Question 1

For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

Accepted Answer

A) True 
 B)False

Question 2

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 3

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Accepted Answer

A)   export copper, since that country has a comparative advantage in copper.
B)   import copper, since that country has a comparative advantage in copper.
C)   neither export nor import copper, since that country cannot gain from trade.
D)   neither export nor import copper, since that country already produces copper at a low cost compared to other countries.E) C) and D)
F) A) and B)

Question 4

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 5

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 6

The world price of a ton of steel is $650. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began

Accepted Answer

A)   exporting steel and the price per ton in Russia decreased to $650.
B)   exporting steel and the price per ton in Russia remained at $1,000.
C)   importing steel and the price per ton in Russia decreased to $650.
D)   importing steel and the price per ton in Russia remained at $1,000.E) All of the above
F) A) and C)

Question 7

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Accepted Answer

A) True 
 B)False

Question 8

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

Accepted Answer

A) True 
 B)False

Question 9

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, relative to the no-trade situation, international trade in cardboard

Accepted Answer

A)   benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660.
B)   harms Boxlandian consumers by $736 and harms Boxlandian producers by $598.
C)   harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864.
D)   harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984.E) B) and C)
F) A) and D)

Question 10

Figure 9-4. The domestic country is Nicaragua. 
-Refer to Figure 9-4. Which of the following statements is accurate?

Accepted Answer

A)   Consumer surplus with trade is $3,200.
B)   Producer surplus with trade is $375.
C)   The gains from trade amount to $800.
D)   The gains from trade are represented on the graph by the area bounded by the points (0, $12) , (300, $12) , (300, $7)  and (0, $7) .E) A) and B)
F) A) and D)

Question 11

The "unfair­competition" argument might be cited by an American who believes that

Accepted Answer

A)   almost every country has a comparative advantage, relative to the United States, in producing almost all goods.
B)   young industries should be protected against foreign competition until they become profitable.
C)   the American automobile industry should be protected against Japanese firms that are able to produce automobiles at relatively low cost.
D)   the French government's subsidies to French farmers justify restrictions on American imports of French agricultural products.E) C) and D)
F) B) and D)

Question 12

Figure 9-12 
-Refer to Figure 9-12. With trade allowed, this country

Accepted Answer

A)   exports 400 units of the good.
B)   exports 800 units of the good.
C)   imports 400 units of the good.
D)   exports 1,600 units of the good.E) A) and D)
F) A) and B)

Question 13

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-24. With free trade, total surplus is

Accepted Answer

A)   $500.
B)   $800.
C)   $1,000.
D)   $1,300.E) B) and D)
F) C) and D)

Question 14

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?

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

Question 15

Trade among nations is ultimately based on

Accepted Answer

A)   absolute advantage.
B)   strategic advantage.
C)   comparative advantage.
D)   technical advantage.E) All of the above
F) A) and C)

Question 16

Which of the following arguments for trade restrictions is often advanced?

Accepted Answer

A)   Trade restrictions make all Americans better off.
B)   Trade restrictions increase economic efficiency.
C)   Trade restrictions are necessary for economic growth.
D)   Trade restrictions are sometimes necessary for national security.E) A) and D)
F) A) and B)

Question 17

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

Accepted Answer

A)   Vietnam has a comparative advantage over other countries and Vietnam will import textiles.
B)   Vietnam has a comparative advantage over other countries and Vietnam will export textiles.
C)   other countries have a comparative advantage over Vietnam and Vietnam will import textiles.
D)   other countries have a comparative advantage over Vietnam and Vietnam will export textiles.E) A) and D)
F) None of the above

Question 18

Domestic producers of a good become worse off, and domestic consumers of a good become better 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)   the country in question has a comparative advantage, relative to other countries, in producing the good.
D)   total surplus does not change as a result.E) B) and D)
F) A) and D)

Question 19

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

Accepted Answer

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

Question 20

When a country that imports a particular good imposes an import quota on that good,

Accepted Answer

A)   producer surplus increases and total surplus increases in the market for that good.
B)   producer surplus increases and total surplus decreases in the market for that good.
C)   producer surplus decreases and total surplus increases in the market for that good.
D)   producer surplus decreases and total surplus decreases in the market for that good.E) B) and D)
F) A) and B)

Exam 9: Application: International Trade

Which of the following arguments for trade restrictions is often advanced?

Correct Answer
verified

The world price of a ton of steel is $650. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Figure 9-12 -Refer to Figure 9-12. With trade allowed, this country

Correct Answer
verified

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
verified

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
verified

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

Correct Answer
verified

The "unfaircompetition" argument might be cited by an American who believes that

Correct Answer
verified

When a country that imports a particular good imposes an import quota on that good,

Correct Answer
verified

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. With free trade, total surplus is

Correct Answer
verified

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

Correct Answer
verified

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Which of the following statements is accurate?

Correct Answer
verified

Trade among nations is ultimately based on

Correct Answer
verified

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

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

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Correct Answer
verified

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Correct Answer
verified

For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

Correct Answer
verified

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

Correct Answer
verified

Exam 9: Application: International Trade

Which of the following arguments for trade restrictions is often advanced?

Correct AnswerverifiedShow Answer

The world price of a ton of steel is $650. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12. With trade allowed, this country

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

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

Correct AnswerverifiedShow Answer

The "unfair­competition" argument might be cited by an American who believes that

Correct AnswerverifiedShow Answer

When a country that imports a particular good imposes an import quota on that good,

Correct AnswerverifiedShow Answer

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. With free trade, total surplus is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Which of the following statements is accurate?

Correct AnswerverifiedShow Answer

Trade among nations is ultimately based on

Correct AnswerverifiedShow Answer

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

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

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Correct AnswerverifiedShow Answer

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Correct AnswerverifiedShow Answer

For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

Correct AnswerverifiedShow Answer

If a country allows free trade and imports cars, then it is the case that the gains to domestic producers outweigh the losses to domestic consumers.

Correct AnswerverifiedShow Answer

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The "unfaircompetition" argument might be cited by an American who believes that

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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