Question 1

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

Accepted Answer

A) other countries have a comparative advantage over Colombia in producing coffee. 
B) Colombia has an absolute advantage over other countries in producing coffee. 
C) Colombia will export coffee if international trade is allowed. 
D) Colombian coffee buyers will become worse off if international trade is allowed. 
A) other countries have a comparative advantage over Colombia in producing coffee. 
B) Colombia has an absolute advantage over other countries in producing coffee. 
C) Colombia will export coffee if international trade is allowed. 
D) Colombian coffee buyers will become worse off if international trade is allowed.

Question 2

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then

Accepted Answer

A) total surplus in the American television market decreases. 
B) producer surplus in the American television market increases. 
C) U.S. imports of foreign televisions decrease. 
D) All of the above are correct. 
A) total surplus in the American television market decreases. 
B) producer surplus in the American television market increases. 
C) U.S. imports of foreign televisions decrease. 
D) All of the above are correct.

Question 3

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

Accepted Answer

A) True 
 B)False

Question 4

When a country that imports a particular good imposes an import quota on that good,

Accepted Answer

A) consumer surplus increases and total surplus increases in the market for that good. 
B) consumer surplus increases and total surplus decreases in the market for that good. 
C) consumer surplus decreases and total surplus increases in the market for that good. 
D) consumer surplus decreases and total surplus decreases in the market for that good. 
A) consumer surplus increases and total surplus increases in the market for that good. 
B) consumer surplus increases and total surplus decreases in the market for that good. 
C) consumer surplus decreases and total surplus increases in the market for that good. 
D) consumer surplus decreases and total surplus decreases in the market for that good.

Question 5

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit.  
-Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. With trade and a tariff, total surplus is

Accepted Answer

A) $96,000. 
B) $114,000. 
C) $120,000. 
D) $126,000. 
A) $96,000. 
B) $114,000. 
C) $120,000. 
D) $126,000.

Question 6

Figure 9-4. The domestic country is Nicaragua.  
-Refer to Figure 9-4. Which of the following statements is accurate?

Accepted Answer

A) Consumer surplus with trade is $3,200. 
B) Producer surplus with trade is $375. 
C) The gains from trade amount to $800. 
D) The gains from trade are represented on the graph by the area bounded by the points (0, $12), (300, $12), (300, $7) and (0, $7). 
A) Consumer surplus with trade is $3,200. 
B) Producer surplus with trade is $375. 
C) The gains from trade amount to $800. 
D) The gains from trade are represented on the graph by the area bounded by the points (0, $12), (300, $12), (300, $7) and (0, $7).

Question 7

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

Accepted Answer

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

Question 8

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit.  
-Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. The deadweight loss caused by the tariff is

Accepted Answer

A) $6,000. 
B) $9,000. 
C) $12,000. 
D) $15,000. 
A) $6,000. 
B) $9,000. 
C) $12,000. 
D) $15,000.

Question 9

When a country that imports a particular good imposes an import quota on that good,

Accepted Answer

A) producer surplus increases and total surplus increases in the market for that good. 
B) producer surplus increases and total surplus decreases in the market for that good. 
C) producer surplus decreases and total surplus increases in the market for that good. 
D) producer surplus decreases and total surplus decreases in the market for that good. 
A) producer surplus increases and total surplus increases in the market for that good. 
B) producer surplus increases and total surplus decreases in the market for that good. 
C) producer surplus decreases and total surplus increases in the market for that good. 
D) producer surplus decreases and total surplus decreases in the market for that good.

Question 10

Figure 9-3. The domestic country is China.  
-Refer to Figure 9-3. With trade, producer surplus in China is

Accepted Answer

A) $800. 
B) $1,200. 
C) $1,800. 
D) $2,700. 
A) $800. 
B) $1,200. 
C) $1,800. 
D) $2,700.

Question 11

Figure 9-10. The figure applies to Mexico and the good is rifles.  
-Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Accepted Answer

A) the number of rifles bought and sold in Mexico. 
B) the number of rifles produced in Mexico. 
C) the number of rifles exported by Mexico. 
D) the number of rifles imported by Mexico. 
A) the number of rifles bought and sold in Mexico. 
B) the number of rifles produced in Mexico. 
C) the number of rifles exported by Mexico. 
D) the number of rifles imported by Mexico.

Question 12

If the world price of apples is higher than Argentina's domestic price of apples without trade, then Argentina

Accepted Answer

A) should import apples. 
B) has a comparative advantage in apples. 
C) should produce just enough apples to meet its domestic demand. 
D) should refrain altogether from producing apples. 
A) should import apples. 
B) has a comparative advantage in apples. 
C) should produce just enough apples to meet its domestic demand. 
D) should refrain altogether from producing apples.

Question 13

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Accepted Answer

A) Moldova can only import goods; it cannot export goods. 
B) Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C) only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D) Moldova is a price taker. 
A) Moldova can only import goods; it cannot export goods. 
B) Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. 
C) only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. 
D) Moldova is a price taker.

Question 14

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Accepted Answer

A) True 
 B)False

Question 15

Figure 9-27
The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit.  
-Refer to Figure 9-27. If the country allows free trade, how many units will domestic consumers demand and how many units will domestic producers produce?

Accepted Answer

With trade, domestic

Question 16

Figure 9-17  
-Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to

Accepted Answer

A) $400. 
B) $600. 
C) $750. 
D) $1,000. 
A) $400. 
B) $600. 
C) $750. 
D) $1,000.

Question 17

What is the fundamental basis for trade among nations?

Accepted Answer

A) shortages or surpluses in nations that do not trade 
B) misguided economic policies 
C) absolute advantage 
D) comparative advantage 
A) shortages or surpluses in nations that do not trade 
B) misguided economic policies 
C) absolute advantage 
D) comparative advantage

Question 18

If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland.  
-Refer to Figure 9-18. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $5, then the policy change results in

Accepted Answer

A) a decrease in consumer surplus. 
B) an increase in producer surplus. 
C) an increase in total surplus. 
D) All of the above are correct. 
A) a decrease in consumer surplus. 
B) an increase in producer surplus. 
C) an increase in total surplus. 
D) All of the above are correct.

Question 20

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit.  
-Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. With trade and a tariff, consumer surplus is

Accepted Answer

A) $75,000 and producer surplus is $27,000. 
B) $63,000 and producer surplus is $12,000. 
C) $75,000 and producer surplus is $12,000. 
D) $63,000 and producer surplus is $27,000. 
A) $75,000 and producer surplus is $27,000. 
B) $63,000 and producer surplus is $12,000. 
C) $75,000 and producer surplus is $12,000. 
D) $63,000 and producer surplus is $27,000.

Exam 9: Application: International Trade

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

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

When a country that imports a particular good imposes an import quota on that good,

Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. With trade and a tariff, total surplus is

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Which of the following statements is accurate?

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

Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. The deadweight loss caused by the tariff is

When a country that imports a particular good imposes an import quota on that good,

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, producer surplus in China is

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

If the world price of apples is higher than Argentina's domestic price of apples without trade, then Argentina

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Figure 9-17 -Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to

What is the fundamental basis for trade among nations?

If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.

Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. With trade and a tariff, consumer 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

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q₂ - Q₁ is