Question 1

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

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) None of the above
F) A) and C)

Question 2

Some goods can be produced at low cost only if they are produced in large quantities.This phenomenon is called

Accepted Answer

A)   marginal cost of production.
B)   marginal benefit of size.
C)   economies of scale.
D)   economies of production.E) A) and B)
F) A) and C)

Question 3

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.Then,if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

Accepted Answer

A)   domestic producers of cardboard become better off and domestic consumers of cardboard become better off.
B)   domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.
C)   domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
D)   domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.E) B) and C)
F) A) and B)

Question 4

Figure 9-9 
-Refer to Figure 9-9.Total 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) All of the above
F) A) and C)

Question 5

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

Accepted Answer

A)   A multilateral approach can reduce trade restrictions abroad as well as at home.
B)   A multilateral approach has the potential to result in freer trade.
C)   A multilateral approach requires the agreement of two or more nations.
D)   A multilateral approach may have political advantages.E) A) and B)
F) B) and C)

Question 6

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) None of the above
F) B) and C)

Question 7

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

Accepted Answer

A)   everyone in the country benefits.
B)   the gains of the winners exceed the losses of the losers.
C)   the losses of the losers exceed the gains of the winners.
D)   everyone in the country loses.E) All of the above
F) B) and C)

Question 8

In the market for apples in a certain country,consumer surplus increases and total surplus increases when that country

Accepted Answer

A)   abandons a no-trade policy,adopts a free-trade policy,and becomes an importer of apples.
B)   abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter of apples.
C)   abandons a free-trade policy,adopts a no-trade policy,and becomes an importer of apples.
D)   abandons a free-trade policy,adopts a no-trade policy,and becomes an exporter of apples.E) All of the above
F) C) and D)

Question 9

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. 1 - P0) (Q2 - Q1) . B)  Gains from trade = (1/2) (P1 - P0) (Q2 - Q0)  C)  Gains from trade = (1/2) (P1 - P0) (Q1 + Q2) . D)  Gains from trade = (1/2) (Q1) (P3 - P1) ." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-7.Which of the following is a valid equation for the gains from trade?

Accepted Answer

A)   Gains from trade = (1/2) (P1 - P0) (Q2 - Q1) .
B)   Gains from trade = (1/2) (P1 - P0) (Q2 - Q0) 
C)   Gains from trade = (1/2) (P1 - P0) (Q1 + Q2) .
D)   Gains from trade = (1/2) (Q1) (P3 - P1) .E) B) and D)
F) B) and C)

Question 10

Figure 9-1
The figure illustrates the market for wool in Scotland. 
-Refer to Figure 9-1.With trade,Scotland will

Accepted Answer

A)   export 11 units of wool.
B)   export 5 units of wool.
C)   import 15 units of wool.
D)   import 6 units of wool.E) A) and B)
F) B) and C)

Question 11

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

Accepted Answer

A) True 
 B)False

Question 12

Finland allows trade with the rest of the world.We can determine whether Finland has a comparative advantage in producing pork if we

Accepted Answer

A)   know whether Finland imports or exports pork.
B)   compare the world price of pork to the price of pork that would prevail in Finland if trade with the rest of the world were not allowed.
C)   compare the quantity of pork consumed in Finland with the quantity of pork that would be consumed in Finland if trade with the rest of the world were not allowed.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 13

Figure 9-8.On the diagram below,Q represents the quantity of cars and P represents the price of cars. 
-Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

Accepted Answer

A)   is represented by the area A + B + C.
B)   is represented by the area A + B + D.
C)   is smaller than producer surplus without international trade in cars.
D)   is larger than total surplus without international trade in cars.E) A) and D)
F) A) and C)

Question 14

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

Question 15

Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip.Suppose Denmark removes the tariff.Which of the following outcomes is not possible?

