Exam 9: Application: International Trade

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

A tariff is a tax placed on

Using the graph,assume that the government imposes a $1 tariff on hammers.Answer the following questions given this information. a.What is the domestic price and quantity demanded of hammers after the tariff is imposed? b.What is the quantity of hammers imported before the tariff? c.What is the quantity of hammers imported after the tariff? d.What would be the amount of consumer surplus before the tariff? e.What would be the amount of consumer surplus after the tariff? f.What would be the amount of producer surplus before the tariff? g.What would be the amount of producer surplus after the tariff? h.What would be the amount of government revenue because of the tariff? i.What would be the total amount of deadweight loss due to the tariff?

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach,because the multilateral approach can reduce trade restrictions abroad as well as at home.

Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.When trade takes place,the quantity Q₂ - Q₁ is

Figure 9-11 -Refer to Figure 9-11.Producer surplus before trade is

Figure 9-1 -Refer to Figure 9-1.With free trade,consumer surplus is

Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.The area bounded by the points (Q₀,P₀),(Q₂,P₁),and (Q₁,P₁)represents

Figure 9-5 -Refer to Figure 9-5.When a tariff is imposed in the market,domestic producers

When a nation first begins to trade with other countries and the nation becomes an exporter of corn,

Figure 9-1 -Refer to Figure 9-1.Without trade,consumer surplus is

Figure 9-3. The domestic country is Jamaica. -Refer to Figure 9-3.Consumer surplus in Jamaica without trade is

Figure 9-1 -Refer to Figure 9-1.At the world price and with free trade,

Denmark is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Denmark imposes a $5 tariff on chips.Which of the following outcomes is possible?

Figure 9-5 -Refer to Figure 9-5.With trade and without a tariff,

Figure 9-14 -Refer to Figure 9-14.Producer surplus with the tariff is

Tariffs and quotas are different in the sense that

Without free trade,the domestic price of a good must be equal to the world price of a good.

Several arguments for restricting trade have been advanced.Those arguments do not include

Figure 9-12 -Refer to Figure 9-12.With trade,domestic production and domestic consumption,respectively,are