Question 1

Figure 9-9  
-Refer to Figure 9-9. Total surplus in this market before trade is

Accepted Answer

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

Question 2

Trade among nations is ultimately based on

Accepted Answer

A) absolute advantage. 
B) strategic advantage. 
C) comparative advantage. 
D) technical advantage. 
A) absolute advantage. 
B) strategic advantage. 
C) comparative advantage. 
D) technical advantage.

Question 3

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

Accepted Answer

With trade, consumer

Question 4

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S.  
-Refer to Figure 9-26.​ The figure shows that

Accepted Answer

A) ​there will be a surplus of baseballs if the U.S. opens the market for baseballs to international trade. 
B) ​there will be a shortage of baseballs after the U.S. market for baseballs opens up to international trade. 
C) ​the U.S. has a comparative advantage in the production of baseballs. 
D) ​other countries have an absolute advantage in the production of baseballs. 
A) ​there will be a surplus of baseballs if the U.S. opens the market for baseballs to international trade. 
B) ​there will be a shortage of baseballs after the U.S. market for baseballs opens up to international trade. 
C) ​the U.S. has a comparative advantage in the production of baseballs. 
D) ​other countries have an absolute advantage in the production of baseballs.

Question 5

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 $3, then the policy change results in a

Accepted Answer

A) $15.00 decrease in producer surplus. 
B) $45.00 increase in consumer surplus. 
C) $20.00 increase in total surplus. 
D) $12.50 increase in total surplus. 
A) $15.00 decrease in producer surplus. 
B) $45.00 increase in consumer surplus. 
C) $20.00 increase in total surplus. 
D) $12.50 increase in total surplus.

Question 6

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Accepted Answer

A) Wheatland has a comparative advantage, relative to other countries, in producing corn. 
B) other countries have a comparative advantage, relative to Wheatland, in producing fish. 
C) the price of fish in Wheatland exceeds the world price of fish. 
D) if Wheatland were to allow trade, it would import corn. 
A) Wheatland has a comparative advantage, relative to other countries, in producing corn. 
B) other countries have a comparative advantage, relative to Wheatland, in producing fish. 
C) the price of fish in Wheatland exceeds the world price of fish. 
D) if Wheatland were to allow trade, it would import corn.

Question 7

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

Accepted Answer

A) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country rises. 
B) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country falls. 
C) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country rises. 
D) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country falls. 
A) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country rises. 
B) domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country falls. 
C) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country rises. 
D) domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country falls.

Question 8

Suppose Iceland goes from being an isolated country to being an exporter of coats. As a result,

Accepted Answer

A) consumer surplus increases for consumers of coats in Iceland. 
B) producer surplus increases for producers of coats in Iceland. 
C) total surplus remains unchanged in the coat market in Iceland. 
D) it is reasonable to infer that other countries have a comparative advantage over Iceland in coat production. 
A) consumer surplus increases for consumers of coats in Iceland. 
B) producer surplus increases for producers of coats in Iceland. 
C) total surplus remains unchanged in the coat market in Iceland. 
D) it is reasonable to infer that other countries have a comparative advantage over Iceland in coat production.

Question 9

Figure 9-13  
-Refer to Figure 9-13. Consumer surplus after trade is

Accepted Answer

A) $3,600. 
B) $5,400. 
C) $7,200. 
D) $8,100. 
A) $3,600. 
B) $5,400. 
C) $7,200. 
D) $8,100.

Question 10

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

Accepted Answer

A) Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off. 
B) Turkish consumers of wheat become worse off and Turkish producers of wheat become better off. 
C) Turkish consumers of wheat become better off and Turkish producers of wheat become worse off. 
D) Turkish consumers of wheat become better off and Turkish producers of wheat become better off. 
A) Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off. 
B) Turkish consumers of wheat become worse off and Turkish producers of wheat become better off. 
C) Turkish consumers of wheat become better off and Turkish producers of wheat become worse off. 
D) Turkish consumers of wheat become better off and Turkish producers of wheat become better off.

