Question 1

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Accepted Answer

A) True 
 B)False

Question 2

When a country allows trade and becomes an exporter of a good,which of the following is not a consequence?

Accepted Answer

A)   The price paid by domestic consumers of the good increases.
B)   The price received by domestic producers of the good increases.
C)   The losses of domestic consumers of the good exceed the gains of domestic producers of the good.
D)   The gains of domestic producers of the good exceed the losses of domestic consumers of the good.E) All of the above
F) A) and C)

Question 3

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. 1 - 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) ." class="answers-bank-image d-inline" rel="preload" >
-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) .E) A) and D)
F) None of the above

Question 4

Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs.An economist would argue that

Accepted Answer

A)   foreign competition may cause unemployment in import-competing industries,but the effect is temporary because other industries,especially exporting industries,will be expanding.
B)   foreign competition may cause unemployment in import-competing industries,but the increase in consumer surplus due to free trade is more valuable than the lost jobs.
C)   the critics are correct,so countries must protect their industries with tariffs or quotas.
D)   foreign competition may cause unemployment in import-competing industries,but the increase in the variety of goods consumers can choose from is more valuable than the lost jobs.E) All of the above
F) A) and B)

Question 5

When a country allows trade and becomes an importer of a good,

Accepted Answer

A)   everyone in the country benefits.
B)   the gains of the winners exceed the losses of the losers.
C)   the losses of the losers exceed the gains of the winners.
D)   everyone in the country loses.E) B) and D)
F) B) and C)

Question 6

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 and international trade is allowed.Then Boxland's consumers demand A)  110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B)  110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C)  96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D)  96 tons of cardboard and Boxland's producers supply 96 tons of cardboard." class="answers-bank-image d-inline" rel="preload" > ,
where        , 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 and international trade is allowed.Then Boxland's consumers demand A)  110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B)  110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C)  96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D)  96 tons of cardboard and Boxland's producers supply 96 tons of cardboard." class="answers-bank-image d-inline" rel="preload" > represents the domestic quantity of cardboard demanded,in tons,and        , 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 and international trade is allowed.Then Boxland's consumers demand A)  110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B)  110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C)  96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D)  96 tons of cardboard and Boxland's producers supply 96 tons of cardboard." class="answers-bank-image d-inline" rel="preload" > 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 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 and international trade is allowed.Then Boxland's consumers demand A)  110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B)  110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C)  96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D)  96 tons of cardboard and Boxland's producers supply 96 tons of cardboard." class="answers-bank-image d-inline" rel="preload" > ,
where        , 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 and international trade is allowed.Then Boxland's consumers demand A)  110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B)  110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C)  96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D)  96 tons of cardboard and Boxland's producers supply 96 tons of cardboard." class="answers-bank-image d-inline" rel="preload" > represents the domestic quantity of cardboard supplied,in tons,and        , 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 and international trade is allowed.Then Boxland's consumers demand A)  110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B)  110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C)  96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D)  96 tons of cardboard and Boxland's producers supply 96 tons of cardboard." class="answers-bank-image d-inline" rel="preload" > again represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $45 and international trade is allowed.Then Boxland's consumers demand

Accepted Answer

A)   110 tons of cardboard and Boxland's producers supply 75 tons of cardboard.
B)   110 tons of cardboard and Boxland's producers supply 96 tons of cardboard.
C)   96 tons of cardboard and Boxland's producers supply 75 tons of cardboard.
D)   96 tons of cardboard and Boxland's producers supply 96 tons of cardboard.E) B) and D)
F) All of the above

Question 7

Figure 9-5 
-Refer to Figure 9-5.The horizontal line at the world price of wagons represents the

Accepted Answer

A)   demand for wagons from the rest of the world.
B)   supply of wagons from the rest of the world.
C)   level of inefficiency in the domestic market caused by trade.
D)   surplus in the domestic wagon market.E) A) and B)
F) A) and C)

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 $60.Then Boxland's gains from international trade in cardboard amount to A)  $145. B)  $160. C)  $210. D)  $320." class="answers-bank-image d-inline" rel="preload" > ,
where        , 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 $60.Then Boxland's gains from international trade in cardboard amount to A)  $145. B)  $160. C)  $210. D)  $320." class="answers-bank-image d-inline" rel="preload" > represents the domestic quantity of cardboard demanded,in tons,and        , 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 $60.Then Boxland's gains from international trade in cardboard amount to A)  $145. B)  $160. C)  $210. D)  $320." class="answers-bank-image d-inline" rel="preload" > 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 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 $60.Then Boxland's gains from international trade in cardboard amount to A)  $145. B)  $160. C)  $210. D)  $320." class="answers-bank-image d-inline" rel="preload" > ,
where        , 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 $60.Then Boxland's gains from international trade in cardboard amount to A)  $145. B)  $160. C)  $210. D)  $320." class="answers-bank-image d-inline" rel="preload" > represents the domestic quantity of cardboard supplied,in tons,and        , 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 $60.Then Boxland's gains from international trade in cardboard amount to A)  $145. B)  $160. C)  $210. D)  $320." class="answers-bank-image d-inline" rel="preload" > again represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $60.Then Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)   $145.
B)   $160.
C)   $210.
D)   $320.E) A) and D)
F) A) and C)

Question 9

The price of a good that prevails in a world market is called the

Accepted Answer

A)   absolute price.
B)   relative price.
C)   comparative price.
D)   world price.E) C) and D)
F) B) and C)

Question 10

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.E) A) and B)
F) None of the above

Question 11

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Accepted Answer

A) True 
 B)False

Question 12

Figure 9-13 
-Refer to Figure 9-13.Consumer surplus after trade is

Accepted Answer

A)   $3,600.
B)   $5,400.
C)   $7,200.
D)   $8,100.E) A) and D)
F) B) and D)

Question 13

How does an import quota differ from an equivalent tariff?

Accepted Answer

Both the import quota and the tariff rai...

Question 14

Relative to a situation in which domestic firms do not compete with foreign firms,firms in countries that engage in free trade

Accepted Answer

A)   can realize economies of scale more fully.
B)   have greater market power.
C)   experience larger producer surplus.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 15

Suppose England exports cars to Australia and imports cheese from Mexico.This situation suggests that

Accepted Answer

A)   England has a comparative advantage relative to Mexico in producing cheese,and Australia has a comparative advantage relative to England in producing cars.
B)   England has a comparative advantage relative to Australia in producing cars,and Mexico has a comparative advantage relative to England in producing cheese.
C)   England has an absolute advantage relative to Mexico in producing cheese,and Australia has an absolute advantage relative to England in producing cars.
D)   England has an absolute advantage relative to Australia in producing cars,and Mexico has an absolute advantage relative to England in producing cheese.E) A) and B)
F) A) and D)

Question 16

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

Accepted Answer

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

Question 17

Figure 9-17 
-Refer to Figure 9-17.With trade and a tariff,total surplus is

Accepted Answer

A)   $1,224.
B)   $1,416.
C)   $1,512.
D)   $1,704.E) None of the above
F) A) and D)

Question 18

If the United States threatens to impose a tariff on Honduran blueberries if Honduras does not remove agricultural subsidies,the United States will be

Accepted Answer

A)   better off no matter how Honduras responds.
B)   better off if Honduras gives in,and will be no worse off if it doesn't.
C)   worse off if Honduras doesn't give in to the threat.
D)   worse off no matter how Honduras responds.E) C) and D)
F) None of the above

Question 19

When a country allows trade and becomes an importer of a good,

Accepted Answer

A)   consumer surplus and producer surplus both increase.
B)   consumer surplus and producer surplus both decrease.
C)   consumer surplus increases and producer surplus decreases.
D)   consumer surplus decreases and producer surplus increases.E) None of the above
F) C) and D)

Question 20

For Country A,the world price of textiles exceeds the domestic equilibrium price of textiles.As a result,international trade allows sellers of textiles in Country A to experience greater producer surplus than they otherwise would experience.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

When a country allows trade and becomes an importer of a good,

Correct Answer
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Correct Answer
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The price of a good that prevails in a world market is called the

Correct Answer
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When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Correct Answer
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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?

Correct Answer
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Correct Answer
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When a country allows trade and becomes an exporter of a good,which of the following is not a consequence?

Correct Answer
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Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs.An economist would argue that

Correct Answer
verified

If the United States threatens to impose a tariff on Honduran blueberries if Honduras does not remove agricultural subsidies,the United States will be

Correct Answer
verified

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Correct Answer
verified

For Country A,the world price of textiles exceeds the domestic equilibrium price of textiles.As a result,international trade allows sellers of textiles in Country A to experience greater producer surplus than they otherwise would experience.

Correct Answer
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Figure 9-17 -Refer to Figure 9-17.With trade and a tariff,total surplus is

Correct Answer
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Suppose England exports cars to Australia and imports cheese from Mexico.This situation suggests that

Correct Answer
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Figure 9-5 -Refer to Figure 9-5.The horizontal line at the world price of wagons represents the

Correct Answer
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How does an import quota differ from an equivalent tariff?

Correct Answer
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Both the import quota and the tariff rai...
View Answer

A quota is

Correct Answer
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Finland allows trade with the rest of the world.We can determine whether Finland has a comparative advantage in producing pork if we

Correct Answer
verified

When a country allows trade and becomes an importer of a good,

Correct Answer
verified

Figure 9-13 -Refer to Figure 9-13.Consumer surplus after trade is

Correct Answer
verified

Relative to a situation in which domestic firms do not compete with foreign firms,firms in countries that engage in free trade

Correct Answer
verified

Exam 9: Application: International Trade

When a country allows trade and becomes an importer of a good,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The price of a good that prevails in a world market is called the

Correct AnswerverifiedShow Answer

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an exporter of a good,which of the following is not a consequence?

Correct AnswerverifiedShow Answer

Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs.An economist would argue that

Correct AnswerverifiedShow Answer

If the United States threatens to impose a tariff on Honduran blueberries if Honduras does not remove agricultural subsidies,the United States will be

Correct AnswerverifiedShow Answer

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Correct AnswerverifiedShow Answer

For Country A,the world price of textiles exceeds the domestic equilibrium price of textiles.As a result,international trade allows sellers of textiles in Country A to experience greater producer surplus than they otherwise would experience.

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17.With trade and a tariff,total surplus is

Correct AnswerverifiedShow Answer

Suppose England exports cars to Australia and imports cheese from Mexico.This situation suggests that

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.The horizontal line at the world price of wagons represents the

Correct AnswerverifiedShow Answer

How does an import quota differ from an equivalent tariff?

Correct AnswerverifiedBoth the import quota and the tariff rai...View AnswerShow Answer

A quota is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an importer of a good,

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13.Consumer surplus after trade is

Correct AnswerverifiedShow Answer

Relative to a situation in which domestic firms do not compete with foreign firms,firms in countries that engage in free trade

Correct AnswerverifiedShow Answer

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Both the import quota and the tariff rai...
View Answer

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