Exam 9: Application: International Trade

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 $60. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?

Figure 9-17 -Refer to Figure 9-17. With free trade, total surplus is

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat, the nation began importing wheat. As a result, total surplus in the wheat market increased by $10 million. Which of the following changes could have occurred as well?

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 $60. Then, relative to the no-trade situation, international trade in cardboard

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 much is tariff revenue?

​When a country opens up to trade in a good for which it has a comparative advantage, and the country begins to export the good, we can conclude that

Within a country, the domestic price of a product will equal the world price if

If the Korean steel industry subsidizes the steel that it sells to the United States, the

Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that

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

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. With free trade, total surplus is

When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?

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

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,

Japan imposes a $300 per ton tariff on imported steel, raising the price charged in Japan to $1,000. Using only this information, which of the following statements is correct?

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

Suppose France subsidizes French wheat farmers, while Germany offers no subsidy to German wheat farmers. As a result of the French subsidy, sales of French wheat to Germany