Question 1

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

Accepted Answer

A)   the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good.
B)   the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good.
C)   the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good.
D)   the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good.E) C) and D)
F) A) and C)

Question 2

Which of the following statements is true?

Accepted Answer

A)   Free trade benefits a country when it exports but harms it when it imports.
B)   "Voluntary" limits on Canadian exports of hogs are better for the United States than U.S.tariffs placed on Canadian hog exports.
C)   Tariffs and quotas differ in that tariffs work like a tax and therefore impose deadweight losses,whereas quotas do not impose deadweight losses.
D)   Free trade benefits a country both when it exports and when it imports.E) A) and C)
F) C) and D)

Question 3

Figure 9-17 
-Refer to Figure 9-17.With free trade,the country imports

Accepted Answer

A)   16 units of the good.
B)   24 units of the good.
C)   60 units of the good.
D)   64 units of the good.E) C) and D)
F) None of the above

Question 4

When a country allows international trade and becomes an importer of a good,domestic producers of the good are better off,and domestic consumers of the good are worse off.

Accepted Answer

A) True 
 B)False

Question 5

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

Accepted Answer

A) True 
 B)False

Question 6

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.E) A) and B)
F) A) and C)

Question 7

In September 2009,President Obama

Accepted Answer

A)   imposed a tariff on tires imported from China;in doing so,the president reneged on an agreement into which the U.S.had entered in 2001.
B)   imposed a tariff on tires imported from China;the tariff was in accordance with an agreement into which the U.S.had entered in 2001.
C)   removed a tariff on tires imported from China;the tariff had been imposed by President George W.Bush.
D)   removed a tariff on tires imported from China;the tariff had been imposed by President Bill Clinton.E) All of the above
F) B) and D)

Question 8

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

Accepted Answer

A)   Consumer surplus decreases by $100;producer surplus increases by $100;and government revenue from the tariff amounts to $50.
B)   Consumer surplus decreases by $200;producer surplus increases by $100;and government revenue from the tariff amounts to $50.
C)   Consumer surplus increases by $100;producer surplus decreases by $200;and government revenue from the tariff amounts to $50.
D)   Consumer surplus decreases by $50;producer surplus increases by $200;and government revenue from the tariff amounts to $150.E) A) and B)
F) C) and D)

Question 9

Figure 9-4
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 9-4.With no trade allowed,what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric...

Question 10

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

Accepted Answer

A)   may prompt Russian farmers to invoke the infant-industry argument.
B)   increase the consumer surplus of Russian buyers of wheat.
C)   decrease the total surplus of the Russian people.
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 11

Import quotas and tariffs both cause the quantity of imports to fall.

Accepted Answer

A) True 
 B)False

Question 12

Figure 9-14.On the diagram below,Q represents the quantity of crude oil and P represents the price of crude oil. 
-Refer to Figure 9-14.When the country for which the figure is drawn allows international trade in crude oil,

Accepted Answer

A)   consumer surplus changes from the area A + B + D to the area A.
B)   producer surplus changes from the area C to the area B + C + D.
C)   total surplus decreases by the area D.
D)   All of the above are correct.E) A) and D)
F) C) and D)

Question 13

Figure 9-10.The figure applies to Mexico and the good is rifles. 1 and Q1. B)  P1 and Q2. C)  P2 and Q2. D)  P0 and Q0." class="answers-bank-image d-inline" rel="preload" >
-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.E) None of the above
F) All of the above

Question 14

The world price of a ton of steel is $1,000.Before Russia allowed trade in steel,the price of a ton of steel there was $650.Once Russia allowed trade in steel with other countries,Russia began

Accepted Answer

A)   exporting steel and the price per ton in Russia remained at $650.
B)   exporting steel and the price per ton in Russia increased to $1,000.
C)   importing steel and the price per ton in Russia remained at $650.
D)   importing steel and the price per ton in Russia increased to $1,000.E) C) and D)
F) B) and D)

Question 15

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

Accepted Answer

A)   $1,600.
B)   $2,400.
C)   $3,200.
D)   $3,600.E) B) and C)
F) A) and D)

Question 16

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

Accepted Answer

A)   A.
B)   A + B.
C)   B + C + D.
D)   C.E) None of the above
F) A) and C)

Question 17

Figure 9-6 
-The before-trade price of fish in Germany is $8.00 per pound.The world price of fish is $6.00 per pound.Germany is a price-taker in the fish market.If Germany allows trade in fish,then Germany will become an

Accepted Answer

A)   importer of fish and the price of fish in Germany will be $6.00.
B)   importer of fish and the price of fish in Germany will be $8.00.
C)   exporter of fish and the price of fish in Germany will be $6.00.
D)   exporter of fish and the price of fish in Germany will be $8.00.E) B) and C)
F) A) and B)

Question 18

According to the principle of comparative advantage,all countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-3
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-3.With no trade allowed,how much are consumer surplus,producer surplus,and total surplus in this market?

Accepted Answer

Consumer surplus is ...

Question 20

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

Accepted Answer

A)   $7,000.
B)   $7,500.
C)   $8,800.
D)   $9,600.E) C) and D)
F) All of the above

Exam 9: Application: International Trade

Figure 9-3 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-3.With no trade allowed,how much are consumer surplus,producer surplus,and total surplus in this market?

Correct AnswerverifiedConsumer surplus is ...View AnswerShow Answer

Figure 9-4 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 9-4.With no trade allowed,what are the equilibrium price and equilibrium quantity in this market?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

In September 2009,President Obama

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Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

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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

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Figure 9-17 -Refer to Figure 9-17.With free trade,the country imports

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The world price of a ton of steel is $1,000.Before Russia allowed trade in steel,the price of a ton of steel there was $650.Once Russia allowed trade in steel with other countries,Russia began

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Figure 9-14.On the diagram below,Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14.When the country for which the figure is drawn allows international trade in crude oil,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a country allows international trade and becomes an importer of a good,domestic producers of the good are better off,and domestic consumers of the good are worse off.

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Import quotas and tariffs both cause the quantity of imports to fall.

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Which of the following statements is true?

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Figure 9-6 -The before-trade price of fish in Germany is $8.00 per pound.The world price of fish is $6.00 per pound.Germany is a price-taker in the fish market.If Germany allows trade in fish,then Germany will become an

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

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

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

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

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According to the principle of comparative advantage,all countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Consumer surplus is ...
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