Question 1

Figure 9-15  
-Refer to Figure 9-15.With trade and without a tariff,the price and domestic quantity demanded are

Accepted Answer

A) P1 and Q1. 
B) P1 and Q4. 
C) P2 and Q2. 
D) P2 and Q3. 
A) P1 and Q1. 
B) P1 and Q4. 
C) P2 and Q2. 
D) P2 and Q3.

Question 2

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 3

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2.With free trade,consumer surplus is

Accepted Answer

A) $320. 
B) $640. 
C) $845. 
D) $1,690. 
A) $320. 
B) $640. 
C) $845. 
D) $1,690.

Question 4

The nation of Aquilonia 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 rice,exporting steel,and neither importing nor exporting TVs.We can conclude that producer surplus in Aquilonia is now

Accepted Answer

A) higher in the steel market,lower in the rice market,and unchanged in the TV market. 
B) higher in the rice and steel markets,and unchanged in the TV market. 
C) lower in the rice and TV markets,and higher in the steel market. 
D) lower in the rice and steel markets,and the same in the TV market. 
A) higher in the steel market,lower in the rice market,and unchanged in the TV market. 
B) higher in the rice and steel markets,and unchanged in the TV market. 
C) lower in the rice and TV markets,and higher in the steel market. 
D) lower in the rice and steel markets,and the same in the TV market.

Question 5

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 Boxland's gains from international trade in cardboard amount to

Accepted Answer

A) $145. 
B) $160. 
C) $210. 
D) $320. 
A) $145. 
B) $160. 
C) $210. 
D) $320.

Question 6

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 7

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 and international trade is allowed.Then Boxland's consumers demand

Accepted Answer

A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard.

Question 8

Figure 9-3.The domestic country is China.  
-Refer to Figure 9-3.The increase in total surplus in China when trade is allowed is

Accepted Answer

A) $400. 
B) $500. 
C) $600. 
D) $750. 
A) $400. 
B) $500. 
C) $600. 
D) $750.

Question 9

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5.With trade,total surplus is

Accepted Answer

A) $3,240. 
B) $6,480. 
C) $7,760. 
D) $15,520. 
A) $3,240. 
B) $6,480. 
C) $7,760. 
D) $15,520.

Question 10

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

Accepted Answer

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

Question 11

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 be greater than the world price. 
B) will be equal to the world price. 
C) will be less than the world price. 
D) could be greater than,equal to,or less than the world price;this cannot be determined. 
A) will be greater than the world price. 
B) will be equal to the world price. 
C) will be less than the world price. 
D) could be greater than,equal to,or less than the world price;this cannot be determined.

Question 12

Figure 9-9  
-Refer to Figure 9-9.Total surplus in this market after trade is

Accepted Answer

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

Question 13

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 14

Figure 9-24
The following diagram shows the domestic demand and supply in a market.Assume that the world price in this market is $20 per unit.  
-Refer to Figure 9-24.Suppose the government imposes a tariff of $10 per unit.The amount of revenue collected by the government from the tariff is

Accepted Answer

A) $50. 
B) $100. 
C) $150. 
D) $200. 
A) $50. 
B) $100. 
C) $150. 
D) $200.

Question 15

Figure 9-20
The figure illustrates the market for rice in Vietnam.  
-Refer to Figure 9-20.Vietnam's gains from trade in rice amount to

Accepted Answer

A) 750. 
B) 1,000. 
C) 1,250. 
D) 1,500. 
A) 750. 
B) 1,000. 
C) 1,250. 
D) 1,500.

Question 16

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price,then it must be the case that

Accepted Answer

A) both consumer surplus and producer surplus increase. 
B) consumer surplus increases and producer surplus decreases. 
C) consumer surplus decreases and producer surplus increases. 
D) both consumer surplus and producer surplus decrease. 
A) both consumer surplus and producer surplus increase. 
B) consumer surplus increases and producer surplus decreases. 
C) consumer surplus decreases and producer surplus increases. 
D) both consumer surplus and producer surplus decrease.

Question 17

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.If Isoland allows international trade,then it will be an exporter of peaches if and only if the world price of peaches is

Accepted Answer

A) above $2. 
B) below $4. 
C) above $4. 
D) below $7. 
A) above $2. 
B) below $4. 
C) above $4. 
D) below $7.

Question 18

Relative to a situation in which domestic firms do not compete with foreign firms,firms in countries that engage in free trade

Accepted Answer

A) can realize economies of scale more fully. 
B) have greater market power. 
C) experience larger producer surplus. 
D) All of the above are correct. 
A) can realize economies of scale more fully. 
B) have greater market power. 
C) experience larger producer surplus. 
D) All of the above are correct.

Question 19

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production.These taxes

Accepted Answer

A) benefit the United States as a whole,because they generate revenue for the government.In addition,because the goods are priced below cost,the taxes do not harm domestic consumers. 
B) benefit the United States as a whole,because they generate revenue for the government and increase producer surplus. 
C) harm the United States as a whole,because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue. 
D) harm the United States as a whole,because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue. 
A) benefit the United States as a whole,because they generate revenue for the government.In addition,because the goods are priced below cost,the taxes do not harm domestic consumers. 
B) benefit the United States as a whole,because they generate revenue for the government and increase producer surplus. 
C) harm the United States as a whole,because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue. 
D) harm the United States as a whole,because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue.

Question 20

Figure 9-13  
-Refer to Figure 9-13.The price and domestic quantity demanded after trade are

Accepted Answer

A) $8 and 300. 
B) $8 and 900. 
C) $14 and 900. 
D) $14 and 600. 
A) $8 and 300. 
B) $8 and 900. 
C) $14 and 900. 
D) $14 and 600.

Exam 9: Application International Trade: The Winners and Losers From Trade

Figure 9-15 -Refer to Figure 9-15.With trade and without a tariff,the price and domestic quantity demanded are

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2.With free trade,consumer surplus is

The nation of Aquilonia 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 rice,exporting steel,and neither importing nor exporting TVs.We can conclude that producer surplus in Aquilonia is now

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

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.The increase in total surplus in China when trade is allowed is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5.With trade,total surplus is

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

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

Figure 9-9 -Refer to Figure 9-9.Total surplus in this market after trade is

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

Figure 9-24 The following diagram shows the domestic demand and supply in a market.Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24.Suppose the government imposes a tariff of $10 per unit.The amount of revenue collected by the government from the tariff is

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.Vietnam's gains from trade in rice amount to

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price,then it must be the case that

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.If Isoland allows international trade,then it will be an exporter of peaches if and only if the world price of peaches is

Relative to a situation in which domestic firms do not compete with foreign firms,firms in countries that engage in free trade

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production.These taxes

Figure 9-13 -Refer to Figure 9-13.The price and domestic quantity demanded after trade are

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B

Measuring a Nations Income

Measuring a Nations Income: The Economy's Income and Expenditure