Question 1

Figure 9-20
The figure illustrates the market for rice in Vietnam.  
-Refer to Figure 9-20. From the figure it is apparent that

Accepted Answer

A)  Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
B)  foreign countries have a comparative advantage in producing rice, relative to Vietnam. 
C)  Vietnam has an absolute advantage in producing rice, relative to the rest of the world. 
D)  foreign countries have an absolute advantage in producing rice, relative to Vietnam. 
A)  Vietnam has a comparative advantage in producing rice, relative to the rest of the world. 
B)  foreign countries have a comparative advantage in producing rice, relative to Vietnam. 
C)  Vietnam has an absolute advantage in producing rice, relative to the rest of the world. 
D)  foreign countries have an absolute advantage in producing rice, relative to Vietnam.

Question 2

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations:  
-Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Accepted Answer

The equilibrium pric

Question 3

Figure 9-7. The figure applies to the nation of Wales and the good is cheese.  
-Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

Accepted Answer

A)  Gains from trade = 1/2)P1 - P0)Q2 - Q1). 
B)  Gains from trade = 1/2)P1 - P0)Q2 - Q0) 
C)  Gains from trade = 1/2)P1 - P0)Q1 + Q2). 
D)  Gains from trade = 1/2)Q1)P3 - P1). 
A)  Gains from trade = 1/2)P1 - P0)Q2 - Q1). 
B)  Gains from trade = 1/2)P1 - P0)Q2 - Q0) 
C)  Gains from trade = 1/2)P1 - P0)Q1 + Q2). 
D)  Gains from trade = 1/2)Q1)P3 - P1).

Question 4

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

Accepted Answer

A) True 
 B)False

Question 5

Figure 9-11  
-Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

Accepted Answer

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

Question 6

An import quota

Accepted Answer

A)  is preferable to a tariff since an import quota does not create a deadweight loss. 
B)  is a tax on imported goods. 
C)  reduces the welfare of domestic consumers. 
D)  reduces the welfare of domestic producers. 
A)  is preferable to a tariff since an import quota does not create a deadweight loss. 
B)  is a tax on imported goods. 
C)  reduces the welfare of domestic consumers. 
D)  reduces the welfare of domestic producers.

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. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much is tariff revenue?

Accepted Answer

With trade

Question 8

Figure 9-13  
-Refer to Figure 9-13. With trade, the country

Accepted Answer

A)  exports 200 units of the good. 
B)  exports 400 units of the good. 
C)  imports 400 units of the good. 
D)  imports 600 units of the good. 
A)  exports 200 units of the good. 
B)  exports 400 units of the good. 
C)  imports 400 units of the good. 
D)  imports 600 units of the good.

Question 9

Figure 9-28
The following diagram shows the domestic demand and domestic supply curves in a market.  
-Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

The countr

Question 10

Figure 9-21
The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit.  
-Refer to Figure 9-21. Producer surplus with free trade is

Accepted Answer

A)  $14,000. 
B)  $18,000. 
C)  $24,000. 
D)  $32,000. 
A)  $14,000. 
B)  $18,000. 
C)  $24,000. 
D)  $32,000.

Question 11

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

Accepted Answer

A)  Farmland has a comparative advantage, relative to other countries, in producing beef. 
B)  other countries have an absolute advantage, relative to Farmland, in producing beef. 
C)  the price of beef in Farmland exceeds the world price of beef. 
D)  if Farmland were to allow trade, it would export pepper. 
A)  Farmland has a comparative advantage, relative to other countries, in producing beef. 
B)  other countries have an absolute advantage, relative to Farmland, in producing beef. 
C)  the price of beef in Farmland exceeds the world price of beef. 
D)  if Farmland were to allow trade, it would export pepper.

Question 12

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?

Accepted Answer

A)  The price of wheat in that nation increased with the adoption of the new policy. 
B)  The domestic quantity of wheat supplied increased with the adoption of the new policy. 
C)  Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million. 
D)  Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million. 
A)  The price of wheat in that nation increased with the adoption of the new policy. 
B)  The domestic quantity of wheat supplied increased with the adoption of the new policy. 
C)  Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million. 
D)  Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million.

Question 13

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

Accepted Answer

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

Question 14

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

Accepted Answer

A)  cause these factories to pay the U.S. minimum wage. 
B)  increase the rate of technological advance in poor countries so that they can afford to pay higher wages. 
C)  increase poverty in poor countries and benefit U.S. firms which compete with these imports. 
D)  harm U.S. firms which compete with these imports. 
A)  cause these factories to pay the U.S. minimum wage. 
B)  increase the rate of technological advance in poor countries so that they can afford to pay higher wages. 
C)  increase poverty in poor countries and benefit U.S. firms which compete with these imports. 
D)  harm U.S. firms which compete with these imports.

Question 15

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

Accepted Answer

A)  the jobs argument. 
B)  the protection-as-a-bargaining-chip argument. 
C)  the no-deadweight-loss argument. 
D)  the infant-industry argument. 
A)  the jobs argument. 
B)  the protection-as-a-bargaining-chip argument. 
C)  the no-deadweight-loss argument. 
D)  the infant-industry argument.

Question 16

A tax on an imported good is called a

Accepted Answer

A)  quota. 
B)  tariff. 
C)  supply tax. 
D)  trade tax. 
A)  quota. 
B)  tariff. 
C)  supply tax. 
D)  trade tax.

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. From the figure it is apparent that

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

An import quota

Figure 9-13 -Refer to Figure 9-13. With trade, the country

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

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

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

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

A tax on an imported good is called a

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

Filters

Exam 9: Application: International Trade

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. From the figure it is apparent that

Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

An import quota

Figure 9-13 -Refer to Figure 9-13. With trade, the country

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

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

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

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

A tax on an imported good is called a

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

Filters