Question 1

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

Accepted Answer

A) China and North Korea 
B) Chile and South Korea 
C) Russia and Japan 
D) the United States and Mexico 
A) China and North Korea 
B) Chile and South Korea 
C) Russia and Japan 
D) the United States and Mexico

Question 2

When markets open up to international trade, we know that consumer surplus will rise.
​

Accepted Answer

A) True 
 B)False

Question 3

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. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer

Question 4

Countries that restrict foreign trade are likely to

Accepted Answer

A) forgo the additional surplus that trade allows, but will probably enjoy economies of scale. 
B) forgo the additional surplus that trade allows, but will be compensated by a higher rate of technological change. 
C) forgo the additional surplus that trade allows, but will have a lower rate of unemployment. 
D) have more firms with domestic market power. 
A) forgo the additional surplus that trade allows, but will probably enjoy economies of scale. 
B) forgo the additional surplus that trade allows, but will be compensated by a higher rate of technological change. 
C) forgo the additional surplus that trade allows, but will have a lower rate of unemployment. 
D) have more firms with domestic market power.

Question 5

Refer to Figure 9-16. The tariff

Accepted Answer

A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B) increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F. 
A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. 
B) increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F. 
C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. 
D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

Question 6

The world price of cotton is the highest price of cotton observed anywhere in the world.

Accepted Answer

A) True 
 B)False

Question 7

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, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Accepted Answer

With trade, consumer surplus i

Question 8

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

Accepted Answer

With trade, consumer

Question 9

Figure 9-12  
-Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

Accepted Answer

A) $54 and 800. 
B) $54 and 1,600. 
C) $42 and 800. 
D) $42 and 1,200. 
A) $54 and 800. 
B) $54 and 1,600. 
C) $42 and 800. 
D) $42 and 1,200.

Question 10

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

Accepted Answer

A) imports Q2 - Q1 units of cheese. 
B) exports Q2 - Q1 units of cheese. 
C) imports Q2 - Q0 units of cheese. 
D) exports Q2 - Q0 units of cheese. 
A) imports Q2 - Q1 units of cheese. 
B) exports Q2 - Q1 units of cheese. 
C) imports Q2 - Q0 units of cheese. 
D) exports Q2 - Q0 units of cheese.

Question 11

Congresswoman Gaga represents a state in which several firms manufacture furniture. She wants to impose tariffs on all imported furniture. Which of the following is the least likely consequence of such tariffs?

Accepted Answer

A) Domestic furniture buyers will lose consumer surplus, have less variety, and will pay higher prices. 
B) Domestic furniture producers will gain producer surplus. 
C) Domestic furniture producers will have a higher rate of technological advance. 
D) Domestic furniture producers will have more market power. 
A) Domestic furniture buyers will lose consumer surplus, have less variety, and will pay higher prices. 
B) Domestic furniture producers will gain producer surplus. 
C) Domestic furniture producers will have a higher rate of technological advance. 
D) Domestic furniture producers will have more market power.

Question 12

Chile is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Chile imposes a $7 tariff on chips. Which of the following outcomes is possible?

Accepted Answer

A) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips decreases; and the quantity of chips imported by Chile decreases. 
B) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases. 
C) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases. 
D) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile does not change. 
A) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips decreases; and the quantity of chips imported by Chile decreases. 
B) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases. 
C) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases. 
D) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile does not change.

Question 13

The infant-industry argument

Accepted Answer

A) is based on the belief that protecting industries when they are young will pay off later. 
B) is based on the belief that protecting industries producing goods and services for infants is necessary if a country is to have healthy children. 
C) has the support of most economists. 
D) is an argument that is advanced by advocates of free trade. 
A) is based on the belief that protecting industries when they are young will pay off later. 
B) is based on the belief that protecting industries producing goods and services for infants is necessary if a country is to have healthy children. 
C) has the support of most economists. 
D) is an argument that is advanced by advocates of free trade.

Question 14

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

Accepted Answer

A) domestic producers of the good become better off. 
B) domestic consumers of the good become worse off. 
C) the gains of the winners exceed the losses of the losers. 
D) All of the above are correct. 
A) domestic producers of the good become better off. 
B) domestic consumers of the good become worse off. 
C) the gains of the winners exceed the losses of the losers. 
D) All of the above are correct.

Question 15

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, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus?

Accepted Answer

With trade and a tariff, consu

Question 16

Tariffs and quotas are different in the sense that

Accepted Answer

A) tariffs cause deadweight losses, while quotas do not cause deadweight losses. 
B) tariffs raise revenue for the government, while quotas do not raise revenue for the government. 
C) tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers. 
D) tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers. 
A) tariffs cause deadweight losses, while quotas do not cause deadweight losses. 
B) tariffs raise revenue for the government, while quotas do not raise revenue for the government. 
C) tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers. 
D) tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers.

Question 17

A quota is

Accepted Answer

A) a tax placed on imports. 
B) a limit on the quantity of imports. 
C) a tax on exports to other countries. 
D) an excess of exports over imports. 
A) a tax placed on imports. 
B) a limit on the quantity of imports. 
C) a tax on exports to other countries. 
D) an excess of exports over imports.

Question 18

Figure 9-13  
-Refer to Figure 9-13. With trade, the country

Accepted Answer

A) exports 200 units of the good. 
B) exports 400 units of the good. 
C) imports 400 units of the good. 
D) imports 600 units of the good. 
A) exports 200 units of the good. 
B) exports 400 units of the good. 
C) imports 400 units of the good. 
D) imports 600 units of the good.

Question 19

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

Accepted Answer

A) $28,000. 
B) $30,000. 
C) $35,200. 
D) $38,400. 
A) $28,000. 
B) $30,000. 
C) $35,200. 
D) $38,400.

Question 20

NAFTA is an example of a multilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

In recent years, which countries have taken a unilateral approach to the removal of trade restrictions?

When markets open up to international trade, we know that consumer surplus will rise. ​

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. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Countries that restrict foreign trade are likely to

Refer to Figure 9-16. The tariff

The world price of cotton is the highest price of cotton observed anywhere in the world.

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, by how much do consumer surplus, producer surplus, and total surplus change with trade?

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

Figure 9-12 -Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

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

Congresswoman Gaga represents a state in which several firms manufacture furniture. She wants to impose tariffs on all imported furniture. Which of the following is the least likely consequence of such tariffs?

Chile is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Chile imposes a $7 tariff on chips. Which of the following outcomes is possible?

The infant-industry argument

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

Tariffs and quotas are different in the sense that

A quota is

Figure 9-13 -Refer to Figure 9-13. With trade, the country

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

NAFTA is an example of a multilateral approach to achieving free trade.

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

When markets open up to international trade, we know that consumer surplus will rise.