Question 1

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

Accepted Answer

A) Total surplus in the domestic country falls. 
B) Producer surplus in the domestic country increases. 
C) The domestic country experiences a deadweight loss. 
D) Revenue is raised for the domestic government. 
A) Total surplus in the domestic country falls. 
B) Producer surplus in the domestic country increases. 
C) The domestic country experiences a deadweight loss. 
D) Revenue is raised for the domestic government.

Question 2

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 3

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,

Accepted Answer

A) consumer surplus changes from the area A + B + D to the area A. 
B) producer surplus changes from the area C to the area B + C + D. 
C) total surplus decreases by the area D. 
D) All of the above are correct. 
A) consumer surplus changes from the area A + B + D to the area A. 
B) producer surplus changes from the area C to the area B + C + D. 
C) total surplus decreases by the area D. 
D) All of the above are correct.

Question 4

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Accepted Answer

A) this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. 
B) this is an indication that the nation has a comparative advantage in producing soybeans. 
C) the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off. 
D) All of the above are correct. 
A) this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. 
B) this is an indication that the nation has a comparative advantage in producing soybeans. 
C) the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off. 
D) All of the above are correct.

Question 5

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit.  
-Refer to Figure 9-22.With free trade,the country imports

Accepted Answer

A) 300 units of the good. 
B) 600 units of the good. 
C) 900 units of the good. 
D) 1,200 units of the good. 
A) 300 units of the good. 
B) 600 units of the good. 
C) 900 units of the good. 
D) 1,200 units of the good.

Question 6

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6.When a tariff is imposed in the market,domestic producers

Accepted Answer

A) gain $100 of producer surplus. 
B) gain $150 of producer surplus. 
C) gain $200 of producer surplus. 
D) gain $300 of producer surplus. 
A) gain $100 of producer surplus. 
B) gain $150 of producer surplus. 
C) gain $200 of producer surplus. 
D) gain $300 of producer surplus.

Question 7

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

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 8

An import quota

Accepted Answer

A) is preferable to a tariff since an import quota does not create a deadweight loss. 
B) is a tax on imported goods. 
C) reduces the welfare of domestic consumers. 
D) reduces the welfare of domestic producers. 
A) is preferable to a tariff since an import quota does not create a deadweight loss. 
B) is a tax on imported goods. 
C) reduces the welfare of domestic consumers. 
D) reduces the welfare of domestic producers.

Question 9

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 10

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 11

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 allowed,this country

Accepted Answer

A) exports 5 units of the good. 
B) imports 5 units of the good. 
C) exports 13 units of the good. 
D) imports 13 units of the good. 
A) exports 5 units of the good. 
B) imports 5 units of the good. 
C) exports 13 units of the good. 
D) imports 13 units of the good.

Question 12

Figure 9-12  
-Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

Accepted Answer

A) $54 and 800. 
B) $54 and 1,600. 
C) $42 and 800. 
D) $42 and 1,200. 
A) $54 and 800. 
B) $54 and 1,600. 
C) $42 and 800. 
D) $42 and 1,200.

Question 13

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,

Accepted Answer

A) consumers will gain and producers will lose. 
B) consumers will lose and producers will gain. 
C) both consumers and producers will gain. 
D) both consumers and producers will lose. 
A) consumers will gain and producers will lose. 
B) consumers will lose and producers will gain. 
C) both consumers and producers will gain. 
D) both consumers and producers will lose.

Question 14

When a country moves away from a free trade position and imposes a tariff on imports,it causes

Accepted Answer

A) a decrease in total surplus in the market. 
B) a decrease in producer surplus in the market. 
C) an increase in consumer surplus in the market. 
D) a decrease in revenue to the government. 
A) a decrease in total surplus in the market. 
B) a decrease in producer surplus in the market. 
C) an increase in consumer surplus in the market. 
D) a decrease in revenue to the government.

Question 15

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 16

Figure 9-1
The figure illustrates the market for coffee in Guatemala.  
-Refer to Figure 9-1.When trade in coffee is allowed,consumer surplus in Guatemala

Accepted Answer

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

Question 17

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6.The size of the tariff on roses is

Accepted Answer

A) $4. 
B) $2. 
C) $2 
D) $1. 
A) $4. 
B) $2. 
C) $2 
D) $1.

Question 18

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5.Without trade,producer 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 19

Suppose the world price of a television is $300.Before Paraguay allowed trade in televisions,the price of a television there was $350.Once Paraguay began allowing trade in televisions with other countries,Paraguay began

Accepted Answer

A) importing televisions and the price of a television in Paraguay decreased to $300. 
B) importing televisions and the price of a television in Paraguay remained at $350. 
C) exporting televisions and the price of a television in Paraguay decreased to $300. 
D) exporting televisions and the price of a television in Paraguay remained at $350. 
A) importing televisions and the price of a television in Paraguay decreased to $300. 
B) importing televisions and the price of a television in Paraguay remained at $350. 
C) exporting televisions and the price of a television in Paraguay decreased to $300. 
D) exporting televisions and the price of a television in Paraguay remained at $350.

Question 20

A tariff is a tax placed on

Accepted Answer

A) an exported good and it lowers the domestic price of the good below the world price. 
B) an exported good and it ensures that the domestic price of the good stays the same as the world price. 
C) an imported good and it lowers the domestic price of the good below the world price. 
D) an imported good and it raises the domestic price of the good above the world price. 
A) an exported good and it lowers the domestic price of the good below the world price. 
B) an exported good and it ensures that the domestic price of the good stays the same as the world price. 
C) an imported good and it lowers the domestic price of the good below the world price. 
D) an imported good and it raises the domestic price of the good above the world price.

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

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

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

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,

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. -Refer to Figure 9-22.With free trade,the country imports

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6.When a tariff is imposed in the market,domestic producers

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

An import quota

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

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 9-23 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 allowed,this country

Figure 9-12 -Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

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,

When a country moves away from a free trade position and imposes a tariff on imports,it causes

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

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1.When trade in coffee is allowed,consumer surplus in Guatemala

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6.The size of the tariff on roses is

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

Suppose the world price of a television is $300.Before Paraguay allowed trade in televisions,the price of a television there was $350.Once Paraguay began allowing trade in televisions with other countries,Paraguay began

A tariff is a tax placed on

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