Question 1

When a country that imports a particular good imposes a tariff 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 2

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

Accepted Answer

A)  England has a comparative advantage over other countries and England will export wine. 
B)  England has a comparative advantage over other countries and England will import wine. 
C)  other countries have a comparative advantage over England and England will export wine. 
D)  other countries have a comparative advantage over England and England will import wine. 
A)  England has a comparative advantage over other countries and England will export wine. 
B)  England has a comparative advantage over other countries and England will import wine. 
C)  other countries have a comparative advantage over England and England will export wine. 
D)  other countries have a comparative advantage over England and England will import wine.

Question 3

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2. With free trade, consumer surplus is

Accepted Answer

A)  $320. 
B)  $640. 
C)  $845. 
D)  $1,690. 
A)  $320. 
B)  $640. 
C)  $845. 
D)  $1,690.

Question 4

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. If Isoland allows international trade and if the world price of peaches is $3, then

Accepted Answer

A)  Isoland has a comparative advantage, relative to other countries, in producing peaches. 
B)  Isoland will export peaches. 
C)  producer surplus with trade exceeds producer surplus without trade. 
D)  consumer surplus with trade exceeds consumer surplus without trade. 
A)  Isoland has a comparative advantage, relative to other countries, in producing peaches. 
B)  Isoland will export peaches. 
C)  producer surplus with trade exceeds producer surplus without trade. 
D)  consumer surplus with trade exceeds consumer surplus without trade.

Question 5

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

Question 6

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 7

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit.  
-Refer to Figure 9-24. With free trade, consumer surplus is

Accepted Answer

A)  $400 and producer surplus is $100. 
B)  $400 and producer surplus is $400. 
C)  $900 and producer surplus is $100. 
D)  $900 and producer surplus is $400. 
A)  $400 and producer surplus is $100. 
B)  $400 and producer surplus is $400. 
C)  $900 and producer surplus is $100. 
D)  $900 and producer surplus is $400.

Question 8

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 Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)  $88.75. 
B)  $102.50. 
C)  $122.50. 
D)  $135.00. 
A)  $88.75. 
B)  $102.50. 
C)  $122.50. 
D)  $135.00.

Question 9

Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?

Accepted Answer

A)  The price of paper in Republica decreased as a result of the policy change. 
B)  Republica began exporting paper as a result of the policy change. 
C)  The domestic demand curve for paper shifted to the right as a result of the policy change. 
D)  The domestic quantity of paper demanded increased as a result of the policy change. 
A)  The price of paper in Republica decreased as a result of the policy change. 
B)  Republica began exporting paper as a result of the policy change. 
C)  The domestic demand curve for paper shifted to the right as a result of the policy change. 
D)  The domestic quantity of paper demanded increased as a result of the policy change.

Question 10

Spain is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Spain imposes a $5 tariff on chips. As a result,

Accepted Answer

A)  Spanish consumers of chips and Spanish producers of chips both gain. 
B)  Spanish consumers of chips gain and Spanish producers of chips lose. 
C)  Spanish consumers of chips lose and Spanish producers of chips gain. 
D)  Spanish consumers of chips and Spanish producers of chips both lose. 
A)  Spanish consumers of chips and Spanish producers of chips both gain. 
B)  Spanish consumers of chips gain and Spanish producers of chips lose. 
C)  Spanish consumers of chips lose and Spanish producers of chips gain. 
D)  Spanish consumers of chips and Spanish producers of chips both lose.

Question 11

Figure 9-3. The domestic country is China.  
-Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is

Accepted Answer

A)  $400. 
B)  $500. 
C)  $600. 
D)  $750. 
A)  $400. 
B)  $500. 
C)  $600. 
D)  $750.

Question 12

Figure 9-1
The figure illustrates the market for coffee in Guatemala.  
-Refer to Figure 9-1. From the figure it is apparent that

Accepted Answer

A)  Guatemala will experience a shortage of coffee if trade is not allowed. 
B)  Guatemala will experience a surplus of coffee if trade is not allowed. 
C)  Guatemala has a comparative advantage in producing coffee, relative to the rest of the world. 
D)  foreign countries have a comparative advantage in producing coffee, relative to Guatemala. 
A)  Guatemala will experience a shortage of coffee if trade is not allowed. 
B)  Guatemala will experience a surplus of coffee if trade is not allowed. 
C)  Guatemala has a comparative advantage in producing coffee, relative to the rest of the world. 
D)  foreign countries have a comparative advantage in producing coffee, relative to Guatemala.

Question 13

Figure 9-2
The figure illustrates the market for calculators in a country.  
-Refer to Figure 9-2. The world price for calculators represents

Accepted Answer

A)  the demand for calculators from the rest of the world. 
B)  the supply of calculators from the rest of the world. 
C)  the level of inefficiency in the domestic market caused by trade. 
D)  the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage. 
A)  the demand for calculators from the rest of the world. 
B)  the supply of calculators from the rest of the world. 
C)  the level of inefficiency in the domestic market caused by trade. 
D)  the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage.

Question 14

About what percent of total world trade is accounted for by countries that belong to the World Trade Organization?

Accepted Answer

A)  54 percent 
B)  72 percent 
C)  89 percent 
D)  97 percent 
A)  54 percent 
B)  72 percent 
C)  89 percent 
D)  97 percent

Question 15

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 16

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. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Accepted Answer

A)  $25. 
B)  $50. 
C)  $75. 
D)  $100. 
A)  $25. 
B)  $50. 
C)  $75. 
D)  $100.

Question 17

For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

Accepted Answer

A) True 
 B)False

Question 18

Figure 9-17  
-Refer to Figure 9-17. The amount of revenue collected by the government from the tariff is

Accepted Answer

A)  $32. 
B)  $288. 
C)  $368. 
D)  $720. 
A)  $32. 
B)  $288. 
C)  $368. 
D)  $720.

Question 19

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

Accepted Answer

A) True 
 B)False

Question 20

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

Accepted Answer

A)  Mexico has a comparative advantage over other countries and Mexico will export oranges. 
B)  Mexico has a comparative advantage over other countries and Mexico will import oranges. 
C)  other countries have a comparative advantage over Mexico and Mexico will export oranges. 
D)  other countries have a comparative advantage over Mexico and Mexico will import oranges. 
A)  Mexico has a comparative advantage over other countries and Mexico will export oranges. 
B)  Mexico has a comparative advantage over other countries and Mexico will import oranges. 
C)  other countries have a comparative advantage over Mexico and Mexico will export oranges. 
D)  other countries have a comparative advantage over Mexico and Mexico will import oranges.

Exam 9: Application: International Trade

When a country that imports a particular good imposes a tariff on that good,

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

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is

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. If Isoland allows international trade and if the world price of peaches is $3, then

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.

A quota is

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. With free trade, consumer surplus is

Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?

Spain is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Spain imposes a $5 tariff on chips. As a result,

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. The world price for calculators represents

About what percent of total world trade is accounted for by countries that belong to the World Trade Organization?

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

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. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

Figure 9-17 -Refer to Figure 9-17. The amount of revenue collected by the government from the tariff is

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

Assume, for Mexico, that the domestic price of oranges without international trade is lower than the world price of oranges. This suggests that, in the production of oranges,

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

Application: The Costs of Taxation

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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