Exam 9: Application: International Trade

If Argentina exports oranges to the rest of the world, Argentina's producers of oranges are worse off, and Argentina's consumers of oranges are better off, as a result of trade.

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, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much is the deadweight loss caused by the tariff?

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Within a country, the domestic price of a product will equal the world price if

Figure 9-13 -Refer to Figure 9-13. Consumer surplus before trade is

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

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

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

Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Suppose a country begins to allow international trade in steel. Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel?

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. With free trade, consumer surplus is

In the market for apples in a certain country, consumer surplus increases and total surplus increases when that country

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

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

Since World War II, GATT has been responsible for reducing the average tariff among member countries from about

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," what would happen if there were a decrease in the price of tricycle helmets within this country, given that tricycles and tricycle helmets are complements?

Figure 9-17 -Refer to Figure 9-17. The deadweight loss caused by the tariff is