Question 1

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

Accepted Answer

A)  $3,600. 
B)  $4,400. 
C)  $5,200. 
D)  $6,600. 
A)  $3,600. 
B)  $4,400. 
C)  $5,200. 
D)  $6,600.

Question 2

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Accepted Answer

A)  the quantity of wine demanded by France, with the tariff, is 18 million bottles per year. 
B)  the quantity of wine demanded by France, without the tariff, would be 24 million bottles per year. 
C)  the amount of the deadweight loss is 24 million euros per year. 
D)  the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff. 
A)  the quantity of wine demanded by France, with the tariff, is 18 million bottles per year. 
B)  the quantity of wine demanded by France, without the tariff, would be 24 million bottles per year. 
C)  the amount of the deadweight loss is 24 million euros per year. 
D)  the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff.

Question 3

Figure 9-11  
-Refer to Figure 9-11. Producer surplus in this market before trade is

Accepted Answer

A)  C. 
B)  B + C. 
C)  A + B + D. 
D)  B + C + D. 
A)  C. 
B)  B + C. 
C)  A + B + D. 
D)  B + C + D.

Question 4

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. With trade, consumer surplus is

Accepted Answer

A)  $3,240. 
B)  $6,480. 
C)  $6,760. 
D)  $13,520. 
A)  $3,240. 
B)  $6,480. 
C)  $6,760. 
D)  $13,520.

Question 5

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

Accepted Answer

A)  $640. 
B)  $1,280. 
C)  $2,560. 
D)  $3,840. 
A)  $640. 
B)  $1,280. 
C)  $2,560. 
D)  $3,840.

Question 6

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

Accepted Answer

A)  $3,600. 
B)  $5,400. 
C)  $7,200. 
D)  $8,100. 
A)  $3,600. 
B)  $5,400. 
C)  $7,200. 
D)  $8,100.

Question 7

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Accepted Answer

A)  Wheatland has a comparative advantage, relative to other countries, in producing corn. 
B)  other countries have a comparative advantage, relative to Wheatland, in producing fish. 
C)  the price of fish in Wheatland exceeds the world price of fish. 
D)  if Wheatland were to allow trade, it would import corn. 
A)  Wheatland has a comparative advantage, relative to other countries, in producing corn. 
B)  other countries have a comparative advantage, relative to Wheatland, in producing fish. 
C)  the price of fish in Wheatland exceeds the world price of fish. 
D)  if Wheatland were to allow trade, it would import corn.

Question 8

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Accepted Answer

A)  Mexico has a comparative advantage over other countries and Mexico will export oranges. 
B)  Mexico has a comparative advantage over other countries and Mexico will import oranges. 
C)  other countries have a comparative advantage over Mexico and Mexico will export oranges. 
D)  other countries have a comparative advantage over Mexico and Mexico will import oranges. 
A)  Mexico has a comparative advantage over other countries and Mexico will export oranges. 
B)  Mexico has a comparative advantage over other countries and Mexico will import oranges. 
C)  other countries have a comparative advantage over Mexico and Mexico will export oranges. 
D)  other countries have a comparative advantage over Mexico and Mexico will import oranges.

Question 9

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit.  
-Refer to Figure 9-24. With free trade, consumer surplus is

Accepted Answer

A)  $400 and producer surplus is $100. 
B)  $400 and producer surplus is $400. 
C)  $900 and producer surplus is $100. 
D)  $900 and producer surplus is $400. 
A)  $400 and producer surplus is $100. 
B)  $400 and producer surplus is $400. 
C)  $900 and producer surplus is $100. 
D)  $900 and producer surplus is $400.

Question 10

List five arguments given to support trade restrictions.

Accepted Answer

The jobs argument; the nationa

Question 11

A quota is

Accepted Answer

A)  a tax placed on imports. 
B)  a limit on the quantity of imports. 
C)  a tax on exports to other countries. 
D)  an excess of exports over imports. 
A)  a tax placed on imports. 
B)  a limit on the quantity of imports. 
C)  a tax on exports to other countries. 
D)  an excess of exports over imports.

Question 12

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new free­trade policy has

Accepted Answer

A)  increased consumer surplus and producer surplus in the incense market. 
B)  increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. 
C)  decreased consumer surplus in both the steel and rug markets. 
D)  decreased consumer surplus in the steel market and increased total surplus in the incense market. 
A)  increased consumer surplus and producer surplus in the incense market. 
B)  increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. 
C)  decreased consumer surplus in both the steel and rug markets. 
D)  decreased consumer surplus in the steel market and increased total surplus in the incense market.

Exam 9: Application: International Trade

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

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Figure 9-11 -Refer to Figure 9-11. Producer surplus in this market before trade is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, consumer surplus is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

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

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. With free trade, consumer surplus is

List five arguments given to support trade restrictions.

A quota is

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new free­trade policy has

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new freetrade policy has