Question 1

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.E) None of the above
F) All of the above

Question 2

Figure 9-3. The domestic country is China. 
-Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is

Accepted Answer

A)   $400.
B)   $500.
C)   $600.
D)   $750.E) None of the above
F) B) and C)

Question 3

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

Accepted Answer

A)   $28,000.
B)   $30,000.
C)   $35,200.
D)   $38,400.E) A) and B)
F) C) and D)

Question 4

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 5

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Accepted Answer

A)   this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade.
B)   this is an indication that the nation has a comparative advantage in producing soybeans.
C)   the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off.
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 6

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Accepted Answer

A) True 
 B)False

Question 7

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Accepted Answer

A)   the country becomes an importer of the good as a result.
B)   the world price exceeds the domestic price of the good that prevailed before international trade was allowed.
C)   other countries have a comparative advantage, relative to the country in question, in producing the good.
D)   total surplus does not change as a result.E) B) and D)
F) B) and C)

Question 8

Figure 9-10. The figure applies to Mexico and the good is rifles. 
-Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Accepted Answer

A)   the number of rifles bought and sold in Mexico.
B)   the number of rifles produced in Mexico.
C)   the number of rifles exported by Mexico.
D)   the number of rifles imported by Mexico.E) All of the above
F) B) and D)

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

The small-economy assumption is necessary to analyze the gains and losses from international trade.

Accepted Answer

A) True 
 B)False

Question 11

When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy, the result was that the country began to import automobiles. The change in policy improved the well-being of that nation in the sense that

Accepted Answer

A)   both producers of automobiles and consumers of automobiles in that nation became better off as a result.
B)   the gains to automobile producers in that nation exceeded the losses of the automobile consumers in that nation.
C)   the gains to automobile consumers in that nation exceeded the losses of the automobile producers in that nation.
D)   even though total surplus in that nation decreased, it was still true that consumer surplus and producer surplus increased.E) A) and C)
F) B) and C)

Question 12

Which of the following is the most accurate statement?

Accepted Answer

A)   Protection is necessary in order for young industries to grow up and be successful.
B)   Protection is not necessary for an industry to grow.
C)   Protection is necessary because if young industries are not protected, they may suffer losses.
D)   Protection may not always be necessary for infant industries, but it has proven to be useful in most cases.E) B) and D)
F) C) and D)

Question 13

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Accepted Answer

A)   foreign competitors that can produce quality textile goods at low cost.
B)   lower prices of goods that are substitutes for clothing.
C)   a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good.
D)   the fact that the minimum wage in the U.S. has failed to keep pace with the cost of living.E) A) and D)
F) All of the above

Question 14

If Freedonia changes its laws to allow international trade in software and the world price is higher than its domestic price, then it must be the case that

Accepted Answer

A)   both consumer surplus and producer surplus increase.
B)   consumer surplus increases and producer surplus decreases.
C)   consumer surplus decreases and producer surplus increases.
D)   both consumer surplus and producer surplus decrease.E) B) and D)
F) A) and B)

Question 15

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

Accepted Answer

A)   gain $100 of producer surplus.
B)   gain $150 of producer surplus.
C)   gain $200 of producer surplus.
D)   gain $300 of producer surplus.E) A) and B)
F) B) and D)

Question 16

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. Producer surplus with free trade is

Accepted Answer

A)   $200.
B)   $450.
C)   $630.
D)   $1,080 E) A) and D)
F) B) and C)

Question 17

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Accepted Answer

A)   People face tradeoffs.
B)   Trade can make everyone better off.
C)   Governments can sometimes improve market outcomes.
D)   Prices rise when the government prints too much money.E) All of the above
F) None of the above

Question 18

Figure 9-21
The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-21. Producer surplus with free trade is

Accepted Answer

A)   $14,000.
B)   $18,000.
C)   $24,000.
D)   $32,000.E) All of the above
F) A) and D)

Question 19

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 20

GATT is an example of a successful unilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Correct Answer
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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

Correct Answer
verified

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Correct Answer
verified

If Freedonia changes its laws to allow international trade in software and the world price is higher than its domestic price, then it must be the case that

Correct Answer
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With which of the Ten Principles of Economics is the study of international trade most closely connected?

Correct Answer
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Correct Answer
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With trade and a tar...
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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. Producer surplus with free trade is

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

Correct Answer
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When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Correct Answer
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When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy, the result was that the country began to import automobiles. The change in policy improved the well-being of that nation in the sense that

Correct Answer
verified

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is

Correct Answer
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Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Correct Answer
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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.

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

Correct Answer
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Correct Answer
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With trade...
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Which of the following is the most accurate statement?

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Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Correct Answer
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GATT is an example of a successful unilateral approach to achieving free trade.

Correct Answer
verified

The small-economy assumption is necessary to analyze the gains and losses from international trade.

Correct Answer
verified

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

Correct Answer
verified

Exam 9: Application: International Trade

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Domestic producers of a good become better off, and domestic consumers of a good become worse off, when a country begins allowing international trade in that good and

Correct AnswerverifiedShow Answer

If Freedonia changes its laws to allow international trade in software and the world price is higher than its domestic price, then it must be the case that

Correct AnswerverifiedShow Answer

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade and a tar...View AnswerShow 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. Producer surplus with free trade is

Correct AnswerAnswered by ExamLex AIShow Answer

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

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When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Correct AnswerverifiedShow Answer

When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy, the result was that the country began to import automobiles. The change in policy improved the well-being of that nation in the sense that

Correct AnswerverifiedShow Answer

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is

Correct AnswerverifiedShow Answer

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade...View AnswerShow Answer

Which of the following is the most accurate statement?

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Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

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GATT is an example of a successful unilateral approach to achieving free trade.

Correct AnswerverifiedShow Answer

The small-economy assumption is necessary to analyze the gains and losses from international trade.

Correct AnswerverifiedShow Answer

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

Correct AnswerverifiedShow Answer

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With trade and a tar...
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With trade...
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