Question 1

When a country takes a multilateral approach to free trade, it

Accepted Answer

A)  removes trade restrictions on its own.
B)  reduces its trade restrictions while other countries do the same.
C)  does not remove trade restrictions no matter what other countries do.
D)  is willing to trade with multiple countries at once.E) A) and C)
F) A) and B)

Question 2

Most economists view the United States' experience with trade as

Accepted Answer

A)  one from which no firm conclusions about the virtues of free trade can be reached, due to the relatively short history of international trade in the U.S.
B)  one from which no firm conclusions about the virtues of free trade can be reached, due to the lack of trade within the U.S. throughout most of the early history of the U.S.
C)  an ongoing experiment that confirms the virtues of free trade.
D)  an ongoing experiment that calls into serious question the notion that free trade enhances the economic well-being of a nation.E) B) and C)
F) None of the above

Question 3

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. Before the tariff is imposed, this country

Accepted Answer

A)  imports 200 roses.
B)  imports 400 roses.
C)  exports 200 roses.
D)  exports 400 roses.E) A) and B)
F) A) and C)

Question 4

Several arguments for restricting trade have been advanced. Those arguments do not include

Accepted Answer

A)  the jobs argument.
B)  the protection-as-a-bargaining-chip argument.
C)  the no-deadweight-loss argument.
D)  the infant-industry argument.E) B) and C)
F) None of the above

Question 5

When a country moves away from a free trade position and imposes a tariff on imports, it causes

Accepted Answer

A)  a decrease in total surplus in the market.
B)  a decrease in producer surplus in the market.
C)  an increase in consumer surplus in the market.
D)  a decrease in revenue to the government.E) A) and B)
F) A) and D)

Question 6

Suppose Iran imposes a tariff on lumber. For the tariff to have any effect, it must be the case that

Accepted Answer

A)  Iran is an exporter of lumber.
B)  the domestic quantity of lumber supplied exceeds the domestic quantity of lumber demanded at the world price without the tariff.
C)  the world price without the tariff is less than the price of lumber without trade.
D)  the world price without the tariff is greater than the price of lumber without trade.E) B) and D)
F) A) and B)

Question 7

Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. 
-Refer to Figure 9-18. If Isoland allows international trade and the world price of peaches is $5, then

Accepted Answer

A)  producer surplus will be smaller than it would be if Isoland banned trade.
B)  consumer surplus will be smaller than it would be if Isoland banned trade.
C)  the domestic quantity of peaches demanded will exceed the domestic quantity of peaches supplied.
D)  Isoland will be an importer of peaches.E) C) and D)
F) A) and D)

Question 8

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Accepted Answer

A)  will be greater than the world price.
B)  will be equal to the world price.
C)  will be less than the world price.
D)  could be greater than, equal to, or less than the world price; this cannot be determined.E) A) and C)
F) All of the above

Question 9

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. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus and producer surplus?

Accepted Answer

With trade and a tar...

Question 10

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. When trade in coffee is allowed, producer surplus in Guatemala

Accepted Answer

A)  increases by the area B + D.
B)  increases by the area B + D + G.
C)  decreases by the area C + F.
D)  decreases by the area G.E) C) and D)
F) All of the above

Question 11

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Accepted Answer

Jumanji wi...

Question 12

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, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

With trade...

Question 13

Refer to Figure 9-15. Consumer surplus with the tariff is

Accepted Answer

A)  A.
B)  A + B.
C)  A + C + G.
D)  A + B + C + D +E + F.E) A) and B)
F) B) and C)

Question 14

Figure 9-13 
-Refer to Figure 9-13. With trade, producer surplus is

Accepted Answer

A)  $900.
B)  $1,100.
C)  $1,500.
D)  $2,000.E) B) and C)
F) A) and D)

Question 15

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

Accepted Answer

A)  $11, with 200 tricycles produced in this country and another 320 tricycles imported.
B)  $11, with 360 tricycles produced in this country and another 160 tricycles imported.
C)  $19, with 200 tricycles produced in this country and another 160 tricycles imported.
D)  $19, with 360 tricycles produced in this country and another 320 tricycles imported.E) None of the above
F) A) and B)

Question 16

Suppose Iceland goes from being an isolated country to being an importer of coats. As a result,

