Question 1

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

Accepted Answer

A)   imports Q2 - Q1 units of cheese.
B)   exports Q2 - Q1 units of cheese.
C)   imports Q2 - Q0 units of cheese.
D)   exports Q2 - Q0 units of cheese.E) A) and D)
F) A) and C)

Question 2

When a country takes a unilateral 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) None of the above
F) B) and C)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

A tariff

Accepted Answer

A)   lowers the domestic price of the exported good below the world price.
B)   keeps the domestic price of the exported good the same as the world price.
C)   raises the domestic price of the imported good above the world price.
D)   lowers the domestic price of the imported good below the world price.E) None of the above
F) All of the above

Question 5

Figure 9-17 
-Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff

Accepted Answer

A)   decreases imports of the good by 16 units and increases domestic production of the good by 8 units.
B)   decreases imports of the good by 16 units and increases domestic production of the good by 16 units.
C)   decreases imports of the good by 24 units and increases domestic production of the good by 8 units.
D)   decreases imports of the good by 24 units and increases domestic production of the good by 24 units.E) None of the above
F) A) and B)

Question 6

Figure 9-25
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. 
-Refer to Figure 9-25. With free trade and a $5 per unit tariff, the country

Accepted Answer

A)   exports 20 units of the good.
B)   imports 20 units of the good.
C)   exports 40 units of the good.
D)   imports 40 units of the good.E) None of the above
F) B) and C)

Question 7

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

The equilibrium pric...

Question 9

After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Accepted Answer

A)   the domestic price of coffee will be greater than the world price of coffee.
B)   the domestic price of coffee will be lower than the world price of coffee.
C)   the domestic price of coffee will equal the world price of coffee.
D)   The world price of coffee does not matter; the domestic price of coffee prevails.E) B) and C)
F) All of the above

Question 10

Figure 9-11 
-Refer to Figure 9-11. Producer surplus plus consumer surplus in this market before trade is

Accepted Answer

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

Question 11

Figure 9-3. The domestic country is China. 
-Refer to Figure 9-3. With trade, China will

Accepted Answer

A)   import 100 pencil sharpeners.
B)   import 250 pencil sharpeners.
C)   export 150 pencil sharpeners.
D)   export 250 pencil sharpeners.E) All of the above
F) B) and D)

Question 12

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 if the world price of peaches is $5, then

Accepted Answer

A)   Isoland has a comparative advantage, relative to other countries, in producing peaches.
B)   Isoland will import peaches.
C)   consumer surplus with trade exceeds consumer surplus without trade.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 13

Scenario 9-2
• For a small country called Boxland, the equation of the domestic demand curve for cardboard is
  where
   represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard.
• For Boxland, the equation of the domestic supply curve for cardboard is
  where
   represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard.
-Refer to Scenario 9-2. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is

Accepted Answer

A)   $36 and the equilibrium quantity of cardboard is 74 tons.
B)   $44 and the equilibrium quantity of cardboard is 88 tons.
C)   $52 and the equilibrium quantity of cardboard is 96 tons.
D)   $60 and the equilibrium quantity of cardboard is 100 tons.E) A) and B)
F) B) and D)

Question 14

When a country allows trade and becomes an importer of jet skis,

Accepted Answer

A)   domestic producers of jet skis are worse off, domestic consumers of jet skis are better off, and the economic well-being of the country rises.
B)   domestic producers of jet skis are worse off, domestic consumers of jet skis are better off, and the economic well-being of the country falls.
C)   domestic producers of jet skis are better off, domestic consumers of jet skis are worse off, and the economic well-being of the country rises.
D)   domestic producers of jet skis are better off, domestic consumers of jet skis are worse off, and the economic well-being of the country falls.E) A) and B)
F) B) and C)

Question 15

At present, the United States uses a system of quotas to limit the amount of sugar imported into the country. Which of the following statements is most likely true?

Accepted Answer

A)   The quotas are probably the result of lobbying from U.S. consumers of sugar. The quotas increase consumer surplus for the United States, reduce producer surplus for the United States, and harm foreign sugar producers.
B)   The quotas are probably the result of lobbying from U.S. producers of sugar. The quotas increase producer surplus for the United States, reduce consumer surplus for the United States, and harm foreign sugar producers.
C)   The quotas are probably the result of lobbying from foreign producers of sugar. The quotas reduce producer surplus for the United States, increase consumer surplus for the United States, and benefit foreign sugar producers.
D)   U.S. lawmakers did not need to be lobbied to impose the quotas because total surplus for the United States is higher with the quotas than without them.E) C) and D)
F) B) and D)

Question 16

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so

Accepted Answer

A)   because it is impossible to analyze the gains and losses from international trade without making this assumption.
B)   because then we can assume that world prices of goods are unaffected by that country's participation in international trade.
C)   in order to rule out the possibility of tariffs or quotas.
D)   All of the above are correct.E) None of the above
F) A) and D)

Question 17

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 much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer...

Question 18

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. If this country allows free trade in tricycles,

Accepted Answer

A)   consumers will gain more than producers will lose.
B)   producers will gain more than consumers will lose.
C)   producers and consumers will both gain equally.
D)   producers and consumers will both lose equally.E) C) and D)
F) B) and D)

Question 19

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

Accepted Answer

A)   domestic producers become better off, and domestic consumers become worse off.
B)   domestic producers become worse off, and domestic consumers become better off.
C)   domestic consumers become better off, but the effect on the well-being of domestic producers is ambiguous.
D)   domestic producers become worse off, but the effect on the well-being of domestic consumers is ambiguous.E) A) and B)
F) A) and C)

Question 20

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Accepted Answer

A)   the country will be an exporter of the good.
B)   the country will be an importer of the good.
C)   the country will be neither an exporter nor an importer of the good.
D)   Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.E) A) and D)
F) None of the above

Exam 9: Application: International Trade

Figure 9-17 -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff

Correct Answer
verified

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. With free trade and a $5 per unit tariff, the country

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

A tariff

Correct Answer
verified

At present, the United States uses a system of quotas to limit the amount of sugar imported into the country. Which of the following statements is most likely true?

Correct Answer
verified

After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Correct Answer
verified

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, China will

Correct Answer
verified

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Correct Answer
verified

When a country allows trade and becomes an importer of jet skis,

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 if the world price of peaches is $5, then

Correct Answer
verified

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

Correct Answer
verified

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Correct Answer
verified

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 much are consumer surplus, producer surplus, and total surplus with trade?

Correct Answer
verified
With trade, consumer...
View Answer

Correct Answer
verified

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so

Correct Answer
verified

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

Correct Answer
verified
The equilibrium pric...
View Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,

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, Wales

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market before trade is

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-17 -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff

Correct AnswerverifiedShow Answer

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. With free trade and a $5 per unit tariff, the country

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A tariff

Correct AnswerverifiedShow Answer

At present, the United States uses a system of quotas to limit the amount of sugar imported into the country. Which of the following statements is most likely true?

Correct AnswerverifiedShow Answer

After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Correct AnswerverifiedShow Answer

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, China will

Correct AnswerverifiedShow Answer

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an importer of jet skis,

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 if the world price of peaches is $5, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Correct AnswerverifiedShow Answer

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 much are consumer surplus, producer surplus, and total surplus with trade?

Correct AnswerverifiedWith trade, consumer...View AnswerShow Answer

Correct AnswerverifiedShow Answer

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,

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, Wales

Correct AnswerverifiedShow Answer

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market before trade is

Correct AnswerverifiedShow Answer

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With trade, consumer...
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The equilibrium pric...
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