Question 1

Figure 9-2 
-Refer to Figure 9-2.As a result of trade,total surplus increases by

Accepted Answer

A)   $80.
B)   $97.50.
C)   $162.50.
D)   $495.50.E) A) and D)
F) B) and C)

Question 2

Assume,for France,that the domestic price of tea without international trade is higher than the world price of tea.This suggests that

Accepted Answer

A)   other countries have a comparative advantage over France in producing tea.
B)   France has an absolute advantage over other countries in producing tea.
C)   France will export tea if international trade is allowed.
D)   French tea buyers will become worse off if international trade is allowed.E) A) and B)
F) A) and C)

Question 3

Trade enhances the economic well-being of a nation in the sense that

Accepted Answer

A)   both domestic producers and domestic consumers of a good become better off with trade,regardless of whether the nation imports or exports the good in question.
B)   the gains of domestic producers of a good exceed the losses of domestic consumers of a good,regardless of whether the nation imports or exports the good in question.
C)   trade results in an increase in total surplus.
D)   trade puts downward pressure on the prices of all goods.E) C) and D)
F) None of the above

Question 4

Tariffs and quotas are different in the sense that

Accepted Answer

A)   tariffs cause deadweight losses,while quotas do not cause deadweight losses.
B)   tariffs raise revenue for the government,while quotas do not raise revenue for the government.
C)   tariffs enhance the well-being of domestic consumers,while quotas diminish the well-being of domestic consumers.
D)   tariffs enhance the well-being of domestic producers,while quotas diminish the well-being of domestic producers.E) A) and B)
F) A) and C)

Question 5

Domestic producers of a good become better off,and domestic consumers of a good become worse off,when a country begins allowing international trade in that good and

Accepted Answer

A)   the country becomes an importer of the good as a result.
B)   the world price exceeds the domestic price of the good that prevailed before international trade was allowed.
C)   other countries have a comparative advantage,relative to the country in question,in producing the good.
D)   total surplus does not change as a result.E) B) and D)
F) None of the above

Question 6

Figure 9-6 
-Refer to Figure 9-6.Without trade,the equilibrium price of carnations is

Accepted Answer

A)   $8 and the equilibrium quantity is 300.
B)   $6 and the equilibrium quantity is 200.
C)   $6 and the equilibrium quantity is 400.
D)   $4 and the equilibrium quantity is 500.E) C) and D)
F) A) and C)

Question 7

Figure 9-2 
-Refer to Figure 9-2.This country

Accepted Answer

A)   has a comparative advantage in baskets.
B)   should export baskets.
C)   is a price taker in the world economy.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 8

Figure 9-15 1 and Q1. B)  P1 and Q4. C)  P2 and Q2. D)  P2 and Q3." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-15.With the tariff,the domestic price and domestic quantity demanded are

Accepted Answer

A)   P1 and Q1.
B)   P1 and Q4.
C)   P2 and Q2.
D)   P2 and Q3.E) A) and B)
F) A) and C)

Question 9

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 10

A tariff on a product

Accepted Answer

A)   enhances the economic well-being of the domestic economy.
B)   increases the domestic quantity supplied.
C)   increases the domestic quantity demanded.
D)   results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.E) B) and C)
F) All of the above

Question 11

A tariff on a product makes

Accepted Answer

A)   domestic sellers better off and domestic buyers worse off.
B)   domestic sellers worse off and domestic buyers worse off.
C)   domestic sellers better off and domestic buyers better off.
D)   domestic sellers worse off and domestic buyers better off.E) B) and D)
F) A) and D)

Question 12

Most economists support the infant-industry argument because it is so easy to implement in practice.

Accepted Answer

A) True 
 B)False

Question 13

What is the fundamental basis for trade among nations?

Accepted Answer

A)   shortages or surpluses in nations that do not trade
B)   misguided economic policies
C)   absolute advantage
D)   comparative advantageE) All of the above
F) A) and D)

Question 14

At present,the United States uses a system of quotas to limit the amount of sugar imported into the country.Which of the following statements is most likely true?

Accepted Answer

A)   The quotas are probably the result of lobbying from U.S.consumers of sugar.The quotas increase consumer surplus for the United States,reduce producer surplus for the United States,and harm foreign sugar producers.
B)   The quotas are probably the result of lobbying from U.S.producers of sugar.The quotas increase producer surplus for the United States,reduce consumer surplus for the United States,and harm foreign sugar producers.
C)   The quotas are probably the result of lobbying from foreign producers of sugar.The quotas reduce producer surplus for the United States,increase consumer surplus for the United States,and benefit foreign sugar producers.
D)   U.S.lawmakers did not need to be lobbied to impose the quotas because total surplus for the United States is higher with the quotas than without them.E) C) and D)
F) A) and D)

Question 15

Figure 9-17 
-Refer to Figure 9-17.When comparing no trade to free trade,the gain from trade is

Accepted Answer

A)   $72.
B)   $100.
C)   $150.
D)   $450.E) B) and D)
F) B) and C)

Question 16

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) C) and D)
F) B) and C)

Question 17

Figure 9-13 
-Refer to Figure 9-13.With trade,domestic production and domestic consumption,respectively,are

Accepted Answer

A)   600 and 600.
B)   600 and 300.
C)   300 and 900.
D)   600 and 900.E) B) and C)
F) None of the above

Question 18

NAFTA is an example of a multilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Question 19

An important factor in the decline of the U.S.textile industry over the past 100 or so years is

Accepted Answer

A)   foreign competitors that can produce quality textile goods at low cost.
B)   lower prices of goods that are substitutes for clothing.
C)   a decrease in Americans' demand for clothing,due to increased incomes and the fact that clothing is an inferior good.
D)   the fact that the minimum wage in the U.S.has failed to keep pace with the cost of living.E) B) and D)
F) All of the above

Question 20

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

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) B) and C)
F) A) and D)

Exam 9: Application: International Trade

A tariff on a product

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13.With trade,domestic production and domestic consumption,respectively,are

Correct AnswerverifiedShow Answer

Tariffs and quotas are different in the sense that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Domestic producers of a good become better off,and domestic consumers of a good become worse off,when a country begins allowing international trade in that good and

Correct AnswerverifiedShow Answer

Trade enhances the economic well-being of a nation in the sense 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

Figure 9-15 -Refer to Figure 9-15.With the tariff,the domestic price and domestic quantity demanded are

Correct AnswerverifiedShow Answer

A tariff on a product makes

Correct AnswerverifiedShow Answer

Assume,for France,that the domestic price of tea without international trade is higher than the world price of tea.This suggests that

Correct AnswerverifiedShow Answer

Most economists support the infant-industry argument because it is so easy to implement in practice.

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17.When comparing no trade to free trade,the gain from trade is

Correct AnswerverifiedShow Answer

An important factor in the decline of the U.S.textile industry over the past 100 or so years is

Correct AnswerverifiedShow Answer

At present,the United States uses a system of quotas to limit the amount of sugar imported into the country.Which of the following statements is most likely true?

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to Figure 9-2.As a result of trade,total surplus increases by

Correct AnswerverifiedShow Answer

Figure 9-6 -Refer to Figure 9-6.Without trade,the equilibrium price of carnations is

Correct AnswerverifiedShow Answer

What is the fundamental basis for trade among nations?

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to Figure 9-2.This country

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

NAFTA is an example of a multilateral approach to achieving free trade.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified