Question 1

Figure 9-10. The figure applies to Mexico and the good is rifles.  
-Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

Accepted Answer

A)  P0 and Q0. 
B)  P1 and Q1. 
C)  P2 and Q2. 
D)  P1 and Q0. 
A)  P0 and Q0. 
B)  P1 and Q1. 
C)  P2 and Q2. 
D)  P1 and Q0.

Question 2

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 3

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 are consumer surplus, producer surplus, tariff revenue, and total surplus?

Accepted Answer

With trade and a tariff, consu

Question 4

Free trade allows firms to realize economies of scale, resulting in higher costs of production.

Accepted Answer

A) True 
 B)False

Question 5

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.
We can conclude that

Accepted Answer

A)  Brownland became an exporter of wheat. 
B)  consumer surplus in Brownland increased by $3 million. 
C)  the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left. 
D)  this example is inconsistent with the economic theory of international trade. 
A)  Brownland became an exporter of wheat. 
B)  consumer surplus in Brownland increased by $3 million. 
C)  the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left. 
D)  this example is inconsistent with the economic theory of international trade.

Question 6

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. The country for which the figure is drawn

Accepted Answer

A)  has a comparative advantage relative to other countries in the production of cars and it will export cars. 
B)  has a comparative advantage relative to other countries in the production of cars and it will import cars. 
C)  has a comparative disadvantage relative to other countries in the production of cars and it will export cars. 
D)  has a comparative disadvantage relative to other countries in the production of cars and it will import cars. 
A)  has a comparative advantage relative to other countries in the production of cars and it will export cars. 
B)  has a comparative advantage relative to other countries in the production of cars and it will import cars. 
C)  has a comparative disadvantage relative to other countries in the production of cars and it will export cars. 
D)  has a comparative disadvantage relative to other countries in the production of cars and it will import cars.

Question 7

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

Accepted Answer

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

Question 8

The two basic approaches that a country can take as a means to achieve free trade are the

Accepted Answer

A)  unilateral approach and the multilateral approach. 
B)  short-run approach and the long-run approach. 
C)  continental approach and the global approach. 
D)  industry approach and the security approach. 
A)  unilateral approach and the multilateral approach. 
B)  short-run approach and the long-run approach. 
C)  continental approach and the global approach. 
D)  industry approach and the security approach.

Question 9

Figure 9-10. The figure applies to Mexico and the good is rifles.  
-Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Accepted Answer

A)  P1 and Q1. 
B)  P1 and Q2. 
C)  P2 and Q2. 
D)  P0 and Q0. 
A)  P1 and Q1. 
B)  P1 and Q2. 
C)  P2 and Q2. 
D)  P0 and Q0.

Question 10

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Accepted Answer

A)  Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar. 
B)  Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions. 
C)  Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar. 
D)  Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions. 
A)  Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar. 
B)  Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions. 
C)  Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar. 
D)  Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions.

Question 11

Figure 9-15  
-Refer to Figure 9-15. For the saddle market, area E represents

Accepted Answer

A)  government's revenue from the tariff. 
B)  producer surplus after the tariff becomes effective. 
C)  the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff. 
D)  the decrease in total surplus, relative to the free-trade situation, as a result of the tariff. 
A)  government's revenue from the tariff. 
B)  producer surplus after the tariff becomes effective. 
C)  the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff. 
D)  the decrease in total surplus, relative to the free-trade situation, as a result of the tariff.

Question 12

A tariff on a product

Accepted Answer

A)  is a direct quantitative restriction on the amount of a good that can be imported. 
B)  increases the domestic quantity supplied. 
C)  increases domestic consumer surplus. 
D)  All of the above are correct. 
A)  is a direct quantitative restriction on the amount of a good that can be imported. 
B)  increases the domestic quantity supplied. 
C)  increases domestic consumer surplus. 
D)  All of the above are correct.

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, 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 14

Figure 9-4. The domestic country is Nicaragua.  
-Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

Accepted Answer

A)  $375. 
B)  $2,000. 
C)  $2,250. 
D)  $8,700. 
A)  $375. 
B)  $2,000. 
C)  $2,250. 
D)  $8,700.

Question 15

When a country that imports a particular good imposes a tariff on that 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 16

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.  
-Refer to Figure 9-16. The tariff

Accepted Answer

A)  decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. 
B)  decreases producer surplus by the area C + D and decreases consumer surplus by the area D + E + F. 
C)  increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. 
D)  increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F. 
A)  decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. 
B)  decreases producer surplus by the area C + D and decreases consumer surplus by the area D + E + F. 
C)  increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. 
D)  increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F.

Question 17

A tax on an imported good is called a .

Accepted Answer

The answer of A tax on an imported good is...

Question 18

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 19

Which of the following arguments for trade restrictions is often advanced?

Accepted Answer

A)  Trade restrictions make all Americans better off. 
B)  Trade restrictions increase economic efficiency. 
C)  Trade restrictions are necessary for economic growth. 
D)  Trade restrictions are sometimes necessary for national security. 
A)  Trade restrictions make all Americans better off. 
B)  Trade restrictions increase economic efficiency. 
C)  Trade restrictions are necessary for economic growth. 
D)  Trade restrictions are sometimes necessary for national security.

Question 20

Tariffs and quotas are different in the sense that

Accepted Answer

A)  tariffs cause deadweight losses, while quotas do not cause deadweight losses. 
B)  tariffs raise revenue for the government, while quotas do not raise revenue for the government. 
C)  tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers. 
D)  tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers. 
A)  tariffs cause deadweight losses, while quotas do not cause deadweight losses. 
B)  tariffs raise revenue for the government, while quotas do not raise revenue for the government. 
C)  tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers. 
D)  tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers.

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

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

Free trade allows firms to realize economies of scale, resulting in higher costs of production.

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

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. The country for which the figure is drawn

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

The two basic approaches that a country can take as a means to achieve free trade are the

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area E represents

A tariff on a product

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

When a country that imports a particular good imposes a tariff on that good,

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The tariff

A tax on an imported good is called a .

Which of the following arguments for trade restrictions is often advanced?

Tariffs and quotas are different in the sense that

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: the Costs of Taxation

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Exam 9: Application: International Trade

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

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

Free trade allows firms to realize economies of scale, resulting in higher costs of production.

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

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. The country for which the figure is drawn

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

The two basic approaches that a country can take as a means to achieve free trade are the

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area E represents

A tariff on a product

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

When a country that imports a particular good imposes a tariff on that good,

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The tariff

A tax on an imported good is called a .

Which of the following arguments for trade restrictions is often advanced?

Tariffs and quotas are different in the sense that

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: the Costs of Taxation

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters