Question 1

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

Accepted Answer

A) government's revenue from the tariff. 
B) the deadweight loss of the tariff. 
C) the increase in producer surplus, relative to the free-trade situation, as a result of the tariff. 
D) None of the above is correct. 
A) government's revenue from the tariff. 
B) the deadweight loss of the tariff. 
C) the increase in producer surplus, relative to the free-trade situation, as a result of the tariff. 
D) None of the above is correct.

Question 2

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, how much are consumer surplus, producer surplus, and total surplus in this market?

Accepted Answer

Consumer surplus is

Question 3

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

Accepted Answer

A) Farmland has a comparative advantage, relative to other countries, in producing beef. 
B) other countries have an absolute advantage, relative to Farmland, in producing beef. 
C) the price of beef in Farmland exceeds the world price of beef. 
D) if Farmland were to allow trade, it would export pepper. 
A) Farmland has a comparative advantage, relative to other countries, in producing beef. 
B) other countries have an absolute advantage, relative to Farmland, in producing beef. 
C) the price of beef in Farmland exceeds the world price of beef. 
D) if Farmland were to allow trade, it would export pepper.

Question 4

Assume, for Mexico, that the domestic price of beets without international trade is higher than the world price of beets. This suggests that, in the production of beets,

Accepted Answer

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

Question 5

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Accepted Answer

A) cannot experience significant gains or losses by trading with other countries. 
B) cannot have a significant comparative advantage over other countries. 
C) cannot affect world prices by trading with other countries. 
D) All of the above are correct. 
A) cannot experience significant gains or losses by trading with other countries. 
B) cannot have a significant comparative advantage over other countries. 
C) cannot affect world prices by trading with other countries. 
D) All of the above are correct.

Question 6

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2. With free trade, this country will

Accepted Answer

A) import 50 calculators. 
B) import 100 calculators. 
C) export 50 calculators. 
D) export 100 calculators. 
A) import 50 calculators. 
B) import 100 calculators. 
C) export 50 calculators. 
D) export 100 calculators.

Question 7

Figure 9-17  
-Refer to Figure 9-17. The amount of revenue collected by the government from the tariff is

Accepted Answer

A) $32. 
B) $288. 
C) $368. 
D) $720. 
A) $32. 
B) $288. 
C) $368. 
D) $720.

Question 8

Both tariffs and import quotas

Accepted Answer

A) increase the quantity of imports and raise the domestic price of the good. 
B) increase the quantity of imports and lower the domestic price of the good. 
C) decrease the quantity of imports and raise the domestic price of the good. 
D) decrease the quantity of imports and lower the domestic price of the good. 
A) increase the quantity of imports and raise the domestic price of the good. 
B) increase the quantity of imports and lower the domestic price of the good. 
C) decrease the quantity of imports and raise the domestic price of the good. 
D) decrease the quantity of imports and lower the domestic price of the good.

Question 9

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 Welsh producer surplus with trade?

Accepted Answer

A) Producer surplus with trade = (1/2)P0Q0. 
B) Producer surplus with trade = (1/2)P1Q1. 
C) Producer surplus with trade = (1/2)P1Q2. 
D) None of the above is correct. 
A) Producer surplus with trade = (1/2)P0Q0. 
B) Producer surplus with trade = (1/2)P1Q1. 
C) Producer surplus with trade = (1/2)P1Q2. 
D) None of the above is correct.

Question 10

Which of the following is the most accurate statement?

Accepted Answer

A) Protection is necessary in order for young industries to grow up and be successful. 
B) Protection is not necessary for an industry to grow. 
C) Protection is necessary because if young industries are not protected, they may suffer losses. 
D) Protection may not always be necessary for infant industries, but it has proven to be useful in most cases. 
A) Protection is necessary in order for young industries to grow up and be successful. 
B) Protection is not necessary for an industry to grow. 
C) Protection is necessary because if young industries are not protected, they may suffer losses. 
D) Protection may not always be necessary for infant industries, but it has proven to be useful in most cases.

Question 11

When, in our analysis of the gains and losses from international trade, we assume that a particular country is small, we are

Accepted Answer

A) assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries. 
B) assuming there is no demand for that country's domestically-produced goods by other countries. 
C) assuming international trade can benefit producers, but not consumers, in that country. 
D) making an assumption that is not necessary to analyze the gains and losses from international trade. 
A) assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries. 
B) assuming there is no demand for that country's domestically-produced goods by other countries. 
C) assuming international trade can benefit producers, but not consumers, in that country. 
D) making an assumption that is not necessary to analyze the gains and losses from international trade.

Question 12

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

Accepted Answer

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

Question 13

A tariff on a product

Accepted Answer

A) is a direct quantitative restriction on the amount of a good that can be imported. 
B) increases the domestic quantity supplied. 
C) increases domestic consumer surplus. 
D) All of the above are correct. 
A) is a direct quantitative restriction on the amount of a good that can be imported. 
B) increases the domestic quantity supplied. 
C) increases domestic consumer surplus. 
D) All of the above are correct.

Question 14

If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia

Accepted Answer

A) should import coffee. 
B) has a comparative advantage in coffee and should export coffee. 
C) should produce just enough coffee to satisfy domestic demand. 
D) should produce no coffee domestically. 
A) should import coffee. 
B) has a comparative advantage in coffee and should export coffee. 
C) should produce just enough coffee to satisfy domestic demand. 
D) should produce no coffee domestically.

Question 15

Figure 9-6
The figure illustrates the market for roses in a country.  
-Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

Accepted Answer

A) gain $100 of producer surplus. 
B) gain $150 of producer surplus. 
C) gain $200 of producer surplus. 
D) gain $300 of producer surplus. 
A) gain $100 of producer surplus. 
B) gain $150 of producer surplus. 
C) gain $200 of producer surplus. 
D) gain $300 of producer surplus.

Question 16

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S.  
-Refer to figure 9-26. Prior to opening the U.S. baseball market to trade, the equilibrium price of a baseball is​

Accepted Answer

A) ​$16 
B) $12​ 
C) $10 
D) ​$8 
A) ​$16 
B) $12​ 
C) $10 
D) ​$8

Question 17

Since World War II, GATT has been responsible for reducing the average tariff among member countries from about

Accepted Answer

A) 40 percent to about 5 percent. 
B) 40 percent to about 20 percent. 
C) 80 percent to about 20 percent. 
D) 20 percent to about 10 percent. 
A) 40 percent to about 5 percent. 
B) 40 percent to about 20 percent. 
C) 80 percent to about 20 percent. 
D) 20 percent to about 10 percent.

Question 18

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-4. The domestic country is Nicaragua.  
-Refer to Figure 9-4. With trade, Nicaragua

Accepted Answer

A) imports 150 calculators. 
B) imports 250 calculators. 
C) exports 100 calculators. 
D) exports 250 calculators. 
A) imports 150 calculators. 
B) imports 250 calculators. 
C) exports 100 calculators. 
D) exports 250 calculators.

Question 20

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

Accepted Answer

A) Brownland became an exporter of wheat. 
B) consumer surplus in Brownland increased by $3 million. 
C) the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left. 
D) this example is inconsistent with the economic theory of international trade. 
A) Brownland became an exporter of wheat. 
B) consumer surplus in Brownland increased by $3 million. 
C) the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left. 
D) this example is inconsistent with the economic theory of international trade.

Exam 9: Application: International Trade

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

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, how much are consumer surplus, producer surplus, and total surplus in this market?

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

Assume, for Mexico, that the domestic price of beets without international trade is higher than the world price of beets. This suggests that, in the production of beets,

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, this country will

Figure 9-17 -Refer to Figure 9-17. The amount of revenue collected by the government from the tariff is

Both tariffs and import quotas

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 Welsh producer surplus with trade?

Which of the following is the most accurate statement?

When, in our analysis of the gains and losses from international trade, we assume that a particular country is small, we are

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

A tariff on a product

If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening the U.S. baseball market to trade, the equilibrium price of a baseball is​

Since World War II, GATT has been responsible for reducing the average tariff among member countries from about

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. With trade, Nicaragua

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

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

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening the U.S. baseball market to trade, the equilibrium price of a baseball is