Question 1

Which of the following is not an important question for economic policy raised by the experience of the textile industry?

Accepted Answer

A) How does international trade affect consumer well-being? 
B) Who gains and who loses from free trade among countries? 
C) How do the gains from trade compare to the losses? 
D) Which argument for restricting free trade is politically feasible? 
A) How does international trade affect consumer well-being? 
B) Who gains and who loses from free trade among countries? 
C) How do the gains from trade compare to the losses? 
D) Which argument for restricting free trade is politically feasible?

Question 2

Workers displaced by trade eventually find jobs in

Accepted Answer

A) another country. 
B) the government sector. 
C) the industries in which the country has a comparative advantage. 
D) a different company in the same industry. 
A) another country. 
B) the government sector. 
C) the industries in which the country has a comparative advantage. 
D) a different company in the same industry.

Question 3

​We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

Accepted Answer

A) True 
 B)False

Question 4

​If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

Accepted Answer

A) True 
 B)False

Question 5

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

Accepted Answer

A) True 
 B)False

Question 6

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 7

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Accepted Answer

A) foreign competitors that can produce quality textile goods at low cost. 
B) lower prices of goods that are substitutes for clothing. 
C) a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good. 
D) the fact that the minimum wage in the U.S. has failed to keep pace with the cost of living. 
A) foreign competitors that can produce quality textile goods at low cost. 
B) lower prices of goods that are substitutes for clothing. 
C) a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good. 
D) the fact that the minimum wage in the U.S. has failed to keep pace with the cost of living.

Question 8

Assume the nation of Teeveeland does not trade with the rest of the world. By comparing the world price of televisions to the price of televisions in Teeveeland, we can determine whether

Accepted Answer

A) consumer surplus exceeds producer surplus in Teeveeland. 
B) Teeveeland has an absolute advantage in producing televisions. 
C) Teeveeland has a comparative advantage in producing televisions. 
D) All of the above are correct. 
A) consumer surplus exceeds producer surplus in Teeveeland. 
B) Teeveeland has an absolute advantage in producing televisions. 
C) Teeveeland has a comparative advantage in producing televisions. 
D) All of the above are correct.

Question 9

Figure 9-11  
-Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

Accepted Answer

A) A + B. 
B) A + B + C. 
C) B + C + D. 
D) A + B + C + D. 
A) A + B. 
B) A + B + C. 
C) B + C + D. 
D) A + B + C + D.

Question 10

The world price of a ton of steel is $650. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began

Accepted Answer

A) exporting steel and the price per ton in Russia decreased to $650. 
B) exporting steel and the price per ton in Russia remained at $1,000. 
C) importing steel and the price per ton in Russia decreased to $650. 
D) importing steel and the price per ton in Russia remained at $1,000. 
A) exporting steel and the price per ton in Russia decreased to $650. 
B) exporting steel and the price per ton in Russia remained at $1,000. 
C) importing steel and the price per ton in Russia decreased to $650. 
D) importing steel and the price per ton in Russia remained at $1,000.

Question 11

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 pric

Question 12

Refer to Figure 9-15. The amount of government revenue created by the tariff is

Accepted Answer

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

Question 13

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

Accepted Answer

A) C. 
B) C + B. 
C) A + B + D. 
D) B + C + D. 
A) C. 
B) C + B. 
C) A + B + D. 
D) B + C + D.

Question 14

When a country takes a unilateral approach to free trade, it

Accepted Answer

A) removes trade restrictions on its own. 
B) reduces its trade restrictions while other countries do the same. 
C) does not remove trade restrictions no matter what other countries do. 
D) is willing to trade with multiple countries at once. 
A) removes trade restrictions on its own. 
B) reduces its trade restrictions while other countries do the same. 
C) does not remove trade restrictions no matter what other countries do. 
D) is willing to trade with multiple countries at once.

Question 15

Patterns of trade among nations are primarily determined by

Accepted Answer

A) cultural considerations. 
B) political considerations. 
C) comparative advantage. 
D) differences in the income elasticity of demand among nations. 
A) cultural considerations. 
B) political considerations. 
C) comparative advantage. 
D) differences in the income elasticity of demand among nations.

Question 16

If Argentina exports oranges to the rest of the world, Argentina's producers of oranges are worse off, and Argentina's consumers of oranges are better off, as a result of trade.

Accepted Answer

A) True 
 B)False

Question 17

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 total surplus?

Accepted Answer

With trade

Question 18

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

Question 19

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S.  
-​Refer to figure 9-26. The figure shows that

Accepted Answer

A) ​the U.S. will import baseballs when the market opens to international trade. 
B) ​the U.S. will export baseballs when the market opens to international trade. 
C) ​the U.S. will be a net loser when the market for baseballs opens to international trade. 
D) ​if the U.S. opens its baseball market to international trade, the price will plummet. 
A) ​the U.S. will import baseballs when the market opens to international trade. 
B) ​the U.S. will export baseballs when the market opens to international trade. 
C) ​the U.S. will be a net loser when the market for baseballs opens to international trade. 
D) ​if the U.S. opens its baseball market to international trade, the price will plummet.

Question 20

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. 
A) A. 
B) A + B. 
C) A + B + D. 
D) C.

Exam 9: Application: International Trade

Which of the following is not an important question for economic policy raised by the experience of the textile industry?

Workers displaced by trade eventually find jobs in

​We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

​If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

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.

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Assume the nation of Teeveeland does not trade with the rest of the world. By comparing the world price of televisions to the price of televisions in Teeveeland, we can determine whether

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

The world price of a ton of steel is $650. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began

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 9-15. The amount of government revenue created by the tariff is

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

When a country takes a unilateral approach to free trade, it

Patterns of trade among nations are primarily determined by

If Argentina exports oranges to the rest of the world, Argentina's producers of oranges are worse off, and Argentina's consumers of oranges are better off, as a result of trade.

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

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -​Refer to figure 9-26. The figure shows that

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

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. The figure shows that