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Figure 9-10. The figure applies to Mexico and the good is rifles. Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q<sub>2</sub> - Q<sub>1</sub> is 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. -Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is


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

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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. 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. Suppose the government imposes a tariff of $10 per unit. The deadweight loss caused by the tariff is A) $25. B) $50. C) $75. D) $100. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The deadweight loss caused by the tariff is


A) $25.
B) $50.
C) $75.
D) $100.

E) A) and C)
F) A) and D)

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Figure 9-3. The domestic country is China. Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, China will A) import 100 pencil sharpeners. B) import 250 pencil sharpeners. C) export 150 pencil sharpeners. D) export 250 pencil sharpeners. -Refer to Figure 9-3. With trade, China will


A) import 100 pencil sharpeners.
B) import 250 pencil sharpeners.
C) export 150 pencil sharpeners.
D) export 250 pencil sharpeners.

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

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Chile is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Chile imposes a $7 tariff on chips. Which of the following outcomes is possible?


A) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips decreases; and the quantity of chips imported by Chile decreases.
B) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases.
C) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases.
D) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile does not change.

E) All of the above
F) A) and C)

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​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. ​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After the opening of the baseball market to international trade, producer surplus in the U.S. A) ​increases by the area G. B) ​decreases by the area E + F. C) ​decreases by the area B + E. D) ​increases by the area B + E + G -Refer to figure 9-26. After the opening of the baseball market to international trade, producer surplus in the U.S.


A) ​increases by the area G.
B) ​decreases by the area E + F.
C) ​decreases by the area B + E.
D) ​increases by the area B + E + G

E) All of the above
F) A) and D)

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Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade? -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

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With trade, consumer surplus f...

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Figure 9-1 The figure illustrates the market for coffee in Guatemala. Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is A) $30. B) $90. C) $110. D) $140. -Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is


A) $30.
B) $90.
C) $110.
D) $140.

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

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


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

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

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Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to


A) cause these factories to pay the U.S. minimum wage.
B) increase the rate of technological advance in poor countries so that they can afford to pay higher wages.
C) increase poverty in poor countries and benefit U.S. firms which compete with these imports.
D) harm U.S. firms which compete with these imports.

E) B) and D)
F) None of the above

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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, U.S. producers of peaches


A) will be better off.
B) will be worse off.
C) will be unaffected.
D) will experience a decrease in their collective producer surplus.

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

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


A) domestic producers of the good become better off.
B) domestic consumers of the good become better off.
C) the gains of the winners fall short of the losses of the losers.
D) All of the above are correct.

E) All of the above
F) B) and C)

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Suppose Ecuador imposes a tariff on imported bananas. If the increase in producer surplus is $50 million, the reduction in consumer surplus is $150 million, and the deadweight loss of the tariff is $30 million, then the tariff generates $130 million in revenue for the government.

A) True
B) False

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Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is 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. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It decreases consumer surplus, increases producer surplus, and decreases total surplus. B) It decreases consumer surplus, increases producer surplus, and increases total surplus. C) It decreases consumer surplus, decreases producer surplus, and decreases total surplus. D) It increases consumer surplus, increases producer surplus, and increases total surplus. , where 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. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It decreases consumer surplus, increases producer surplus, and decreases total surplus. B) It decreases consumer surplus, increases producer surplus, and increases total surplus. C) It decreases consumer surplus, decreases producer surplus, and decreases total surplus. D) It increases consumer surplus, increases producer surplus, and increases total surplus. represents the domestic quantity of cardboard demanded, in tons, and 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. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It decreases consumer surplus, increases producer surplus, and decreases total surplus. B) It decreases consumer surplus, increases producer surplus, and increases total surplus. C) It decreases consumer surplus, decreases producer surplus, and decreases total surplus. D) It increases consumer surplus, increases producer surplus, and increases total surplus. represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is 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. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It decreases consumer surplus, increases producer surplus, and decreases total surplus. B) It decreases consumer surplus, increases producer surplus, and increases total surplus. C) It decreases consumer surplus, decreases producer surplus, and decreases total surplus. D) It increases consumer surplus, increases producer surplus, and increases total surplus. , where 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. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It decreases consumer surplus, increases producer surplus, and decreases total surplus. B) It decreases consumer surplus, increases producer surplus, and increases total surplus. C) It decreases consumer surplus, decreases producer surplus, and decreases total surplus. D) It increases consumer surplus, increases producer surplus, and increases total surplus. represents the domestic quantity of cardboard supplied, in tons, and 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. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It decreases consumer surplus, increases producer surplus, and decreases total surplus. B) It decreases consumer surplus, increases producer surplus, and increases total surplus. C) It decreases consumer surplus, decreases producer surplus, and decreases total surplus. D) It increases consumer surplus, increases producer surplus, and increases total surplus. again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?


A) It decreases consumer surplus, increases producer surplus, and decreases total surplus.
B) It decreases consumer surplus, increases producer surplus, and increases total surplus.
C) It decreases consumer surplus, decreases producer surplus, and decreases total surplus.
D) It increases consumer surplus, increases producer surplus, and increases total surplus.

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

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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. 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. With free trade, the domestic price and domestic quantity demanded are A) $30 and 1,200. B) $40 and 800. C) $30 and 800. D) $40 and 1,600. -Refer to Figure 9-21. With free trade, the domestic price and domestic quantity demanded are


A) $30 and 1,200.
B) $40 and 800.
C) $30 and 800.
D) $40 and 1,600.

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

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Figure 9-11 Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is A) A + B. B) A + B + C. C) B + C + D. D) A + B + C + D. -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is


A) A + B.
B) A + B + C.
C) B + C + D.
D) A + B + C + D.

E) B) and D)
F) None of the above

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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. 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. Suppose the government imposes a tariff of $5 per unit. With trade and a tariff, total surplus is A) $1,700. B) $1,800. C) $1,900. D) $2,000. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. With trade and a tariff, total surplus is


A) $1,700.
B) $1,800.
C) $1,900.
D) $2,000.

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

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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. 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, the country A) exports 20 units of the good. B) imports 20 units of the good. C) exports 30 units of the good. D) imports 30 units of the good. -Refer to Figure 9-24. With free trade, the country


A) exports 20 units of the good.
B) imports 20 units of the good.
C) exports 30 units of the good.
D) imports 30 units of the good.

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

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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?


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

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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. 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. Consumer surplus with free trade is A) $4,000. B) $8,000. C) $16,000. D) $18,000. -Refer to Figure 9-21. Consumer surplus with free trade is


A) $4,000.
B) $8,000.
C) $16,000.
D) $18,000.

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

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Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,


A) Mexico has a comparative advantage over other countries and Mexico will export oranges.
B) Mexico has a comparative advantage over other countries and Mexico will import oranges.
C) other countries have a comparative advantage over Mexico and Mexico will export oranges.
D) other countries have a comparative advantage over Mexico and Mexico will import oranges.

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

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