Question 1

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

Accepted Answer

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

Question 2

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 3

Figure 9-4.The domestic country is Nicaragua.  
-Refer to Figure 9-4.Which of the following statements is accurate?

Accepted Answer

A) Consumer surplus with trade is $3,200. 
B) Producer surplus with trade is $375. 
C) The gains from trade amount to $800. 
D) The gains from trade are represented on the graph by the area bounded by the points (0,$12), (300,$12), (300,$7)and (0,$7). 
A) Consumer surplus with trade is $3,200. 
B) Producer surplus with trade is $375. 
C) The gains from trade amount to $800. 
D) The gains from trade are represented on the graph by the area bounded by the points (0,$12), (300,$12), (300,$7)and (0,$7).

Question 4

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

Accepted Answer

A) $640,since consumer surplus increases by $1,760 and producer surplus falls by $1,120. 
B) $1,280,since consumer surplus increases by $3,520 and producer surplus falls by $2,240. 
C) $2,240,since consumer surplus increases by $3,240 and producer surplus falls by $1,000. 
D) $2,560,since consumer surplus increases by $7,040 and producer surplus falls by $4,480. 
A) $640,since consumer surplus increases by $1,760 and producer surplus falls by $1,120. 
B) $1,280,since consumer surplus increases by $3,520 and producer surplus falls by $2,240. 
C) $2,240,since consumer surplus increases by $3,240 and producer surplus falls by $1,000. 
D) $2,560,since consumer surplus increases by $7,040 and producer surplus falls by $4,480.

Question 5

Figure 9-17  
-Refer to Figure 9-17.The amount of revenue collected by the government from the tariff is

Accepted Answer

A) $32. 
B) $288. 
C) $368. 
D) $720. 
A) $32. 
B) $288. 
C) $368. 
D) $720.

Question 6

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

Accepted Answer

A) The domestic price of the good increases. 
B) Consumer surplus of domestic consumers increases. 
C) Producer surplus of domestic producers increases. 
D) A deadweight loss is experienced by the domestic country. 
A) The domestic price of the good increases. 
B) Consumer surplus of domestic consumers increases. 
C) Producer surplus of domestic producers increases. 
D) A deadweight loss is experienced by the domestic country.

Question 7

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

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 $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 9

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

Accepted Answer

A) other countries have a comparative advantage over Colombia in producing coffee. 
B) Colombia has an absolute advantage over other countries in producing coffee. 
C) Colombia will export coffee if international trade is allowed. 
D) Colombian coffee buyers will become worse off if international trade is allowed. 
A) other countries have a comparative advantage over Colombia in producing coffee. 
B) Colombia has an absolute advantage over other countries in producing coffee. 
C) Colombia will export coffee if international trade is allowed. 
D) Colombian coffee buyers will become worse off if international trade is allowed.

Question 10

Figure 9-12  
-Refer to Figure 9-12.Consumer surplus after trade is

Accepted Answer

A) $6,400. 
B) $9,600. 
C) $12,800. 
D) $14,400. 
A) $6,400. 
B) $9,600. 
C) $12,800. 
D) $14,400.

Question 11

The world price of a ton of steel is $1,000.Before Russia allowed trade in steel,the price of a ton of steel there was $650.Once Russia allowed trade in steel with other countries,Russia began

Accepted Answer

A) exporting steel and the price per ton in Russia remained at $650. 
B) exporting steel and the price per ton in Russia increased to $1,000. 
C) importing steel and the price per ton in Russia remained at $650. 
D) importing steel and the price per ton in Russia increased to $1,000. 
A) exporting steel and the price per ton in Russia remained at $650. 
B) exporting steel and the price per ton in Russia increased to $1,000. 
C) importing steel and the price per ton in Russia remained at $650. 
D) importing steel and the price per ton in Russia increased to $1,000.

Question 12

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

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 13

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 Boxland's gains from international trade in cardboard amount to

Accepted Answer

A) $88.75. 
B) $102.50. 
C) $122.50. 
D) $135.00. 
A) $88.75. 
B) $102.50. 
C) $122.50. 
D) $135.00.

Question 14

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

Accepted Answer

A) that country becomes an exporter of beans. 
B) that country has a comparative advantage in producing beans. 
C) at the world price,the quantity of beans supplied in that country exceeds the quantity of beans demanded in that country. 
D) All of the above are correct. 
A) that country becomes an exporter of beans. 
B) that country has a comparative advantage in producing beans. 
C) at the world price,the quantity of beans supplied in that country exceeds the quantity of beans demanded in that country. 
D) All of the above are correct.

Question 15

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6.Without trade,the equilibrium price of roses is

Accepted Answer

A) $4 and the equilibrium quantity is 300. 
B) $3 and the equilibrium quantity is 200. 
C) $3 and the equilibrium quantity is 400. 
D) $2 and the equilibrium quantity is 500. 
A) $4 and the equilibrium quantity is 300. 
B) $3 and the equilibrium quantity is 200. 
C) $3 and the equilibrium quantity is 400. 
D) $2 and the equilibrium quantity is 500.

Question 16

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 and if the world price of peaches is $3,then

Accepted Answer

A) Isoland has a comparative advantage,relative to other countries,in producing peaches. 
B) Isoland will export peaches. 
C) producer surplus with trade exceeds producer surplus without trade. 
D) consumer surplus with trade exceeds consumer surplus without trade. 
A) Isoland has a comparative advantage,relative to other countries,in producing peaches. 
B) Isoland will export peaches. 
C) producer surplus with trade exceeds producer surplus without trade. 
D) consumer surplus with trade exceeds consumer surplus without trade.

Question 17

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

Accepted Answer

A) $210. 
B) $320. 
C) $405. 
D) $910. 
A) $210. 
B) $320. 
C) $405. 
D) $910.

Question 18

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2.Without trade,producer surplus is

Accepted Answer

A) $423. 
B) $845. 
C) $1,690. 
D) $3,380. 
A) $423. 
B) $845. 
C) $1,690. 
D) $3,380.

Question 19

A tariff on a product makes

Accepted Answer

A) domestic sellers better off and domestic buyers worse off. 
B) domestic sellers worse off and domestic buyers worse off. 
C) domestic sellers better off and domestic buyers better off. 
D) domestic sellers worse off and domestic buyers better off. 
A) domestic sellers better off and domestic buyers worse off. 
B) domestic sellers worse off and domestic buyers worse off. 
C) domestic sellers better off and domestic buyers better off. 
D) domestic sellers worse off and domestic buyers better off.

Question 20

Figure 9-10.The figure applies to Mexico and the good is rifles.  
-Refer to Figure 9-10.When trade takes place,the quantity Q2 - Q1 is

Accepted Answer

A) the number of rifles bought and sold in Mexico. 
B) the number of rifles produced in Mexico. 
C) the number of rifles exported by Mexico. 
D) the number of rifles imported by Mexico. 
A) the number of rifles bought and sold in Mexico. 
B) the number of rifles produced in Mexico. 
C) the number of rifles exported by Mexico. 
D) the number of rifles imported by Mexico.

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

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

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 9-4.The domestic country is Nicaragua. -Refer to Figure 9-4.Which of the following statements is accurate?

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

Figure 9-17 -Refer to Figure 9-17.The amount of revenue collected by the government from the tariff is

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

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,

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

Figure 9-12 -Refer to Figure 9-12.Consumer surplus after trade is

The world price of a ton of steel is $1,000.Before Russia allowed trade in steel,the price of a ton of steel there was $650.Once Russia allowed trade in steel with other countries,Russia began

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

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

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6.Without trade,the equilibrium price of roses is

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 and if the world price of peaches is $3,then

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

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2.Without trade,producer surplus is

A tariff on a product makes

Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.When trade takes place,the quantity Q2 - Q1 is

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

Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.When trade takes place,the quantity Q₂ - Q₁ is