Question 1

William and Jamal live in the country of Dumexia.As a result of Dumexia's legalization of international trade in bananas,William becomes better off and Jamal becomes worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Accepted Answer

A) True 
 B)False

Question 2

If Freedonia changes its laws to allow international trade in software and the world price is higher than its domestic price,then it must be the case that

Accepted Answer

A)   both consumer surplus and producer surplus increase.
B)   consumer surplus increases and producer surplus decreases.
C)   consumer surplus decreases and producer surplus increases.
D)   both consumer surplus and producer surplus decrease.E) All of the above
F) A) and C)

Question 3

Assume,for Canada,that the domestic price of tomatoes without international trade is higher than the world price of tomatoes.This suggests that,in the production of tomatoes,

Accepted Answer

A)   Canada has a comparative advantage over other countries and Canada will export tomatoes.
B)   Canada has a comparative advantage over other countries and Canada will import tomatoes.
C)   other countries have a comparative advantage over Canada and Canada will export tomatoes.
D)   other countries have a comparative advantage over Canada and Canada will import tomatoes.E) B) and C)
F) A) and B)

Question 4

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.When the country for which the figure is drawn allows international trade in cars,

Accepted Answer

A)   consumer surplus increases by the area B.
B)   producer surplus decreases by the area B + D.
C)   total surplus increases by the area D.
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 5

The nation of Woodland forbids international trade.In Woodland,you can exchange 1 pound of chicken for 5 pounds of salt.In other countries,you can exchange 1 pound of chicken for 7 pounds of salt.These facts indicate that

Accepted Answer

A)   Woodland has a comparative advantage, relative to other countries, in producing chicken.
B)   other countries have an absolute advantage, relative to Woodland, in producing chicken.
C)   the price of chicken in Woodland exceeds the world price of chicken.
D)   if Woodland were to allow trade, it would export salt.E) B) and C)
F) B) and D)

Question 6

A logical starting point from which the study of international trade begins is

Accepted Answer

A)   the recognition that not all markets are competitive.
B)   the recognition that government intervention in markets sometimes enhances the economic welfare of the society.
C)   the principle of absolute advantage.
D)   the principle of comparative advantage.E) A) and B)
F) All of the above

Question 7

Both tariffs and import quotas

Accepted Answer

A)   increase the quantity of imports and raise the domestic price of the good.
B)   increase the quantity of imports and lower the domestic price of the good.
C)   decrease the quantity of imports and raise the domestic price of the good.
D)   decrease the quantity of imports and lower the domestic price of the good.E) All of the above
F) None of the above

Question 8

Figure 9-1
The figure illustrates the market for wool in Scotland.
 
-Refer to Figure 9-1.In the absence of trade,the equilibrium price of wool in Scotland is

Accepted Answer

A)   $15.
B)   $45.
C)   $55.
D)   $70.E) B) and D)
F) A) and B)

Question 9

Use the graph to answer the following questions about CDs.
  
a.What is the equilibrium price of CDs before trade?
b.What is the equilibrium quantity of CDs before trade?
c.What is the price of CDs after trade is allowed?
d.What is the quantity of CDs exported after trade is allowed?
e.What is the amount of consumer surplus before trade?
f.What is the amount of consumer surplus after trade?
g.What is the amount of producer surplus before trade?
h.What is the amount of producer surplus after trade?
i.What is the amount of total surplus before trade?
j.What is the amount of total surplus after trade?
k.What is the change in total surplus because of trade?

Accepted Answer

a.$12
b.50
c.$15
d.3...

Question 10

Figure 9-17
 
-Refer to Figure 9-17.With free trade,total surplus is

Accepted Answer

A)   $600.
B)   $1,200.
C)   $1,800.
D)   $2,400.E) B) and C)
F) B) and D)

Question 11

Suppose France imposes a tariff on wine of 3 euros per bottle.If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers,with the tariff,is 8 million bottles per year,then we can conclude that

Accepted Answer

A)   the quantity of wine demanded by France, with the tariff, is 18 million bottles per year.
B)   the quantity of wine demanded by France, without the tariff, would be 24 million bottles per year.
C)   the amount of the deadweight loss is 24 million euros per year.
D)   the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff.E) A) and B)
F) None of the above

Question 12

The greater the elasticities of supply and demand,the smaller are the gains from trade.

Accepted Answer

A) True 
 B)False

Question 13

Figure 9-5
 
-Refer to Figure 9-5.With trade,consumer surplus is

Accepted Answer

A)   $245.
B)   $362.50.
C)   $367.50.
D)   $607.50.E) All of the above
F) B) and D)

Question 14

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy.If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound,then Aviana should export goose meat.

Accepted Answer

A) True 
 B)False

Question 15

The North American Free Trade Agreement

Accepted Answer

A)   is an example of the unilateral approach to free trade.
B)   eliminated tariffs on imports to North America from the rest of the world.
C)   reduced trade restrictions among Canada, Mexico and the United States.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

In a 2007 New York Times article Paul Krugman wrote that

Accepted Answer

A)   the infant-industry argument works well as an argument in favor of protection for the U.S. steel industry.
B)   the negative effects of third world exports on U.S. wages may be increasing.
C)   there are social gains to the U.S. from free trade.
D)   high wage countries account for a growing share of U.S. imports of manufactured goods.E) B) and D)
F) All of the above

Question 18

Figure 9-15
 
-Refer to Figure 9-15.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Accepted Answer

A)   Q2 - Q1.
B)   Q3 - Q2.
C)   Q4 - Q3.
D)   Q4 - Q3 + Q2 - Q1.E) B) and C)
F) All of the above

Question 19

Figure 9-3. The domestic country is China.
 