Accepted Answer

A)  consumer surplus increases for consumers of coats in Iceland.
B)  producer surplus increases for producers of coats in Iceland.
C)  total surplus remains unchanged in the coat market in Iceland.
D)  it is reasonable to infer that Iceland has a comparative advantage over other countries in coat production.E) B) and C)
F) All of the above

Question 17

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Accepted Answer

A)  lose by $200.
B)  lose by $450.
C)  gain by $200.
D)  gain by $450.E) C) and D)
F) A) and B)

Question 18

Figure 9-23
The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. 
-Refer to Figure 9-23. With free trade allowed, this country

Accepted Answer

A)  exports 5 units of the good.
B)  imports 5 units of the good.
C)  exports 13 units of the good.
D)  imports 13 units of the good.E) C) and D)
F) B) and C)

Question 19

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 free-trade 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.E) C) and D)
F) B) and C)

Question 20

The nation of Spritzland used to prohibit international trade, but now trade is allowed, and Spritzland is exporting wristwatches. Relative to the previous no-trade situation, total surplus in the market for wristwatches in Spritzland has increased.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Correct Answer
verified
With trade...
View Answer

Suppose Iceland goes from being an isolated country to being an importer of coats. As a result,

Correct Answer
verified

Suppose Iran imposes a tariff on lumber. For the tariff to have any effect, it must be the case that

Correct Answer
verified

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Correct Answer
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Refer to Figure 9-15. Consumer surplus with the tariff is

Correct Answer
verified

Figure 9-13 -Refer to Figure 9-13. With trade, producer surplus is

Correct Answer
verified

Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade allowed, this country

Correct Answer
verified

The nation of Spritzland used to prohibit international trade, but now trade is allowed, and Spritzland is exporting wristwatches. Relative to the previous no-trade situation, total surplus in the market for wristwatches in Spritzland has increased.

Correct Answer
verified

When a country moves away from a free trade position and imposes a tariff on imports, it causes

Correct Answer
verified

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 free-trade policy has

Correct Answer
verified

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Before the tariff is imposed, this country

Correct Answer
verified

When a country takes a multilateral approach to free trade, it

Correct Answer
verified

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Correct Answer
verified
Jumanji wi...
View Answer

Most economists view the United States' experience with trade as

Correct Answer
verified

Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. -Refer to Figure 9-18. If Isoland allows international trade and the world price of peaches is $5, then

Correct Answer
verified

Several arguments for restricting trade have been advanced. Those arguments do not include

Correct Answer
verified

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
With trade and a tar...
View Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. When trade in coffee is allowed, producer surplus in Guatemala

Correct Answer
verified

Exam 9: Application: International Trade

Correct AnswerverifiedWith trade...View AnswerShow Answer

Suppose Iceland goes from being an isolated country to being an importer of coats. As a result,

Correct AnswerverifiedShow Answer

Suppose Iran imposes a tariff on lumber. For the tariff to have any effect, it must be the case that

Correct AnswerverifiedShow Answer

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States

Correct AnswerverifiedShow Answer

Refer to Figure 9-15. Consumer surplus with the tariff is

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. With trade, producer surplus is

Correct AnswerverifiedShow Answer

Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade allowed, this country

Correct AnswerverifiedShow Answer

The nation of Spritzland used to prohibit international trade, but now trade is allowed, and Spritzland is exporting wristwatches. Relative to the previous no-trade situation, total surplus in the market for wristwatches in Spritzland has increased.

Correct AnswerverifiedShow Answer

When a country moves away from a free trade position and imposes a tariff on imports, it causes

Correct AnswerverifiedShow Answer

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 free-trade policy has

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Before the tariff is imposed, this country

Correct AnswerverifiedShow Answer

When a country takes a multilateral approach to free trade, it

Correct AnswerverifiedShow Answer

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Correct AnswerverifiedJumanji wi...View AnswerShow Answer

Most economists view the United States' experience with trade as

Correct AnswerverifiedShow Answer

Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. -Refer to Figure 9-18. If Isoland allows international trade and the world price of peaches is $5, then

Correct AnswerverifiedShow Answer

Several arguments for restricting trade have been advanced. Those arguments do not include

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade and a tar...View AnswerShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. When trade in coffee is allowed, producer surplus in Guatemala

Correct AnswerverifiedShow Answer

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With trade...
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Jumanji wi...
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With trade and a tar...
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