  consumers of incense and producers of rugs 
D)  producers of steel and consumers of incense

Question 11

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 12

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6. With trade and without a tariff,

Accepted Answer

A)  the domestic price is equal to the world price. 
B)  roses are sold at $4 in this market. 
C)  there is a shortage of 400 roses in this market. 
D)  this country imports 200 roses. 
A)  the domestic price is equal to the world price. 
B)  roses are sold at $4 in this market. 
C)  there is a shortage of 400 roses in this market. 
D)  this country imports 200 roses.

Question 13

Figure 9-29
The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit.  
-Refer to Figure 9-29. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer

Question 14

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2. If this country chooses to trade, the price of calculators in this country will be

Accepted Answer

A)  $15 and 80 calculators will be sold domestically. 
B)  $15 and 130 calculators will be sold domestically. 
C)  $20 and 80 calculators will be sold domestically. 
D)  $20 and 130 calculators will be sold domestically. 
A)  $15 and 80 calculators will be sold domestically. 
B)  $15 and 130 calculators will be sold domestically. 
C)  $20 and 80 calculators will be sold domestically. 
D)  $20 and 130 calculators will be sold domestically.

Question 15

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

Accepted Answer

A unilateral approach is when a country

Question 16

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

Accepted Answer

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

Question 17

Figure 9-10. The figure applies to Mexico and the good is rifles.  
-Refer to Figure 9-10. Mexico's gains from trade are represented by the area that is bounded by the points

Accepted Answer

A)  (0, P0), (Q0, P0), (Q2, P1), and (0, P1). 
B)  (0, P1), (0, P2), (Q0, P0), and (Q1, P1). 
C)  (Q0, P0), (Q2, P1), and (Q1, P1). 
D)  (0, P0), (0, P2), and (Q0, P0). 
A)  (0, P0), (Q0, P0), (Q2, P1), and (0, P1). 
B)  (0, P1), (0, P2), (Q0, P0), and (Q1, P1). 
C)  (Q0, P0), (Q2, P1), and (Q1, P1). 
D)  (0, P0), (0, P2), and (Q0, P0).

Question 18

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations:  
-Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

The countr

Question 19

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good,

Accepted Answer

A)  consumer surplus increases and total surplus increases in the market for that good. 
B)  consumer surplus increases and total surplus decreases in the market for that good. 
C)  consumer surplus decreases and total surplus increases in the market for that good. 
D)  consumer surplus decreases and total surplus decreases in the market for that good. 
A)  consumer surplus increases and total surplus increases in the market for that good. 
B)  consumer surplus increases and total surplus decreases in the market for that good. 
C)  consumer surplus decreases and total surplus increases in the market for that good. 
D)  consumer surplus decreases and total surplus decreases in the market for that good.

Question 20

Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia

Accepted Answer

A)  may prompt Russian farmers to invoke the infant-industry argument. 
B)  increase the consumer surplus of Russian buyers of wheat. 
C)  decrease the total surplus of the Russian people. 
D)  All of the above are correct. 
A)  may prompt Russian farmers to invoke the infant-industry argument. 
B)  increase the consumer surplus of Russian buyers of wheat. 
C)  decrease the total surplus of the Russian people. 
D)  All of the above are correct.

One should be especially wary of the national-security argument for restricting trade when that argument is made by

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach, because the multilateral approach can reduce trade restrictions abroad as well as at home.

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Figure 9-12 -Refer to Figure 9-12. Producer surplus before trade is

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

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

Zelzar 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 incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?

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

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. With trade and without a tariff,

Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. -Refer to Figure 9-29. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. If this country chooses to trade, the price of calculators in this country will be

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. Producer surplus in this market before trade is

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. Mexico's gains from trade are represented by the area that is bounded by the points

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good,

Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia

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

Filters

Exam 9: Application: International Trade

One should be especially wary of the national-security argument for restricting trade when that argument is made by

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach, because the multilateral approach can reduce trade restrictions abroad as well as at home.

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Figure 9-12 -Refer to Figure 9-12. Producer surplus before trade is

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

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

Zelzar 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 incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?

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

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. With trade and without a tariff,

Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. -Refer to Figure 9-29. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. If this country chooses to trade, the price of calculators in this country will be

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. Producer surplus in this market before trade is

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. Mexico's gains from trade are represented by the area that is bounded by the points

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good,

Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia

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

Filters