Question 1

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

Accepted Answer

A)  everyone in the country benefits. 
B)  the gains of the winners exceed the losses of the losers. 
C)  the losses of the losers exceed the gains of the winners. 
D)  everyone in the country loses. 
A)  everyone in the country benefits. 
B)  the gains of the winners exceed the losses of the losers. 
C)  the losses of the losers exceed the gains of the winners. 
D)  everyone in the country loses.

Question 2

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Accepted Answer

A)  China and North Korea 
B)  Chile and South Korea 
C)  Russia and Japan 
D)  the United States and Mexico 
A)  China and North Korea 
B)  Chile and South Korea 
C)  Russia and Japan 
D)  the United States and Mexico

Question 3

Figure 9-1
The figure illustrates the market for coffee in Guatemala.  
-Refer to Figure 9-1. With trade, Guatemala will

Accepted Answer

A)  export 22 units of coffee. 
B)  export 10 units of coffee. 
C)  import 30 units of coffee. 
D)  import 12 units of coffee. 
A)  export 22 units of coffee. 
B)  export 10 units of coffee. 
C)  import 30 units of coffee. 
D)  import 12 units of coffee.

Question 4

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Accepted Answer

A) True 
 B)False

Question 5

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations:  
-Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Accepted Answer

The equilibrium pric

Question 6

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 7

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Accepted Answer

A)  $100. 
B)  $200. 
C)  $400. 
D)  $500. 
A)  $100. 
B)  $200. 
C)  $400. 
D)  $500.

Question 8

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 $45. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

Accepted Answer

A)  domestic producers of cardboard become better off and domestic consumers of cardboard become better off. 
B)  domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. 
C)  domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. 
D)  domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. 
A)  domestic producers of cardboard become better off and domestic consumers of cardboard become better off. 
B)  domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. 
C)  domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. 
D)  domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.

Question 9

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 10

Figure 9-26
The following diagram shows the domestic demand and domestic supply curves in a market.  
-Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer

Question 11

A tariff

Accepted Answer

A)  lowers the domestic price of the exported good below the world price. 
B)  keeps the domestic price of the exported good the same as the world price. 
C)  raises the domestic price of the imported good above the world price. 
D)  lowers the domestic price of the imported good below the world price. 
A)  lowers the domestic price of the exported good below the world price. 
B)  keeps the domestic price of the exported good the same as the world price. 
C)  raises the domestic price of the imported good above the world price. 
D)  lowers the domestic price of the imported good below the world price.

Question 12

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Accepted Answer

A)  Moldova can only import goods; it cannot export goods. 
B)  Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C)  only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D)  Moldova is a price taker. 
A)  Moldova can only import goods; it cannot export goods. 
B)  Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C)  only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D)  Moldova is a price taker.

Question 13

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. Without trade, total surplus amounts to

Accepted Answer

A)  $810. 
B)  $1,620. 
C)  $3,240. 
D)  $6,480. 
A)  $810. 
B)  $1,620. 
C)  $3,240. 
D)  $6,480.

Question 14

Figure 9-23
The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit.  
-Refer to Figure 9-23. With free trade, the domestic price and domestic quantity demanded are

Accepted Answer

A)  $90 and 5. 
B)  $90 and 10. 
C)  $120 and 5. 
D)  $120 and 18. 
A)  $90 and 5. 
B)  $90 and 10. 
C)  $120 and 5. 
D)  $120 and 18.

Question 15

Assume, for Mexico, that the domestic price of beets without international trade is higher than the world price of beets. This suggests that, in the production of beets,

Accepted Answer

A)  Mexico has a comparative advantage over other countries and Mexico will export beets. 
B)  Mexico has a comparative advantage over other countries and Mexico will import beets. 
C)  other countries have a comparative advantage over Mexico and Mexico will export beets. 
D)  other countries have a comparative advantage over Mexico and Mexico will import beets. 
A)  Mexico has a comparative advantage over other countries and Mexico will export beets. 
B)  Mexico has a comparative advantage over other countries and Mexico will import beets. 
C)  other countries have a comparative advantage over Mexico and Mexico will export beets. 
D)  other countries have a comparative advantage over Mexico and Mexico will import beets.

Question 16

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Accepted Answer

A)  consumer surplus equals producer surplus in the Canadian soybean market. 
B)  total surplus exceeds consumer surplus in the Canadian soybean market. 
C)  Canada permits international trade in soybeans. 
D)  Canada forbids international trade in soybeans. 
A)  consumer surplus equals producer surplus in the Canadian soybean market. 
B)  total surplus exceeds consumer surplus in the Canadian soybean market. 
C)  Canada permits international trade in soybeans. 
D)  Canada forbids international trade in soybeans.

Question 17

Figure 9-10. The figure applies to Mexico and the good is rifles.  
-Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Accepted Answer

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

Question 18

Figure 9-15  
-Refer to Figure 9-15. The amount of government revenue created by the tariff is

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.

Question 19

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

Accepted Answer

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

Question 20

Figure 9-26
The following diagram shows the domestic demand and domestic supply curves in a market.  
-Refer to Figure 9-26. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

Accepted Answer

Consumer surplus is

Exam 9: Application: International Trade

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

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. With trade, Guatemala will

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

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,

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

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 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

A tariff

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, total surplus amounts to

Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade, the domestic price and domestic quantity demanded are

Assume, for Mexico, that the domestic price of beets without international trade is higher than the world price of beets. This suggests that, in the production of beets,

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Figure 9-15 -Refer to Figure 9-15. The amount of government revenue created by the tariff is

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

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

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

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