Question 1

Which of the following is the most accurate statement?

Accepted Answer

A)   The one argument for restricting trade that almost all economists accept as valid is the infant-industry argument.
B)   Almost all economists insist that it is never appropriate to protect "key" industries, even when there are legitimate concerns about national security.
C)   The idea that one nation might want to threaten another nation with a trade restriction is associated with the protection-as-a-bargaining-chip argument for restricting trade.
D)   The protection-as-a-bargaining-chip argument for restricting trade is also known as the infant-industry argument.E) A) and B)
F) B) and C)

Question 2

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

Accepted Answer

A) True 
 B)False

Question 3

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes

Accepted Answer

A)   benefit the United States as a whole, because they generate revenue for the government. In addition, because the goods are priced below cost, the taxes do not harm domestic consumers.
B)   benefit the United States as a whole, because they generate revenue for the government and increase producer surplus.
C)   harm the United States as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue.
D)   harm the United States as a whole, because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue.E) C) and D)
F) B) and C) C

Question 4

A country has a comparative advantage in a product if the world price is than that country's domestic price without trade.

Accepted Answer

The answer of A country has a comparative advantage in...

Question 5

Figure 9-13 
-Refer to Figure 9-13. With trade, domestic production and domestic consumption, respectively, are

Accepted Answer

A)   600 and 300.
B)   600 and 600.
C)   300 and 900.
D)   600 and 900.E) A) and C)
F) A) and B)

Question 6

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. From the figure it is apparent that

Accepted Answer

A)   Guatemala will experience a shortage of coffee if trade is not allowed.
B)   Guatemala will experience a surplus of coffee if trade is not allowed.
C)   Guatemala has a comparative advantage in producing coffee, relative to the rest of the world.
D)   foreign countries have a comparative advantage in producing coffee, relative to Guatemala.E) B) and C)
F) C) and D)

Question 7

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Accepted Answer

A)   $200.
B)   $400.
C)   $500.
D)   $600.E) None of the above
F) B) and D)

Question 8

A tax on an imported good is called a

Accepted Answer

A)   quota.
B)   tariff.
C)   supply tax.
D)   trade tax.E) A) and B)
F) A) and C)

Question 9

Figure 9-17 
-Refer to Figure 9-17. The deadweight loss caused by the tariff is

Accepted Answer

A)   $24.
B)   $72.
C)   $96.
D)   $144.E) B) and C)
F) B) and D) C

Question 10

Figure 9-13 
-Refer to Figure 9-13. With trade, the country

Accepted Answer

A)   exports 200 units of the good.
B)   exports 400 units of the good.
C)   imports 400 units of the good.
D)   imports 600 units of the good.E) B) and C)
F) All of the above

Question 11

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, how many units will domestic consumers demand, and how many units will domestic producers produce?

Accepted Answer

Domestic consumers w...

Question 12

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

Accepted Answer

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

Question 13

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Accepted Answer

Without trade, consu...

Question 14

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

Question 15

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. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric...

Question 16

When a country allows trade and becomes an importer 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) All of the above
F) A) and C)

Question 17

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 
-Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

Accepted Answer

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

Question 18

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 Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)   $145.
B)   $160.
C)   $210.
D)   $320.E) None of the above
F) C) and D) B

Question 19

Trade enhances the economic well-being of a nation in the sense that

Accepted Answer

A)   both domestic producers and domestic consumers of a good become better off with trade, regardless of whether the nation imports or exports the good in question.
B)   the gains of domestic producers of a good exceed the losses of domestic consumers of a good, regardless of whether the nation imports or exports the good in question.
C)   trade results in an increase in total surplus.
D)   trade puts downward pressure on the prices of all goods.E) A) and B)
F) B) and C)

Question 20

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Without trade, consumer surplus amounts to

Accepted Answer

A)   $810.
B)   $1,620.
C)   $3,240.
D)   $6,480.E) A) and D)
F) B) and C)

Exam 9: Application: International Trade

Which of the following is the most accurate statement?

Correct Answer
verified

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

Correct Answer
verified

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes

Correct Answer
verified
C

A country has a comparative advantage in a product if the world price is than that country's domestic price without trade.

Correct Answer
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Figure 9-13 -Refer to Figure 9-13. With trade, domestic production and domestic consumption, respectively, are

Correct Answer
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Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

Correct Answer
verified

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Correct Answer
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A tax on an imported good is called a

Correct Answer
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Figure 9-17 -Refer to Figure 9-17. The deadweight loss caused by the tariff is

Correct Answer
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C

Figure 9-13 -Refer to Figure 9-13. With trade, the country

Correct Answer
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Correct Answer
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Domestic consumers w...
View Answer

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

Correct Answer
verified

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Correct Answer
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Without trade, consu...
View Answer

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

Correct Answer
verified

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. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct Answer
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The equilibrium pric...
View Answer

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

Correct Answer
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Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

Correct Answer
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Correct Answer
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B

Trade enhances the economic well-being of a nation in the sense that

Correct Answer
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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, consumer surplus amounts to

Correct Answer
verified

Exam 9: Application: International Trade

Which of the following is the most accurate statement?

Correct AnswerverifiedShow Answer

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

Correct AnswerverifiedShow Answer

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes

Correct AnswerverifiedC

A country has a comparative advantage in a product if the world price is than that country's domestic price without trade.

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. With trade, domestic production and domestic consumption, respectively, are

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Correct AnswerverifiedShow Answer

A tax on an imported good is called a

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. The deadweight loss caused by the tariff is

Correct AnswerverifiedC

Figure 9-13 -Refer to Figure 9-13. With trade, the country

Correct AnswerverifiedShow Answer

Correct AnswerverifiedDomestic consumers w...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Correct AnswerverifiedWithout trade, consu...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Trade enhances the economic well-being of a nation in the sense that

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, consumer surplus amounts to

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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C

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C

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Domestic consumers w...
View Answer

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Without trade, consu...
View Answer

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The equilibrium pric...
View Answer

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B

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Correct Answer
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