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Figure 9-17 Figure 9-17 -Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus A) increases by $1,200 and producer surplus increases by $600. B) increases by $1,200 and producer surplus decreases by $600. C) decreases by $1,350 and producer surplus increases by $450. D) decreases by $1,350 and producer surplus decreases by $450. -Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus


A) increases by $1,200 and producer surplus increases by $600.
B) increases by $1,200 and producer surplus decreases by $600.
C) decreases by $1,350 and producer surplus increases by $450.
D) decreases by $1,350 and producer surplus decreases by $450.

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

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Figure 9-6 The figure illustrates the market for roses in a country. Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. When the tariff is imposed, domestic consumers A) lose by $200. B) lose by $450. C) gain by $200. D) gain by $450. -Refer to Figure 9-6. When the tariff is imposed, domestic consumers


A) lose by $200.
B) lose by $450.
C) gain by $200.
D) gain by $450.

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

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President Bush imposed temporary tariffs on imported steel in 2002. The reasons for this trade restriction is most consistent with the


A) national-security argument.
B) infant-industry argument.
C) unfair competition argument.
D) protection-as-a-bargaining chip-argument.

E) All of the above
F) B) 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. With free trade, total surplus is A) $500. B) $800. C) $1,000. D) $1,300. -Refer to Figure 9-24. With free trade, total surplus is


A) $500.
B) $800.
C) $1,000.
D) $1,300.

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

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When a government imposes a tariff on a product, the domestic price will equal the world price.

A) True
B) False

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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


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) B) and D)
F) A) and B)

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

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The equilibrium pric...

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Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -When a country allows trade and becomes an exporter of bicycles, A) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country rises. B) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country falls. C) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country rises. D) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country falls. -When a country allows trade and becomes an exporter of bicycles,


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

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

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


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

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When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?


A) The gains of domestic consumers of bottled water exceed the losses of domestic producers of bottled water.
B) The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water.
C) The price paid by domestic consumers of bottled water decreases.
D) The price received by domestic producers of bottled water decreases.

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

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Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers supply? -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers supply?

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Domestic consumers w...

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Figure 9-4. The domestic country is Nicaragua. Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is A) $375. B) $2,000. C) $2,250. D) $8,700. -Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is


A) $375.
B) $2,000.
C) $2,250.
D) $8,700.

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

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Which of the following arguments for trade restrictions is often advanced?


A) Trade restrictions make all Americans better off.
B) Trade restrictions increase economic efficiency.
C) Trade restrictions are necessary for economic growth.
D) Trade restrictions are sometimes necessary for national security.

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

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Figure 9-15 Figure 9-15 -Refer to Figure 9-15. Consumer surplus with the tariff is A) A. B) A + B. C) A + C + G. D) A + B + C + D +E + F. -Refer to Figure 9-15. Consumer surplus with the tariff is


A) A.
B) A + B.
C) A + C + G.
D) A + B + C + D +E + F.

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

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Figure 9-15 Figure 9-15 -Refer to Figure 9-15. The amount of government revenue created by the tariff is A) B. B) E. C) D + F. D) B + D + E + F. -Refer to Figure 9-15. The amount of government revenue created by the tariff is


A) B.
B) E.
C) D + F.
D) B + D + E + F.

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

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Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil


A) will import almonds.
B) will export almonds.
C) will either import almonds or export almonds, but it is not clear from the given information.
D) would have nothing to gain either from exporting or importing almonds.

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

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Figure 9-2 The figure illustrates the market for calculators in a country. Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. As a result of trade, total surplus increases by A) $50. B) $100. C) $250. D) $500. -Refer to Figure 9-2. As a result of trade, total surplus increases by


A) $50.
B) $100.
C) $250.
D) $500.

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

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Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is Scenario 9-2 ā€¢ 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. ā€¢ 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 A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. , where Scenario 9-2 ā€¢ 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. ā€¢ 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 A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. represents the domestic quantity of cardboard demanded, in tons, and Scenario 9-2 ā€¢ 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. ā€¢ 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 A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is Scenario 9-2 ā€¢ 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. ā€¢ 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 A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. , where Scenario 9-2 ā€¢ 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. ā€¢ 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 A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. represents the domestic quantity of cardboard supplied, in tons, and Scenario 9-2 ā€¢ 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. ā€¢ 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 A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660. B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598. C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864. D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. 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


A) benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660.
B) harms Boxlandian consumers by $736 and harms Boxlandian producers by $598.
C) harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864.
D) harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984.

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

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Suppose Japan exports cars to Russia and imports wine from France. This situation suggests


A) Japan has a comparative advantage relative to France in producing wine, and Russia has a comparative advantage to Japan in producing cars.
B) Japan has a comparative advantage relative to Russia in producing cars, and France has a comparative advantage relative to Japan in producing wine.
C) Japan has an absolute advantage relative to Russia in producing cars, and France has an absolute advantage relative to Japan in producing wine.
D) Japan has an absolute advantage relative to France in producing wine, and Russia has an absolute advantage relative to Japan in producing cars.

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

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Figure 9-6 The figure illustrates the market for roses in a country. Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The size of the tariff on roses is A) $4. B) $2. C) -$2. D) $1. -Refer to Figure 9-6. The size of the tariff on roses is


A) $4.
B) $2.
C) -$2.
D) $1.

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

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