Question 1

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

Accepted Answer

A) True 
 B)False

Question 2

If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.

Accepted Answer

A) True 
 B)False

Question 3

Scenario 9-2
Suppose domestic demand and domestic supply in a market are given by the following equations: $$\begin{array} { l } 
Q ^ { D } = 20 - P \
Q ^ { S } = P
\end{array}$$ ​
-Refer to Scenario 9-2. 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?

Accepted Answer

The answer of Scenario 9-2
Suppose domestic demand and domestic supply...

Question 4

Figure 9-1
​
 Uganda

-Refer to Figure 9-1. From the figure it is apparent that

Accepted Answer

A) Uganda will experience a shortage of coffee if trade is not allowed. 
B) Uganda will experience a surplus of coffee if trade is not allowed. 
C) Uganda has a comparative advantage in producing coffee, relative to the rest of the world. 
D) foreign countries have a comparative advantage in producing coffee, relative to Uganda.

Question 5

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

Accepted Answer

A) True 
 B)False

Question 6

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Accepted Answer

The answer of Suppose the world price of coffee is...

Question 7

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

Accepted Answer

A) importing televisions and the price of a television in Paraguay decreased to $300. 
B) importing televisions and the price of a television in Paraguay remained at $350. 
C) exporting televisions and the price of a television in Paraguay decreased to $300. 
D) exporting televisions and the price of a television in Paraguay remained at $350.

Question 8

Scenario 9-2
Suppose domestic demand and domestic supply in a market are given by the following equations: $$\begin{array} { l } 
Q ^ { D } = 20 - P \
Q ^ { S } = P
\end{array}$$ ​
-Refer to Scenario 9-2. Suppose the world price in this market is $8 per unit. If the country allows free trade, how much are consumer surplus, producer surplus, and producer surplus with trade?

Accepted Answer

The answer of Scenario 9-2
Suppose domestic demand and domestic supply...

Question 9

When markets open up to international trade, we know that total surplus will rise.
​

Accepted Answer

A) True 
 B)False

Question 10

The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began

Accepted Answer

A) exporting almonds and the price per pound in Uruguay remained at $3.00. 
B) exporting almonds and the price per pound in Uruguay increased to $4.50. 
C) importing almonds and the price per pound in Uruguay remained at $3.00. 
D) importing almonds and the price per pound in Uruguay increased to $4.50.

Question 11

Scenario 9-2
Suppose domestic demand and domestic supply in a market are given by the following equations: $$\begin{array} { l } 
Q ^ { D } = 20 - P \
Q ^ { S } = P
\end{array}$$ ​
-Refer to Scenario 9-2. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

Accepted Answer

The answer of Scenario 9-2
Suppose domestic demand and domestic supply...

Question 12

Figure 9-3 
-Refer to Figure 9-3. The amount of deadweight loss caused by the tariff equals

Accepted Answer

A) $100. 
B) $200. 
C) $50. 
D) $300.

Question 13

Figure 9-9
The following diagram shows the domestic demand and domestic supply curves in a market.  ​
-Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

The answer of Figure 9-9
The following diagram shows the domestic...

Question 14

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

Accepted Answer

A) A multilateral approach can reduce trade restrictions abroad as well as at home. 
B) A multilateral approach has the potential to result in freer trade. 
C) A multilateral approach requires the agreement of two or more nations. 
D) A multilateral approach may have political advantages.

Question 15

Figure 9-10
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 9-10. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how many units will be imported?

Accepted Answer

The answer of Figure 9-10
The following diagram shows the domestic...

Question 16

Figure 9-3 
-Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers

Accepted Answer

A) gain $200 of producer surplus. 
B) gain $150 of producer surplus. 
C) gain $50 of producer surplus. 
D) gain $100 of producer surplus.

Question 17

Figure 9-6 
-Zelzar 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. Which groups in Zelzar are better off as a result of the new free-trade policy?

Accepted Answer

A) producers of incense and consumers of steel 
B) consumers of all three goods 
C) consumers of incense and producers of rugs 
D) producers of steel and consumers of incense

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-8
The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit.  ​
-Refer to Figure 9-8. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The answer of Figure 9-8
The following diagram shows the domestic...

Question 20

Scenario 9-1
​
For a small country called Boxland, the equation of the domestic demand curve for cardboard is QS1U1P1DS1S1P0 = 210 − 2P, where QS1U1P1DS1S1P0 represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is QS1U1P1SS1S1P0 = -90 + 3P, where QS1U1P1SS1S1P0 represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard.
-Refer to Scenario 9-1. Suppose the world price of cardboard is $82.5. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?

Accepted Answer

A) It decreases consumer surplus, increases producer surplus, and increases total surplus. 
B) It decreases consumer surplus, increases producer surplus, and decreases total surplus. 
C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. 
D) It increases consumer surplus, decreases producer surplus, and increases total surplus.

Exam 9: Application: International Trade

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.

Figure 9-1 Uganda -Refer to Figure 9-1. From the figure it is apparent that

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

When markets open up to international trade, we know that total surplus will rise.

The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began

Figure 9-3 -Refer to Figure 9-3. The amount of deadweight loss caused by the tariff equals

Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

Figure 9-3 -Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers

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 9-8 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-8. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Exam 9: Application: International Trade

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.

Figure 9-1 ​ Uganda -Refer to Figure 9-1. From the figure it is apparent that

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

When markets open up to international trade, we know that total surplus will rise. ​

The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began

Figure 9-3 -Refer to Figure 9-3. The amount of deadweight loss caused by the tariff equals

Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. ​ -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

Figure 9-3 -Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers

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 9-8 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. ​ -Refer to Figure 9-8. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Figure 9-1 Uganda -Refer to Figure 9-1. From the figure it is apparent that

When markets open up to international trade, we know that total surplus will rise.

Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Figure 9-8 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-8. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?