Question 1

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

Accepted Answer

A) export 1,000 units of rice. 
B) export 1,500 units of rice. 
C) import 1,000 units of rice. 
D) import 1,500 units of rice. 
A) export 1,000 units of rice. 
B) export 1,500 units of rice. 
C) import 1,000 units of rice. 
D) import 1,500 units of rice.

Question 2

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 much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer

Question 3

In a December 2007 New York Times column, Paul Krugman noted that

Accepted Answer

A) it is difficult to find instances of trade between high-wage countries in the modern era. 
B) it is difficult to find instances of trade between high-wage countries and low-wage countries in the modern era. 
C) the United States now imports more oil and other raw materials from other advanced countries than from the third world. 
D) the United States now imports more manufactured goods from the third world than from other advanced countries. 
A) it is difficult to find instances of trade between high-wage countries in the modern era. 
B) it is difficult to find instances of trade between high-wage countries and low-wage countries in the modern era. 
C) the United States now imports more oil and other raw materials from other advanced countries than from the third world. 
D) the United States now imports more manufactured goods from the third world than from other advanced countries.

Question 4

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations:  
-Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Accepted Answer

The equilibrium pric

Question 5

Assume, for Vietnam, that the domestic price of textiles without international trade is lower than the world price of textiles. This suggests that, in the production of textiles,

Accepted Answer

A) Vietnam has a comparative advantage over other countries and Vietnam will import textiles. 
B) Vietnam has a comparative advantage over other countries and Vietnam will export textiles. 
C) other countries have a comparative advantage over Vietnam and Vietnam will import textiles. 
D) other countries have a comparative advantage over Vietnam and Vietnam will export textiles. 
A) Vietnam has a comparative advantage over other countries and Vietnam will import textiles. 
B) Vietnam has a comparative advantage over other countries and Vietnam will export textiles. 
C) other countries have a comparative advantage over Vietnam and Vietnam will import textiles. 
D) other countries have a comparative advantage over Vietnam and Vietnam will export textiles.

Question 6

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 many units will be imported?

Accepted Answer

With trade and a tar

Question 7

An import quota

Accepted Answer

A) is preferable to a tariff since an import quota does not create a deadweight loss. 
B) is a tax on imported goods. 
C) reduces the welfare of domestic consumers. 
D) reduces the welfare of domestic producers. 
A) is preferable to a tariff since an import quota does not create a deadweight loss. 
B) is a tax on imported goods. 
C) reduces the welfare of domestic consumers. 
D) reduces the welfare of domestic producers.

Question 8

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil.  
-Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Accepted Answer

A) consumer surplus changes from the area A + B + D to the area A. 
B) producer surplus changes from the area C to the area B + C + D. 
C) total surplus decreases by the area D. 
D) All of the above are correct. 
A) consumer surplus changes from the area A + B + D to the area A. 
B) producer surplus changes from the area C to the area B + C + D. 
C) total surplus decreases by the area D. 
D) All of the above are correct.

Question 9

Figure 9-20
The figure illustrates the market for rice in Vietnam.  
-Refer to Figure 9-20. From the figure it is apparent that

Accepted Answer

A) Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
B) foreign countries have a comparative advantage in producing rice, relative to Vietnam. 
C) Vietnam has an absolute advantage in producing rice, relative to the rest of the world. 
D) foreign countries have an absolute advantage in producing rice, relative to Vietnam. 
A) Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
B) foreign countries have a comparative advantage in producing rice, relative to Vietnam. 
C) Vietnam has an absolute advantage in producing rice, relative to the rest of the world. 
D) foreign countries have an absolute advantage in producing rice, relative to Vietnam.

Question 10

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 and international trade is allowed. Then Boxland's consumers demand

Accepted Answer

A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 
C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. 
D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard.

Question 11

Figure 9-12  
-Refer to Figure 9-12. Producer surplus before trade is

Accepted Answer

A) $14,400. 
B) $16,800. 
C) $21,600. 
D) $24,800. 
A) $14,400. 
B) $16,800. 
C) $21,600. 
D) $24,800.

Question 12

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

Question 13

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles.  
-Refer to Figure 9-19. With free trade, the country for which the figure is drawn will

Accepted Answer

A) export 30 units of textiles. 
B) export 50 units of textiles. 
C) import 30 units of textiles. 
D) import 50 units of textiles. 
A) export 30 units of textiles. 
B) export 50 units of textiles. 
C) import 30 units of textiles. 
D) import 50 units of textiles.

Question 14

​The small country assumption is made in developing models of international trade because it applies to US markets.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Figure 9-7. The figure applies to the nation of Wales and the good is cheese.  
-Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Accepted Answer

A) P1 and Q2. 
B) P1 and Q1. 
C) P0 and Q0. 
D) P3 and Q1. 
A) P1 and Q2. 
B) P1 and Q1. 
C) P0 and Q0. 
D) P3 and Q1.

Question 17

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?

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). 
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).

Question 18

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

Accepted Answer

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. 
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.

Question 19

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

Accepted Answer

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

Question 20

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 many units will domestic consumers demand and how many units will domestic producers supply?

Accepted Answer

With trade and a tariff, domes

Exam 9: Application: International Trade

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

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 much are consumer surplus, producer surplus, and total surplus with trade?

In a December 2007 New York Times column, Paul Krugman noted that

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Assume, for Vietnam, that the domestic price of textiles without international trade is lower than the world price of textiles. This suggests that, in the production of textiles,

An import quota

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. From the figure it is apparent that

Figure 9-12 -Refer to Figure 9-12. Producer surplus before trade is

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

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19. With free trade, the country for which the figure is drawn will

​The small country assumption is made in developing models of international trade because it applies to US markets.

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

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

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?

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

Figure 9-9 -Refer to Figure 9-9. Total surplus in this market after 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

The small country assumption is made in developing models of international trade because it applies to US markets.