Question 1

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

Accepted Answer

Jumanji wi...

Question 2

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) A) and B)
F) A) and C)

Question 3

Figure 9-12 
-Refer to Figure 9-12. With trade, domestic production and domestic consumption, respectively, are

Accepted Answer

A)   1,200 and 800.
B)   1,600 and 800.
C)   800 and 1,200.
D)   800 and 1,600.E) A) and B)
F) A) and C)

Question 4

If the world price of apples is higher than Argentina's domestic price of apples without trade, then Argentina

Accepted Answer

A)   should import apples.
B)   has a comparative advantage in apples.
C)   should produce just enough apples to meet its domestic demand.
D)   should refrain altogether from producing apples.E) A) and D)
F) All of the above

Question 5

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Accepted Answer

A)   better off, its producers of fish will become better off, and on balance the citizens of Denmark will become better off.
B)   worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off.
C)   worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off
D)   better off, its producers of fish will become worse off, and on balance the citizens of Denmark will become better offE) A) and D)
F) B) and D)

Question 6

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.
We can conclude that

Accepted Answer

A)   Brownland became an exporter of wheat.
B)   consumer surplus in Brownland increased by $3 million.
C)   the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left.
D)   this example is inconsistent with the economic theory of international trade.E) A) and D)
F) All of the above

Question 7

If a country is an exporter of a good, then it must be the case that

Accepted Answer

A)   the world price is less than its domestic price.
B)   consumer surplus is higher than a no trade situation.
C)   the world price is greater than its domestic price.
D)   they used an infant-industry argument to protect its producers.E) All of the above
F) A) and C)

Question 8

One should be especially wary of the national-security argument for restricting trade when that argument is made by

Accepted Answer

A)   representatives of industry.
B)   representatives of the defense establishment.
C)   members of households.
D)   foreign government officials.E) B) and D)
F) A) and D)

Question 9

Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles,

Accepted Answer

A)   Vietnam has a comparative advantage over other countries and Vietnam will import textiles.
B)   Vietnam has a comparative advantage over other countries and Vietnam will export textiles.
C)   other countries have a comparative advantage over Vietnam and Vietnam will import textiles.
D)   other countries have a comparative advantage over Vietnam and Vietnam will export textiles.E) B) and C)
F) A) and B)

Question 10

Trade among nations is ultimately based on

Accepted Answer

A)   absolute advantage.
B)   strategic advantage.
C)   comparative advantage.
D)   technical advantage.E) B) and C)
F) A) and B)

Question 11

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Accepted Answer

A)   P1 and Q2.
B)   P1 and Q1.
C)   P0 and Q0.
D)   P3 and Q1.E) B) and C)
F) A) and C)

Question 12

Figure 9-11 
-Refer to Figure 9-11. Consumer surplus in this market after trade is

Accepted Answer

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

Question 13

Figure 9-15 
-Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Accepted Answer

A)   B.
B)   E.
C)   D + F.
D)   B + D + E + F.E) All of the above
F) A) and B)

Question 14

When a country that imports a particular good imposes an import quota on that good,

Accepted Answer

A)   consumer surplus increases and total surplus increases in the market for that good.
B)   consumer surplus increases and total surplus decreases in the market for that good.
C)   consumer surplus decreases and total surplus increases in the market for that good.
D)   consumer surplus decreases and total surplus decreases in the market for that good.E) A) and D)
F) B) and D)

Question 15

Figure 9-27
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 9-27. If the country allows free trade, how many units will domestic consumers demand and how many units will domestic producers produce?

Accepted Answer

With trade, domestic...

Question 16

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 D)
F) C) and D)

Question 17

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that

Accepted Answer

A)   an import quota has no effect on consumer surplus, while a tariff decreases consumer surplus.
B)   an import quota has no effect on producer surplus, while a tariff decreases producer surplus.
C)   a tariff raises total surplus, while an import quota does not.
D)   a tariff raises revenue for that country's government, while an import quota does not.E) None of the above
F) B) and C)

Question 18

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. In the absence of trade, total surplus in Guatemala is represented by the area

Accepted Answer

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

Question 19

Using the graph below, answer the following questions about hammers.  
a. What is the equilibrium price of hammers before trade?
b. What is the equilibrium quantity of hammers before trade?
c. What is the price of hammers after trade is allowed?
d. What is the quantity of hammers imported after trade is allowed?
e. What is the amount of consumer surplus before trade?
f. What is the amount of consumer surplus after trade?
g. What is the amount of producer surplus before trade?
h. What is the amount of producer surplus after trade?
i. What is the amount of total surplus before trade?
j. What is the amount of total surplus after trade?
k. What is the change in total surplus because of trade?

Accepted Answer

a. $14
b. 90
c. $10
...

Question 20

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

Accepted Answer

A)   confirmation of the virtues of free trade.
B)   confirmation of the infant-industry argument.
C)   confirmation that free trade agreements are not necessary.
D)   confirmation that specialization in absolute advantage works.E) A) and B)
F) B) and C)

Exam 9: Application: International Trade

Figure 9-12 -Refer to Figure 9-12. With trade, domestic production and domestic consumption, respectively, are

Correct Answer
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For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that

Correct Answer
verified

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

Correct Answer
verified
Jumanji wi...
View Answer

One should be especially wary of the national-security argument for restricting trade when that argument is made by

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 the tariff is imposed, domestic consumers

Correct Answer
verified

If a country is an exporter of a good, then it must be the case that

Correct Answer
verified

Trade among nations is ultimately based on

Correct Answer
verified

Correct Answer
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a. $14
b. 90
c. $10
...
View Answer

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

Correct Answer
verified

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

Correct Answer
verified

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, total surplus in Guatemala is represented by the area

Correct Answer
verified

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Correct Answer
verified

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Correct Answer
verified

When a country that imports a particular good imposes an import quota on that good,

Correct Answer
verified

If the world price of apples is higher than Argentina's domestic price of apples without trade, then Argentina

Correct Answer
verified

Correct Answer
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With trade, domestic...
View Answer

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Correct Answer
verified

Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles,

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11. Consumer surplus in this market after trade is

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-12 -Refer to Figure 9-12. With trade, domestic production and domestic consumption, respectively, are

Correct AnswerverifiedShow Answer

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedJumanji wi...View AnswerShow Answer

One should be especially wary of the national-security argument for restricting trade when that argument is made by

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

If a country is an exporter of a good, then it must be the case that

Correct AnswerverifiedShow Answer

Trade among nations is ultimately based on

Correct AnswerverifiedShow Answer

Correct Answerverifieda. $14b. 90c. $10...View AnswerShow Answer

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, total surplus in Guatemala is represented by the area

Correct AnswerverifiedShow Answer

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Correct AnswerverifiedShow Answer

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Correct AnswerverifiedShow Answer

When a country that imports a particular good imposes an import quota on that good,

Correct AnswerverifiedShow Answer

If the world price of apples is higher than Argentina's domestic price of apples without trade, then Argentina

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade, domestic...View AnswerShow Answer

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Correct AnswerverifiedShow Answer

Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles,

Correct AnswerverifiedShow Answer

Figure 9-11 -Refer to Figure 9-11. Consumer surplus in this market after trade is

Correct AnswerverifiedShow Answer

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Jumanji wi...
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a. $14
b. 90
c. $10
...
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With trade, domestic...
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