Question 1

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. With free trade, consumer surplus is

Accepted Answer

A)   $320.
B)   $640.
C)   $845.
D)   $1,690.E) A) and D)
F) A) and C)

Question 2

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. 
-Refer to Figure 9-14. The country for which the figure is drawn

Accepted Answer

A)   has a comparative advantage relative to other countries in the production of crude oil and it will export crude oil.
B)   has a comparative advantage relative to other countries in the production of crude oil and it will import crude oil.
C)   has a comparative disadvantage relative to other countries in the production of crude oil and it will export crude oil.
D)   has a comparative disadvantage relative to other countries in the production of crude oil and it will import crude oil.E) A) and C)
F) None of the above

Question 3

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. Relative to the free-trade outcome, the imposition of the tariff

Accepted Answer

A)   decreases imports of the good by 300 units and increases domestic production of the good by 300 units.
B)   decreases imports of the good by 300 units and increases domestic production of the good by 600 units.
C)   decreases imports of the good by 600 units and increases domestic production of the good by 300 units.
D)   decreases imports of the good by 600 units and increases domestic production of the good by 600 units.E) B) and D)
F) All of the above

Question 4

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 5

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. In the country for which the figure is drawn, total surplus with international trade in cars

Accepted Answer

A)   is represented by the area A + B + C.
B)   is represented by the area A + B + D.
C)   is smaller than producer surplus without international trade in cars.
D)   is larger than total surplus without international trade in cars.E) A) and B)
F) All of the above

Question 6

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much is the deadweight loss caused by the tariff?

Accepted Answer

The deadwe...

Question 8

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) All of the above

Question 9

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

Accepted Answer

A)   export 1,000 units of rice.
B)   export 1,500 units of rice.
C)   import 1,000 units of rice.
D)   import 1,500 units of rice.E) A) and B)
F) C) and D)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Suppose Japan exports cars to Russia and imports wine from France. This situation suggests

Accepted Answer

A)   Japan has a comparative advantage relative to France in producing wine, and Russia has a comparative advantage to Japan in producing cars.
B)   Japan has a comparative advantage relative to Russia in producing cars, and France has a comparative advantage relative to Japan in producing wine.
C)   Japan has an absolute advantage relative to Russia in producing cars, and France has an absolute advantage relative to Japan in producing wine.
D)   Japan has an absolute advantage relative to France in producing wine, and Russia has an absolute advantage relative to Japan in producing cars.E) B) and D)
F) A) and B)

Question 12

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. When trade in coffee is allowed, consumer surplus in Guatemala

Accepted Answer

A)   increases by the area B + D.
B)   increases by the area C + F.
C)   decreases by the area B + D.
D)   decreases by the area D + G.E) None of the above
F) A) and C)

Question 13

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. 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 14

Assume, for England, that the domestic price of wine without international trade is lower 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.E) A) and D)
F) None of the above

Question 15

When, in our analysis of the gains and losses from international trade, we assume that a particular country is small, we are

Accepted Answer

A)   assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries.
B)   assuming there is no demand for that country's domestically­produced goods by other countries.
C)   assuming international trade can benefit producers, but not consumers, in that country.
D)   making an assumption that is not necessary to analyze the gains and losses from international trade.E) B) and D)
F) A) and C)

Question 16

Most economists view the United States' experience with trade as

Accepted Answer

A)   one from which no firm conclusions about the virtues of free trade can be reached, due to the relatively short history of international trade in the U.S.
B)   one from which no firm conclusions about the virtues of free trade can be reached, due to the lack of trade within the U.S. throughout most of the early history of the U.S.
C)   an ongoing experiment that confirms the virtues of free trade.
D)   an ongoing experiment that calls into serious question the notion that free trade enhances the economic well- being of a nation.E) All of the above
F) None of the above

Question 17

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) A) and D)
F) None of the above

Question 18

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. 
-Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Accepted Answer

A)   consumer surplus for domestic crude-oil consumers decreases.
B)   the demand for crude oil by domestic crude-oil consumers decreases.
C)   the losses of the domestic losers outweigh the gains of the domestic winners.
D)   domestic crude-oil producers sell less crude oil.E) A) and C)
F) A) and B)

Question 19

Figure 9-12 
-Refer to Figure 9-12. With trade, the domestic price and domestic quantity demanded are

Accepted Answer

A)   $54 and 800.
B)   $54 and 1,600.
C)   $42 and 800.
D)   $42 and 1,200.E) None of the above
F) A) and B)

Question 20

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?

Accepted Answer

With trade and a tar...

Exam 9: Application: International Trade

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
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When, in our analysis of the gains and losses from international trade, we assume that a particular country is small, we are

Correct Answer
verified

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

Correct Answer
verified

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. The country for which the figure is drawn

Correct Answer
verified

Assume, for England, that the domestic price of wine without international trade is lower than the world price of wine. This suggests that, in the production of wine,

Correct Answer
verified

Correct Answer
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With trade and a tar...
View Answer

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

Correct Answer
verified

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. When trade in coffee is allowed, consumer surplus in Guatemala

Correct Answer
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Figure 9-12 -Refer to Figure 9-12. With trade, the domestic price and domestic quantity demanded 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. In the country for which the figure is drawn, total surplus with international trade in cars

Correct Answer
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Correct Answer
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Correct Answer
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The deadwe...
View Answer

Suppose Japan exports cars to Russia and imports wine from France. This situation suggests

Correct Answer
verified

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

Correct Answer
verified

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Correct Answer
verified

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Correct Answer
verified

Most economists view the United States' experience with trade as

Correct Answer
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Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is

Correct Answer
verified

Correct Answer
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The countr...
View Answer

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

Correct Answer
verified

Exam 9: Application: International Trade

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

When, in our analysis of the gains and losses from international trade, we assume that a particular country is small, we are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. The country for which the figure is drawn

Correct AnswerverifiedShow Answer

Assume, for England, that the domestic price of wine without international trade is lower than the world price of wine. This suggests that, in the production of wine,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade and a tar...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. When trade in coffee is allowed, consumer surplus in Guatemala

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12. With trade, the domestic price and domestic quantity demanded 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. In the country for which the figure is drawn, total surplus with international trade in cars

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe deadwe...View AnswerShow Answer

Suppose Japan exports cars to Russia and imports wine from France. This situation suggests

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in crude oil,

Correct AnswerverifiedShow Answer

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Correct AnswerverifiedShow Answer

Most economists view the United States' experience with trade as

Correct AnswerverifiedShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe countr...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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With trade and a tar...
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The deadwe...
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The countr...
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