Exam 9: Application: International Trade

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19. With free trade, consumer surplus in the textile market amounts to

Suppose that Australia imposes a tariff on imported beef. If the increase in producer surplus is $100 million, the increase in tariff revenue is $200 million, and the reduction in consumer surplus is $500 million, the deadweight loss of the tariff is $300 million.

Assume, for Colombia, that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

If the United States threatens to impose a tariff on Honduran blueberries if Honduras does not remove agricultural subsidies, the United States will be

Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is

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

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

Figure 9-17 -Refer to Figure 9-17. When the country moves from free trade to trade and a tariff, consumer surplus

Figure 9-15 -Refer to Figure 9-15. With the tariff, the domestic price and domestic quantity demanded are

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

If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. With trade, Nicaragua

Free trade allows firms to realize economies of scale, resulting in higher costs of production.

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. The horizontal line at the world price of tricycles represents the

If a country is an exporter of a good, then it must be the case that

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,

Suppose Ecuador imposes a tariff on imported bananas. If the increase in producer surplus is $50 million, the reduction in consumer surplus is $150 million, and the deadweight loss of the tariff is $30 million, then the tariff generates $130 million in revenue for the government.

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then