Accepted Answer

A)   More Danish-produced chips are sold in Denmark.
B)   More foreign-produced chips are sold in Denmark.
C)   Danish consumers of chips become better off.
D)   Total surplus in the Danish chip market increases.E) A) and D)
F) A) and B)

Question 16

The world price of a pound of T-bone steak is $9.00.Before Latvia allowed trade in beef,the price of a pound of T-bone steak there was $7.50.Once Latvia began allowing trade in beef with other countries,Latvia began

Accepted Answer

A)   exporting T-bone steak and the price per pound in Latvia remained at $7.50.
B)   exporting T-bone steak and the price per pound in Latvia increased to $9.00.
C)   importing T-bone steak and the price per pound in Latvia remained at $7.50.
D)   importing T-bone steak and the price per pound in Latvia increased to $9.00.E) A) and B)
F) A) and C)

Question 17

The greater the elasticities of supply and demand,the smaller are the gains from trade.

Accepted Answer

A) True 
 B)False

Question 18

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) All of the above
F) None of the above

Question 19

The world price of a simple electronic calculator is $5.00.Before Zimbabwe allowed trade in calculators,the price of a calculator there was $7.50.Once Zimbabwe began allowing trade in calculators with other countries,Zimbabwe began

Accepted Answer

A)   importing calculators and the price of a calculator in Zimbabwe decreased to $5.00.
B)   importing calculators and the price of a calculator in Zimbabwe remained at $7.50.
C)   exporting calculators and the price of a calculator in Zimbabwe decreased to $5.00.
D)   exporting calculators and the price of a calculator in Zimbabwe remained at $7.50.E) A) and B)
F) C) and D)

Question 20

The history of the textile industry raises important questions for economic policy.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.Which of the following is a valid equation for the gains from trade?

Correct Answer
verified

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

Correct Answer
verified

Figure 9-8.On the diagram below,Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

Correct Answer
verified

Some goods can be produced at low cost only if they are produced in large quantities.This phenomenon is called

Correct Answer
verified

The world price of a pound of T-bone steak is $9.00.Before Latvia allowed trade in beef,the price of a pound of T-bone steak there was $7.50.Once Latvia began allowing trade in beef with other countries,Latvia began

Correct Answer
verified

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

Correct Answer
verified

Finland allows trade with the rest of the world.We can determine whether Finland has a comparative advantage in producing pork if we

Correct Answer
verified

The world price of a simple electronic calculator is $5.00.Before Zimbabwe allowed trade in calculators,the price of a calculator there was $7.50.Once Zimbabwe began allowing trade in calculators with other countries,Zimbabwe began

Correct Answer
verified

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

Correct Answer
verified

The history of the textile industry raises important questions for economic policy.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The greater the elasticities of supply and demand,the smaller are the gains from trade.

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

Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip.Suppose Denmark removes the tariff.Which of the following outcomes is not possible?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

In the market for apples in a certain country,consumer surplus increases and total surplus increases when that country

Correct Answer
verified

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.With trade,Scotland will

Correct Answer
verified

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.Which of the following is a valid equation for the gains from trade?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-8.On the diagram below,Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

Correct AnswerverifiedShow Answer

Some goods can be produced at low cost only if they are produced in large quantities.This phenomenon is called

Correct AnswerverifiedShow Answer

The world price of a pound of T-bone steak is $9.00.Before Latvia allowed trade in beef,the price of a pound of T-bone steak there was $7.50.Once Latvia began allowing trade in beef with other countries,Latvia began

Correct AnswerverifiedShow Answer

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

Correct AnswerverifiedShow Answer

Finland allows trade with the rest of the world.We can determine whether Finland has a comparative advantage in producing pork if we

Correct AnswerverifiedShow Answer

The world price of a simple electronic calculator is $5.00.Before Zimbabwe allowed trade in calculators,the price of a calculator there was $7.50.Once Zimbabwe began allowing trade in calculators with other countries,Zimbabwe began

Correct AnswerverifiedShow Answer

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

Correct AnswerverifiedShow Answer

The history of the textile industry raises important questions for economic policy.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The greater the elasticities of supply and demand,the smaller are the gains from trade.

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

Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip.Suppose Denmark removes the tariff.Which of the following outcomes is not possible?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the market for apples in a certain country,consumer surplus increases and total surplus increases when that country

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.With trade,Scotland will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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