Question 1

Figure 9-10.The figure applies to Mexico and the good is rifles. 0 and Q0. B)  P1 and Q1. C)  P2 and Q2. D)  P1 and Q0." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-10.The price and quantity of rifles in Mexico before trade is

Accepted Answer

A)   P0 and Q0.
B)   P1 and Q1.
C)   P2 and Q2.
D)   P1 and Q0.E) B) and D)
F) B) and C)

Question 2

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

Accepted Answer

A)   domestic producers gain and domestic consumers lose.
B)   domestic producers lose and domestic consumers gain.
C)   domestic producers and domestic consumers both gain.
D)   domestic producers and domestic consumers both lose.E) B) and C)
F) C) and D)

Question 3

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

Question 4

In a December 2007 New York Times column,Paul Krugman noted that

Accepted Answer

A)   it is difficult to find instances of trade between high-wage countries in the modern era.
B)   it is difficult to find instances of trade between high-wage countries and low-wage countries in the modern era.
C)   the United States now imports more oil and other raw materials from other advanced countries than from the third world.
D)   the United States now imports more manufactured goods from the third world than from other advanced countries.E) A) and C)
F) B) and C)

Question 5

Figure 9-1
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 9-1.With free trade,domestic production and domestic consumption,respectively,are

Accepted Answer

A)   1,200 and 800.
B)   1,600 and 1,200.
C)   1,600 and 800.
D)   1,200 and 1,200E) A) and B)
F) None of the above

Question 6

If Freedonia changes its laws to allow international trade in software and the world price is lower 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) C) and D)
F) All of the above

Question 7

Figure 9-3
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-3.With no trade allowed,what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric...

Question 8

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

Accepted Answer

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

Question 9

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Accepted Answer

A) True 
 B)False

Question 10

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies,the United States will be

Accepted Answer

A)   better off regardless of how Colombia responds.
B)   better off if Colombia removes the subsidies,and will be no worse off if it doesn't.
C)   worse off if Colombia doesn't remove the subsidies in response to the threat.
D)   worse off regardless of how Colombia responds.E) None of the above
F) C) and D)

Question 11

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

Accepted Answer

A)   that country becomes an exporter of pistachios.
B)   that country has a comparative advantage in producing pistachios.
C)   at the world price,the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country.
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 12

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

Accepted Answer

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) B) and D)
F) C) and D)

Question 13

Suppose France imposes a tariff on wine of 3 euros per bottle.If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers,with the tariff,is 8 million bottles per year,then we can conclude that

Accepted Answer

A)   the quantity of wine demanded by France,with the tariff,is 18 million bottles per year.
B)   the quantity of wine demanded by France,without the tariff,would be 24 million bottles per year.
C)   the amount of the deadweight loss is 24 million euros per year.
D)   the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff.E) A) and D)
F) B) and C)

Question 14

The rules established under the General Agreement on Tariffs and Trade (GATT)are enforced by an international body called the World Trade Organization (WTO).

Accepted Answer

A) True 
 B)False

Question 15

Figure 9-10.The figure applies to Mexico and the good is rifles. 0,P0) , (Q2,P1) ,and (Q1,P1) represents A)  Mexico's gains from trade. B)  the amount by which Mexico's gain in consumer surplus exceeds its loss in producer surplus due to trade. C)  Mexico's gain in total surplus due to trade. D)  All of the above are correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-10.The area bounded by the points (Q0,P0) , (Q2,P1) ,and (Q1,P1) represents

Accepted Answer

A)   Mexico's gains from trade.
B)   the amount by which Mexico's gain in consumer surplus exceeds its loss in producer surplus due to trade.
C)   Mexico's gain in total surplus due to trade.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 16

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 $45 and international trade is allowed.Then Boxland's consumers demand

Accepted Answer

A)   110 tons of cardboard and Boxland's producers supply 75 tons of cardboard.
B)   110 tons of cardboard and Boxland's producers supply 96 tons of cardboard.
C)   96 tons of cardboard and Boxland's producers supply 75 tons of cardboard.
D)   96 tons of cardboard and Boxland's producers supply 96 tons of cardboard.E) All of the above
F) A) and B)

Question 17

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Accepted Answer

A) True 
 B)False

Question 18

Suppose that Australia imposes a tariff on imported beef.If the increase in producer surplus is $100 million,the increase in tariff revenue is $200 million,and the reduction in consumer surplus is $500 million,the deadweight loss of the tariff is $300 million.

Accepted Answer

A) True 
 B)False

Question 19

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) A) and C)

Question 20

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

Exam 9: Application: International Trade

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

Correct Answer
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If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies,the United States will be

Correct Answer
verified

Figure 9-1 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 9-1.With free trade,domestic production and domestic consumption,respectively,are

Correct Answer
verified

Suppose France imposes a tariff on wine of 3 euros per bottle.If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers,with the tariff,is 8 million bottles per year,then we can conclude that

Correct Answer
verified

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

Correct Answer
verified

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Correct Answer
verified

When a country allows trade and becomes an exporter of a 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

In a December 2007 New York Times column,Paul Krugman noted that

Correct Answer
verified

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

Correct Answer
verified

The rules established under the General Agreement on Tariffs and Trade (GATT)are enforced by an international body called the World Trade Organization (WTO).

Correct Answer
verified

Suppose that Australia imposes a tariff on imported beef.If the increase in producer surplus is $100 million,the increase in tariff revenue is $200 million,and the reduction in consumer surplus is $500 million,the deadweight loss of the tariff is $300 million.

Correct Answer
verified

Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.The area bounded by the points (Q₀,P₀) , (Q₂,P₁) ,and (Q₁,P₁) represents

Correct Answer
verified

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

Correct Answer
verified

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

Correct Answer
verified

Figure 9-3 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-3.With no trade allowed,what are the equilibrium price and equilibrium quantity in this market?

Correct Answer
verified
The equilibrium pric...
View Answer

A common argument in favor of restricting trade

Correct Answer
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Correct Answer
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Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.The price and quantity of rifles in Mexico before trade is

Correct Answer
verified

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Correct Answer
verified

Exam 9: Application: International Trade

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

Correct AnswerverifiedShow Answer

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies,the United States will be

Correct AnswerverifiedShow Answer

Figure 9-1 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 9-1.With free trade,domestic production and domestic consumption,respectively,are

Correct AnswerverifiedShow Answer

Suppose France imposes a tariff on wine of 3 euros per bottle.If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers,with the tariff,is 8 million bottles per year,then we can conclude that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an exporter of a 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

In a December 2007 New York Times column,Paul Krugman noted that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The rules established under the General Agreement on Tariffs and Trade (GATT)are enforced by an international body called the World Trade Organization (WTO).

Correct AnswerverifiedShow Answer

Suppose that Australia imposes a tariff on imported beef.If the increase in producer surplus is $100 million,the increase in tariff revenue is $200 million,and the reduction in consumer surplus is $500 million,the deadweight loss of the tariff is $300 million.

Correct AnswerverifiedShow Answer

Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.The area bounded by the points (Q0,P0) , (Q2,P1) ,and (Q1,P1) represents

Correct AnswerverifiedShow Answer

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-3 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-3.With no trade allowed,what are the equilibrium price and equilibrium quantity in this market?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

A common argument in favor of restricting trade

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.The price and quantity of rifles in Mexico before trade is

Correct AnswerverifiedShow Answer

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Correct AnswerverifiedShow Answer

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Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.The area bounded by the points (Q₀,P₀) , (Q₂,P₁) ,and (Q₁,P₁) represents

Correct Answer
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Correct Answer
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The equilibrium pric...
View Answer

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