Exam 9: Application: International Trade

If the demand curve and the supply curve for a good are straight lines, then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.

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

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for Welsh consumer surplus with trade?

Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia

The greater the elasticities of supply and demand, the smaller are the gains from trade.

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?

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

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 and international trade is allowed. Then Boxland's consumers demand

If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price,

Figure 9-17 -Refer to Figure 9-17. Without trade, total surplus is

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

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

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

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

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,

Trade enhances the economic well-being of a nation in the sense that

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. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs. An economist would argue that