Exam 9: Application: International Trade

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. In the country for which the figure is drawn, total surplus with international trade in cars

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

Trade decisions are based on the principle of absolute advantage.

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

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

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

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Consumer surplus with free trade is

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

A common argument in favor of restricting international trade in good x is based on the premise that

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

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

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. At the world price and with free trade,

Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. -Refer to Figure 9-29. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how many units will be imported?

Figure 9-9 -Refer to Figure 9-9. Producer surplus in this market before trade is

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, by how much do consumer surplus, producer surplus, and producer surplus change?

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 9-24. Suppose the government imposes a tariff of $10 per unit. The deadweight loss caused by the tariff is

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

William and Jamal live in the country of Dumexia. As a result of Dumexia's legalization of international trade in bananas, William becomes better off and Jamal becomes worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

One should be especially wary of the national-security argument for restricting trade when that argument is made by