Exam 9: Application: International Trade

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

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

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, what will be the domestic price in this market?

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing rice, exporting steel, and neither importing nor exporting TVs. We can conclude that producer surplus in Aquilonia is now

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. If the country allows free trade, how many units will domestic consumers demand and how many units will domestic producers supply?

Patterns of trade among nations are primarily determined by

Figure 9-12 -Refer to Figure 9-12. Consumer surplus before trade is

Import quotas and tariffs produce some common results. Which of the following is not one of those common results?

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The area bounded by the points Q0, P0), Q2, P1), and Q1, P1) represents

Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade, thus reducing the gains from trade.

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. With trade, Vietnamese rice producers will produce

Which of the following assertions is not correct about the multilateral approach to free trade?

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. The country for which the figure is drawn

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Without trade, the equilibrium price of roses is

Suppose Ecuador imposes a tariff on imported bananas. If the increase in producer surplus is $50 million, the reduction in consumer surplus is $150 million, and the deadweight loss of the tariff is $30 million, then the tariff generates $130 million in revenue for the government.

Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Import quotas and tariffs both cause the quantity of imports to fall.