Exam 9: Application: International Trade

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

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

Figure 9-17 -Refer to Figure 9-17. When the country moves from free trade to trade and a tariff, consumer surplus

Which of the following is not a commonly-advanced argument for trade restrictions?

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

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

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

A tax on an imported good is called a

If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price,

The rules established under GATT are enforced by the

Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

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

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

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. With trade, Vietnamese rice producers will produce

A country has a comparative advantage in a product if the world price is

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. When the country for which the figure is drawn allows international trade in cars,

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, the

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

Figure 9-17 -Refer to Figure 9-17. Without trade, consumer surplus is