Question 1

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  Spain imports olive oil. 
B)  the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed. 
C)  consumer surplus in Spain would exceed producer surplus in Spain if trade with other countries were not allowed. 
D)  All of the above are correct. 
A)  Spain imports olive oil. 
B)  the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed. 
C)  consumer surplus in Spain would exceed producer surplus in Spain if trade with other countries were not allowed. 
D)  All of the above are correct.

Question 3

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 4

Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we

Accepted Answer

A)  know whether Costa Rica imports or exports pharmaceuticals. 
B)  compare the world price of pharmaceuticals to the price of pharmaceuticals that would prevail in Costa Rica if trade with the rest of the world were not allowed. 
C)  compare the quantity of pharmaceuticals consumed in Costa Rica with the quantity of pharmaceuticals that would be consumed in Costa Rica if trade with the rest of the world were not allowed. 
D)  All of the above are correct. 
A)  know whether Costa Rica imports or exports pharmaceuticals. 
B)  compare the world price of pharmaceuticals to the price of pharmaceuticals that would prevail in Costa Rica if trade with the rest of the world were not allowed. 
C)  compare the quantity of pharmaceuticals consumed in Costa Rica with the quantity of pharmaceuticals that would be consumed in Costa Rica if trade with the rest of the world were not allowed. 
D)  All of the above are correct.

Question 5

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,

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 6

Figure 9-17  
-Refer to Figure 9-17. The deadweight loss caused by the tariff is

Accepted Answer

A)  $24. 
B)  $72. 
C)  $96. 
D)  $144. 
A)  $24. 
B)  $72. 
C)  $96. 
D)  $144.

Question 7

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Accepted Answer

Without trade, consu

Question 8

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

Accepted Answer

A)  this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing corn. 
C)  the nation's consumers of corn become better off and the nation's producers of corn become worse off. 
D)  All of the above are correct. 
A)  this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing corn. 
C)  the nation's consumers of corn become better off and the nation's producers of corn become worse off. 
D)  All of the above are correct.

Question 9

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

Accepted Answer

A)  this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing soybeans. 
C)  the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off. 
D)  All of the above are correct. 
A)  this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. 
B)  this is an indication that the nation has a comparative advantage in producing soybeans. 
C)  the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off. 
D)  All of the above are correct.

Question 10

Figure 9-1
The figure illustrates the market for coffee in Guatemala.  
-Refer to Figure 9-1. With trade, total surplus in the Guatemalan coffee market amounts to

Accepted Answer

A)  1,250. 
B)  1,468. 
C)  1,870. 
D)  1,980. 
A)  1,250. 
B)  1,468. 
C)  1,870. 
D)  1,980.

Question 11

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, relative to the no-trade situation, international trade in cardboard

Accepted Answer

A)  benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. 
B)  benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. 
C)  benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. 
D)  harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. 
A)  benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. 
B)  benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. 
C)  benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. 
D)  harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00.

Question 12

Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?

Accepted Answer

A unilateral approach is when a country

Question 13

A country has a comparative advantage in a product if the world price is _______ than that country's domestic price without trade.

Accepted Answer

The answer of A country has a comparative advantage in...

Question 14

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Accepted Answer

A)  Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar. 
B)  Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions. 
C)  Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar. 
D)  Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions. 
A)  Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar. 
B)  Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions. 
C)  Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar. 
D)  Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions.

Question 15

Which of the following tools and concepts is useful in the analysis of international trade?

Accepted Answer

A)  total surplus 
B)  domestic supply 
C)  equilibrium price 
D)  All of the above are correct. 
A)  total surplus 
B)  domestic supply 
C)  equilibrium price 
D)  All of the above are correct.

Question 16

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Accepted Answer

Jumanji wi

Question 17

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Accepted Answer

Brazil wil

Question 18

Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Accepted Answer

A)  will import almonds. 
B)  will export almonds. 
C)  will either import almonds or export almonds, but it is not clear from the given information. 
D)  would have nothing to gain either from exporting or importing almonds. 
A)  will import almonds. 
B)  will export almonds. 
C)  will either import almonds or export almonds, but it is not clear from the given information. 
D)  would have nothing to gain either from exporting or importing almonds.

Question 19

Trade raises the economic well-being of a nation in the sense that

Accepted Answer

A)  the gains of the winners exceed the losses of the losers. 
B)  everyone in an economy gains from trade. 
C)  since countries can choose what products to trade, they will pick those products that are most beneficial to society. 
D)  the nation joins the international community when it begins to engage in trade. 
A)  the gains of the winners exceed the losses of the losers. 
B)  everyone in an economy gains from trade. 
C)  since countries can choose what products to trade, they will pick those products that are most beneficial to society. 
D)  the nation joins the international community when it begins to engage in trade.

Question 20

Figure 9-23
The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit.  
-Refer to Figure 9-23. With free trade allowed, this country

Accepted Answer

A)  exports 5 units of the good. 
B)  imports 5 units of the good. 
C)  exports 13 units of the good. 
D)  imports 13 units of the good. 
A)  exports 5 units of the good. 
B)  imports 5 units of the good. 
C)  exports 13 units of the good. 
D)  imports 13 units of the good.

Exam 9: Application: International Trade

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off.

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

Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we

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,

Figure 9-17 -Refer to Figure 9-17. The deadweight loss caused by the tariff is

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

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

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

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. With trade, total surplus in the Guatemalan coffee market amounts to

Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?

A country has a comparative advantage in a product if the world price is _______ than that country's domestic price without trade.

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Which of the following tools and concepts is useful in the analysis of international trade?

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Trade raises the economic well-being of a nation in the sense that

Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade allowed, this country

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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