-Refer to Figure 9-3.With no international trade,

Accepted Answer

A)   the equilibrium price is $12 and the equilibrium quantity is 300.
B)   the equilibrium price is $16 and the equilibrium quantity is 200.
C)   the equilibrium price is $16 and the equilibrium quantity is 300.
D)   the equilibrium price is $16 and the equilibrium quantity is 450.E) None of the above
F) B) and C)

Question 20

Figure 9-12
 
-Refer to Figure 9-12.Equilibrium price and equilibrium quantity without trade are

Accepted Answer

A)   $27 and 400.
B)   $27 and 800.
C)   $21 and 400.
D)   $21 and 600.E) None of the above
F) B) and C)

Exam 9: Application: International Trade.

The nation of Woodland forbids international trade.In Woodland,you can exchange 1 pound of chicken for 5 pounds of salt.In other countries,you can exchange 1 pound of chicken for 7 pounds of salt.These facts indicate that

Correct Answer
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The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy.If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound,then Aviana should export goose meat.

Correct Answer
verified

Figure 9-12 -Refer to Figure 9-12.Equilibrium price and equilibrium quantity without trade are

Correct Answer
verified

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.When the country for which the figure is drawn allows international trade in cars,

Correct Answer
verified

Correct Answer
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a.$12
b.50
c.$15
d.3...
View Answer

A logical starting point from which the study of international trade begins is

Correct Answer
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In a 2007 New York Times article Paul Krugman wrote that

Correct Answer
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Figure 9-17 -Refer to Figure 9-17.With free trade,total surplus is

Correct Answer
verified

If Freedonia changes its laws to allow international trade in software and the world price is higher than its domestic price,then it must be the case that

Correct Answer
verified

Assume,for Canada,that the domestic price of tomatoes without international trade is higher than the world price of tomatoes.This suggests that,in the production of tomatoes,

Correct Answer
verified

The greater the elasticities of supply and demand,the smaller are the gains from trade.

Correct Answer
verified

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.

Correct Answer
verified

William and Jamal live in the country of Dumexia.As a result of Dumexia's legalization of international trade in bananas,William becomes better off and Jamal becomes worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Correct Answer
verified

Figure 9-3. The domestic country is China. -Refer to Figure 9-3.With no international trade,

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Correct Answer
verified

Suppose France imposes a tariff on wine of 3 euros per bottle.If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers,with the tariff,is 8 million bottles per year,then we can conclude that

Correct Answer
verified

Figure 9-5 -Refer to Figure 9-5.With trade,consumer surplus is

Correct Answer
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Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.In the absence of trade,the equilibrium price of wool in Scotland is

Correct Answer
verified

The North American Free Trade Agreement

Correct Answer
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Both tariffs and import quotas

Correct Answer
verified

Exam 9: Application: International Trade.

The nation of Woodland forbids international trade.In Woodland,you can exchange 1 pound of chicken for 5 pounds of salt.In other countries,you can exchange 1 pound of chicken for 7 pounds of salt.These facts indicate that

Correct AnswerverifiedShow Answer

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy.If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound,then Aviana should export goose meat.

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12.Equilibrium price and equilibrium quantity without trade are

Correct AnswerverifiedShow Answer

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.When the country for which the figure is drawn allows international trade in cars,

Correct AnswerverifiedShow Answer

Correct Answerverifieda.$12b.50c.$15d.3...View AnswerShow Answer

A logical starting point from which the study of international trade begins is

Correct AnswerverifiedShow Answer

In a 2007 New York Times article Paul Krugman wrote that

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17.With free trade,total surplus is

Correct AnswerverifiedShow Answer

If Freedonia changes its laws to allow international trade in software and the world price is higher than its domestic price,then it must be the case that

Correct AnswerverifiedShow Answer

Assume,for Canada,that the domestic price of tomatoes without international trade is higher than the world price of tomatoes.This suggests that,in the production of tomatoes,

Correct AnswerverifiedShow Answer

The greater the elasticities of supply and demand,the smaller are the gains from trade.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

William and Jamal live in the country of Dumexia.As a result of Dumexia's legalization of international trade in bananas,William becomes better off and Jamal becomes worse off.It follows that William is a seller,and Jamal is a buyer,of bananas.

Correct AnswerverifiedShow Answer

Figure 9-3. The domestic country is China. -Refer to Figure 9-3.With no international trade,

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Correct AnswerverifiedShow Answer

Suppose France imposes a tariff on wine of 3 euros per bottle.If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers,with the tariff,is 8 million bottles per year,then we can conclude that

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.With trade,consumer surplus is

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.In the absence of trade,the equilibrium price of wool in Scotland is

Correct AnswerverifiedShow Answer

The North American Free Trade Agreement

Correct AnswerverifiedShow Answer

Both tariffs and import quotas

Correct AnswerverifiedShow Answer

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a.$12
b.50
c.$15
d.3...
View Answer

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