Question 11

The before-trade price of fish in Germany is $8.00 per pound. The world price of fish is $6.00 per pound. Germany is a price-taker in the fish market. If Germany allows trade in fish, then Germany will become an

Accepted Answer

A) importer of fish and the price of fish in Germany will be $6.00. 
B) importer of fish and the price of fish in Germany will be $8.00. 
C) exporter of fish and the price of fish in Germany will be $6.00. 
D) exporter of fish and the price of fish in Germany will be $8.00. 
A) importer of fish and the price of fish in Germany will be $6.00. 
B) importer of fish and the price of fish in Germany will be $8.00. 
C) exporter of fish and the price of fish in Germany will be $6.00. 
D) exporter of fish and the price of fish in Germany will be $8.00.

Question 12

Figure 9-9  
-Refer to Figure 9-9. Producer surplus in this market before 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 13

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 $45. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

Accepted Answer

A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. 
B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. 
C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. 
D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. 
A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off. 
B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off. 
C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off. 
D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.

Question 14

For any country, if the world price of copper is lower than the domestic price of copper without trade, that country should

Accepted Answer

A) export copper. 
B) import copper. 
C) neither export nor import copper, since that country cannot gain from trade. 
D) neither export nor import copper, since that country already produces copper at a low cost compared to other countries. 
A) export copper. 
B) import copper. 
C) neither export nor import copper, since that country cannot gain from trade. 
D) neither export nor import copper, since that country already produces copper at a low cost compared to other countries.

Question 15

Figure 9-26
The following diagram shows the domestic demand and domestic supply curves in a market.  
-Refer to Figure 9-26. Suppose the world price in this market is $7. 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 f

Question 16

Refer to Figure 9-15. Producer surplus with trade and without a tariff is

Accepted Answer

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

Question 17

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S.  
-Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will​

Accepted Answer

A) ​import 600 baseballs. 
B) ​export 300 baseballs. 
C) ​import 400 baseballs. 
D) ​export 600 baseballs. 
A) ​import 600 baseballs. 
B) ​export 300 baseballs. 
C) ​import 400 baseballs. 
D) ​export 600 baseballs.

Question 18

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

Accepted Answer

A) confirmation of the virtues of free trade. 
B) confirmation of the infant-industry argument. 
C) confirmation that free trade agreements are not necessary. 
D) confirmation that specialization in absolute advantage works. 
A) confirmation of the virtues of free trade. 
B) confirmation of the infant-industry argument. 
C) confirmation that free trade agreements are not necessary. 
D) confirmation that specialization in absolute advantage works.

Question 19

Use the graph to answer the following questions about CDs.   
a.What is the equilibrium price of CDs before trade?
b.What is the equilibrium quantity of CDs before trade?
c.What is the price of CDs after trade is allowed?
d.What is the quantity of CDs exported after trade is allowed?
e.What is the amount of consumer surplus before trade?
f. What is the amount of consumer surplus after trade?
g. What is the amount of producer surplus before trade?
h. What is the amount of producer surplus after trade?
i. What is the amount of total surplus before trade?
j. What is the amount of total surplus after trade?
k. What is the change in total surplus because of trade?

Accepted Answer

a.$12
b.50
c.$15
d.3

Question 20

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Figure 9-9 -Refer to Figure 9-9. Total surplus in this market before trade is

Trade among nations is ultimately based on

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26.​ The figure shows that

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

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

Suppose Iceland goes from being an isolated country to being an exporter of coats. As a result,

Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

The before-trade price of fish in Germany is $8.00 per pound. The world price of fish is $6.00 per pound. Germany is a price-taker in the fish market. If Germany allows trade in fish, then Germany will become an

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

For any country, if the world price of copper is lower than the domestic price of copper without trade, that country should

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Refer to Figure 9-15. Producer surplus with trade and without a tariff is

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will​

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

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. The figure shows that

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will