Question 1

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

Question 2

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then

Accepted Answer

A)   total surplus in the American television market decreases.
B)   producer surplus in the American television market increases.
C)   U.S. imports of foreign televisions decrease.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 3

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. A result of this country allowing international trade in crude oil is as follows:

Accepted Answer

A)   The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel.
B)   The effect on the well-being of domestic crude-oil consumers is unclear in that they now buy more crude oil, but at a higher price per barrel.
C)   The effect on the well-being of the country is unclear in that domestic producer surplus increases, while the effect on domestic consumer surplus is unclear.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 4

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. From the figure it is apparent that

Accepted Answer

A)   Guatemala will export coffee if trade is allowed.
B)   Guatemala will import coffee if trade is allowed.
C)   Guatemala has nothing to gain either by importing or exporting coffee.
D)   the world price will fall if Guatemala begins to allow its citizens to trade with other countries.E) A) and C)
F) All of the above

Question 5

Figure 9-15 
-Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Accepted Answer

A)   B.
B)   E.
C)   D + F.
D)   B + D + E + F.E) A) and C)
F) C) and D)

Question 6

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) A) and B)

Question 7

Figure 9-20
The figure illustrates the market for rice in Vietnam. 
-Refer to Figure 9-20. From the figure it is apparent that

Accepted Answer

A)   Vietnam has a comparative advantage in producing rice, relative to the rest of the world.
B)   foreign countries have a comparative advantage in producing rice, relative to Vietnam.
C)   Vietnam has an absolute advantage in producing rice, relative to the rest of the world.
D)   foreign countries have an absolute advantage in producing rice, relative to Vietnam.E) A) and D)
F) B) and C)

Question 8

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Accepted Answer

A)   People face tradeoffs.
B)   Trade can make everyone better off.
C)   Governments can sometimes improve market outcomes.
D)   Prices rise when the government prints too much money.E) None of the above
F) All of the above

Question 9

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. With trade and a tariff, consumer surplus is

Accepted Answer

A)   $75,000 and producer surplus is $27,000.
B)   $63,000 and producer surplus is $12,000.
C)   $75,000 and producer surplus is $12,000.
D)   $63,000 and producer surplus is $27,000.E) None of the above
F) B) and C)

Question 10

Most economists view the United States as an ongoing experiment that raises serious doubts about the virtues of free trade.

Accepted Answer

A) True 
 B)False

Question 11

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Without trade, total surplus amounts to

Accepted Answer

A)   $810.
B)   $1,620.
C)   $3,240.
D)   $6,480.E) B) and D)
F) A) and C)

Question 12

Assume, for England, that the domestic price of wine without international trade is higher 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 C)
F) A) and D)

Question 13

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) All of the above
F) B) and C)

Question 14

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

Question 15

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

Accepted Answer

A) True 
 B)False

Question 16

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Accepted Answer

A)   Incomes of domestic citizens increase, and tricycles are a normal good.
B)   Within this country, the price of a substitute for tricycles decreases.
C)   Within this country, the price of a complement to tricycles decreases.
D)   Wages increase for domestic workers who produce tricycles.E) B) and C)
F) A) and D)

Exam 9: Application: International Trade

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

Correct Answer
verified

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

Correct Answer
verified

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. From the figure it is apparent that

Correct Answer
verified

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, total surplus amounts to

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Correct Answer
verified

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Correct Answer
verified

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

Correct Answer
verified

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then

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

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

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. A result of this country allowing international trade in crude oil is as follows:

Correct Answer
verified

Most economists view the United States as an ongoing experiment that raises serious doubts about the virtues of free trade.

Correct Answer
verified

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. With trade and a tariff, consumer surplus is

Correct Answer
verified

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

Correct Answer
verified

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Correct Answer
verified

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

Correct Answer
verified

Exam 9: Application: International Trade

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. From the figure it is apparent that

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, total surplus amounts to

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Correct AnswerverifiedShow Answer

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. From the figure it is apparent that

Correct AnswerverifiedShow Answer

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then

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

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

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. A result of this country allowing international trade in crude oil is as follows:

Correct AnswerverifiedShow Answer

Most economists view the United States as an ongoing experiment that raises serious doubts about the virtues of free trade.

Correct AnswerverifiedShow Answer

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. With trade and a tariff, consumer surplus is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Correct AnswerverifiedShow Answer

The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.

Correct AnswerverifiedShow Answer

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