Question 1

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

Accepted Answer

A) domestic producers become better off, and domestic consumers become worse off. 
B) domestic producers become worse off, and domestic consumers become better off. 
C) domestic producers become better off, but the effect on the well-being of domestic consumers is ambiguous. 
D) domestic consumers become worse off, but the effect on the well-being of domestic producers is ambiguous. 
A) domestic producers become better off, and domestic consumers become worse off. 
B) domestic producers become worse off, and domestic consumers become better off. 
C) domestic producers become better off, but the effect on the well-being of domestic consumers is ambiguous. 
D) domestic consumers become worse off, but the effect on the well-being of domestic producers is ambiguous.

Question 2

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. The increase in total surplus resulting from trade is

Accepted Answer

A) $640, since consumer surplus increases by $1,760 and producer surplus falls by $1,120. 
B) $1,280, since consumer surplus increases by $3,520 and producer surplus falls by $2,240. 
C) $2,240, since consumer surplus increases by $3,240 and producer surplus falls by $1,000. 
D) $2,560, since consumer surplus increases by $7,040 and producer surplus falls by $4,480. 
A) $640, since consumer surplus increases by $1,760 and producer surplus falls by $1,120. 
B) $1,280, since consumer surplus increases by $3,520 and producer surplus falls by $2,240. 
C) $2,240, since consumer surplus increases by $3,240 and producer surplus falls by $1,000. 
D) $2,560, since consumer surplus increases by $7,040 and producer surplus falls by $4,480.

Question 3

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

Question 4

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

Accepted Answer

A) 57 percent said free international trade helped the economy. 
B) 26 percent said free international trade helped the economy. 
C) 30 percent said free international trade hurt the economy. 
D) 16 percent said free international trade hurt the economy. 
A) 57 percent said free international trade helped the economy. 
B) 26 percent said free international trade helped the economy. 
C) 30 percent said free international trade hurt the economy. 
D) 16 percent said free international trade hurt the economy.

Question 5

William and Jamal live in the country of Dumexia. As a result of Dumexia's legalization of international trade in bananas, William becomes better off and Jamal becomes worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Accepted Answer

A) True 
 B)False

Question 6

Refer to Figure 9-15. With the tariff, the price paid and quantity demanded by domestic buyers are

Accepted Answer

A) P1 and Q1. 
B) P1 and Q4. 
C) P2 and Q2. 
D) P2 and Q3. 
A) P1 and Q1. 
B) P1 and Q4. 
C) P2 and Q2. 
D) P2 and Q3.

Question 7

A tariff

Accepted Answer

A) lowers the domestic price of the exported good below the world price. 
B) keeps the domestic price of the exported good the same as the world price. 
C) raises the domestic price of the imported good above the world price. 
D) lowers the domestic price of the imported good below the world price. 
A) lowers the domestic price of the exported good below the world price. 
B) keeps the domestic price of the exported good the same as the world price. 
C) raises the domestic price of the imported good above the world price. 
D) lowers the domestic price of the imported good below the world price.

Question 8

Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?

Accepted Answer

A) Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50. 
B) Consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50. 
C) Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50. 
D) Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150. 
A) Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50. 
B) Consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50. 
C) Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50. 
D) Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150.

Question 9

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

Accepted Answer

A) True 
 B)False

Question 10

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. The price corresponding to the horizontal dotted line on the graph represents the price of cars

Accepted Answer

A) after trade is allowed. 
B) before trade is allowed. 
C) that maximizes total surplus when trade is allowed. 
D) that minimizes the well-being of domestic car producers when trade is allowed. 
A) after trade is allowed. 
B) before trade is allowed. 
C) that maximizes total surplus when trade is allowed. 
D) that minimizes the well-being of domestic car producers when trade is allowed.

Question 11

Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is possible?

Accepted Answer

A) More Danish-produced chips are sold in Denmark. 
B) More foreign-produced chips are sold in Denmark. 
C) Danish consumers of chips become better off. 
D) Total surplus in the Danish chip market increases. 
A) More Danish-produced chips are sold in Denmark. 
B) More foreign-produced chips are sold in Denmark. 
C) Danish consumers of chips become better off. 
D) Total surplus in the Danish chip market increases.

Question 12

A tariff is a

Accepted Answer

A) limit on how much of a good can be exported. 
B) limit on how much of a good can be imported. 
C) tax on an exported good. 
D) tax on an imported good. 
A) limit on how much of a good can be exported. 
B) limit on how much of a good can be imported. 
C) tax on an exported good. 
D) tax on an imported good.

Question 13

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Accepted Answer

A) True 
 B)False

Question 14

Refer to Figure 9-15. For the saddle market, area E represents

Accepted Answer

A) government's revenue from the tariff. 
B) producer surplus after the tariff becomes effective. 
C) the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff. 
D) the decrease in total surplus, relative to the free-trade situation, as a result of the tariff. 
A) government's revenue from the tariff. 
B) producer surplus after the tariff becomes effective. 
C) the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff. 
D) the decrease in total surplus, relative to the free-trade situation, as a result of the tariff.

Question 15

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Accepted Answer

A) True 
 B)False

Question 16

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. 
A) $200. 
B) $400. 
C) $500. 
D) $600.

Question 17

​Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

Accepted Answer

A) True 
 B)False

Question 18

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Accepted Answer

A) the quantity of wine demanded by France, with the tariff, is 18 million bottles per year. 
B) the quantity of wine demanded by France, without the tariff, would be 24 million bottles per year. 
C) the amount of the deadweight loss is 24 million euros per year. 
D) the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff. 
A) the quantity of wine demanded by France, with the tariff, is 18 million bottles per year. 
B) the quantity of wine demanded by France, without the tariff, would be 24 million bottles per year. 
C) the amount of the deadweight loss is 24 million euros per year. 
D) the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff.

Question 19

Figure 9-13  
-Refer to Figure 9-13. The price and domestic quantity demanded after trade are

Accepted Answer

A) $8 and 300. 
B) $8 and 900. 
C) $14 and 900. 
D) $14 and 600. 
A) $8 and 300. 
B) $8 and 900. 
C) $14 and 900. 
D) $14 and 600.

Question 20

Figure 9-5
The figure illustrates the market for tricycles in a country.  
-Refer to Figure 9-5. With trade, total surplus is

Accepted Answer

A) $3,240. 
B) $6,480. 
C) $7,760. 
D) $15,520. 
A) $3,240. 
B) $6,480. 
C) $7,760. 
D) $15,520.

Exam 9: Application: International Trade

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

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. The increase in total surplus resulting from trade is

Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

William and Jamal live in the country of Dumexia. As a result of Dumexia's legalization of international trade in bananas, William becomes better off and Jamal becomes worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Refer to Figure 9-15. With the tariff, the price paid and quantity demanded by domestic buyers are

A tariff

Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

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. The price corresponding to the horizontal dotted line on the graph represents the price of cars

Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is possible?

A tariff is a

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Refer to Figure 9-15. For the saddle market, area E represents

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

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

​Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Figure 9-13 -Refer to Figure 9-13. The price and domestic quantity demanded after trade are

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, total surplus 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

Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.