Question 1

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. 
-Refer to Figure 9-19. With free trade, the country for which the figure is drawn will

Accepted Answer

A)   export 30 units of textiles.
B)   export 50 units of textiles.
C)   import 30 units of textiles.
D)   import 50 units of textiles.E) B) and D)
F) None of the above

Question 2

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 is the deadweight loss caused by the tariff?

Accepted Answer

The deadwe...

Question 3

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 B)

Question 4

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Accepted Answer

A) True 
 B)False

Question 5

A tariff on a product

Accepted Answer

A)   is a direct quantitative restriction on the amount of a good that can be imported.
B)   increases the domestic quantity supplied.
C)   increases domestic consumer surplus.
D)   All of the above are correct.E) A) and C)
F) A) and B) B

Question 6

A tariff is a tax placed on

Accepted Answer

A)   an exported good and it lowers the domestic price of the good below the world price.
B)   an exported good and it ensures that the domestic price of the good stays the same as the world price.
C)   an imported good and it lowers the domestic price of the good below the world price.
D)   an imported good and it raises the domestic price of the good above the world price.E) A) and D)
F) C) and D)

Question 7

Import quotas and tariffs produce similar results. Which of the following is not one of those results?

Accepted Answer

A)   The domestic price of the good increases.
B)   Consumer surplus of domestic consumers increases.
C)   Producer surplus of domestic producers increases.
D)   A deadweight loss is experienced by the domestic country.E) A) and C)
F) None of the above

Question 8

Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 9

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. With free trade, producer surplus is

Accepted Answer

A)   $845.
B)   $1,620.
C)   $1,690.
D)   $3,240.E) All of the above
F) A) and D) B

Question 10

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

Accepted Answer

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

Question 11

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

Question 12

A common argument in favor of restricting trade

Accepted Answer

A)   concerns the strategy of bargaining.
B)   is that efforts should be made to get new industries started.
C)   emphasizes the belief that all countries should play by the same rules.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 13

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

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 B)
F) C) and D)

Question 14

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Accepted Answer

A)   Ireland has a comparative advantage relative to the United States in producing pineapples, and China has a comparative advantage relative to Ireland in producing beer.
B)   Ireland has a comparative advantage relative to China in producing beer, and the United States has a comparative advantage relative to Ireland in producing pineapples.
C)   Ireland has an absolute advantage relative to the United States in producing pineapples, and China has an absolute advantage relative to Ireland in producing beer.
D)   Ireland has an absolute advantage relative to China in producing beer, and the United States has an absolute advantage relative to Ireland in producing pineapples.E) A) and B)
F) A) and C)

Question 15

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular 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 B)
F) None of the above

Question 16

If the world price of coffee is lower than Colombia's domestic price of coffee without trade, then Colombia

Accepted Answer

A)   should import coffee.
B)   has a comparative advantage in coffee.
C)   should produce just enough coffee to satisfy domestic demand.
D)   should produce no coffee domestically.E) A) and B)
F) A) and D)

Question 17

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 B)
F) A) and C)

Question 18

Figure 9-28
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-28. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium price is $4 and the equilibrium quantity is 20 units.

Question 19

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

Accepted Answer

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

Question 20

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19. With free trade, the country for which the figure is drawn will

Correct Answer
verified

Correct Answer
verified
The deadwe...
View 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 Answer
verified

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Correct Answer
verified

A tariff on a product

Correct Answer
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B

A tariff is a tax placed on

Correct Answer
verified

Import quotas and tariffs produce similar results. Which of the following is not one of those results?

Correct Answer
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Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

Correct Answer
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Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, producer surplus is

Correct Answer
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B

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

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

A common argument in favor of restricting trade

Correct Answer
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When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct Answer
verified

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Correct Answer
verified

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good,

Correct Answer
verified

If the world price of coffee is lower than Colombia's domestic price of coffee without trade, then Colombia

Correct Answer
verified

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 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct Answer
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The equilibrium price is $4 and the equilibrium quantity is 20 units.

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

Correct Answer
verified

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19. With free trade, the country for which the figure is drawn will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe deadwe...View AnswerShow 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

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Correct AnswerverifiedShow Answer

A tariff on a product

Correct AnswerverifiedB

A tariff is a tax placed on

Correct AnswerverifiedShow Answer

Import quotas and tariffs produce similar results. Which of the following is not one of those results?

Correct AnswerverifiedShow Answer

Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

Correct AnswerverifiedShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, producer surplus is

Correct AnswerverifiedB

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

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

A common argument in favor of restricting trade

Correct AnswerverifiedShow Answer

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct AnswerverifiedShow Answer

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Correct AnswerverifiedShow Answer

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good,

Correct AnswerverifiedShow Answer

If the world price of coffee is lower than Colombia's domestic price of coffee without trade, then Colombia

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 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct AnswerverifiedThe equilibrium price is $4 and the equilibrium quantity is 20 units.

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

Correct AnswerverifiedShow Answer

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Correct AnswerverifiedShow Answer

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The deadwe...
View Answer

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B

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B

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The equilibrium price is $4 and the equilibrium quantity is 20 units.

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