Question 1

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 
-Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

Accepted Answer

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

Question 2

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

Accepted Answer

A)   importing televisions and the price of a television in Paraguay decreased to $300.
B)   importing televisions and the price of a television in Paraguay remained at $350.
C)   exporting televisions and the price of a television in Paraguay decreased to $300.
D)   exporting televisions and the price of a television in Paraguay remained at $350.E) A) and D)
F) None of the above

Question 3

Assume the nation of Teeveeland does not trade with the rest of the world. By comparing the world price of televisions to the price of televisions in Teeveeland, we can determine whether

Accepted Answer

A)   consumer surplus exceeds producer surplus in Teeveeland.
B)   Teeveeland has an absolute advantage in producing televisions.
C)   Teeveeland has a comparative advantage in producing televisions.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 4

Figure 9-27
The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-27. Suppose the country imposes a $5 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus?

Accepted Answer

With trade and a tariff, consu...

Question 5

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, how much is total surplus?

Accepted Answer

With trade...

Question 6

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. The amount of revenue collected by the government from the tariff is

Accepted Answer

A)   $6,000.
B)   $9,000.
C)   $12,000.
D)   $15,000.E) B) and C)
F) A) and D)

Question 7

If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

Accepted Answer

A) True 
 B)False

Question 8

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. The increase in total surplus resulting from trade is

Accepted Answer

A)   $640, since consumer surplus increases by $1,760 and producer surplus falls by $1,120.
B)   $1,280, since consumer surplus increases by $3,520 and producer surplus falls by $2,240.
C)   $2,240, since consumer surplus increases by $3,240 and producer surplus falls by $1,000.
D)   $2,560, since consumer surplus increases by $7,040 and producer surplus falls by $4,480.E) A) and C)
F) B) and C)

Question 9

When a country allows trade and becomes an importer of jet skis,

Accepted Answer

A)   domestic producers of jet skis are worse off, domestic consumers of jet skis are better off, and the economic well-being of the country rises.
B)   domestic producers of jet skis are worse off, domestic consumers of jet skis are better off, and the economic well-being of the country falls.
C)   domestic producers of jet skis are better off, domestic consumers of jet skis are worse off, and the economic well-being of the country rises.
D)   domestic producers of jet skis are better off, domestic consumers of jet skis are worse off, and the economic well-being of the country falls.E) B) and D)
F) C) and D)

Question 10

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. Before the tariff is imposed, this country

Accepted Answer

A)   imports 200 roses.
B)   imports 400 roses.
C)   exports 200 roses.
D)   exports 400 roses.E) None of the above
F) A) and B)

Question 11

Figure 9-10. The figure applies to Mexico and the good is rifles. 
-Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

Accepted Answer

A)   P0 and Q0.
B)   P1 and Q1.
C)   P2 and Q2.
D)   P1 and Q0.E) C) and D)
F) All of the above

Question 12

Figure 9-4. The domestic country is Nicaragua. 
-Refer to Figure 9-4. With trade, Nicaragua

Accepted Answer

A)   imports 150 calculators.
B)   imports 250 calculators.
C)   exports 100 calculators.
D)   exports 250 calculators.E) A) and D)
F) A) and C)

Question 13

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Accepted Answer

A)   $200.
B)   $400.
C)   $500.
D)   $600.E) All of the above
F) B) and D)

Question 14

Figure 9-26
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-26. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric...

Question 15

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is
$52 per bushel. The U.S. is a price-taker in the market for peaches.
-Refer to Scenario 9-1. If trade in peaches is allowed, U.S. producers of peaches

Accepted Answer

A)   will be better off.
B)   will be worse off.
C)   will be unaffected.
D)   will experience a decrease in their collective producer surplus.E) All of the above
F) C) and D)

Question 16

Figure 9-21
The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-21. Producer surplus with free trade is

Accepted Answer

A)   $14,000.
B)   $18,000.
C)   $24,000.
D)   $32,000.E) A) and B)
F) B) and C)

Question 17

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Accepted Answer

The equilibrium pric...

Question 18

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

Question 19

Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. 
-Refer to Figure 9-18. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $3, then the policy change results in a

Accepted Answer

A)   $15.00 decrease in producer surplus.
B)   $45.00 increase in consumer surplus.
C)   $20.00 increase in total surplus.
D)   $12.50 increase in total surplus.E) B) and C)
F) C) and D)

Question 20

The principle of comparative advantage asserts that

Accepted Answer

A)   not all countries can benefit from trade with other countries.
B)   the world price of a good will prevail in all countries, regardless of whether those countries allow international trade in that good.
C)   countries can become better off by exporting goods, but they cannot become better off by importing goods.
D)   countries can become better off by specializing in what they do best.E) A) and D)
F) A) and C)

Exam 9: Application: International Trade

The principle of comparative advantage asserts that

Correct Answer
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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Correct Answer
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Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

Correct Answer
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Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

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

Correct Answer
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Assume the nation of Teeveeland does not trade with the rest of the world. By comparing the world price of televisions to the price of televisions in Teeveeland, we can determine whether

Correct Answer
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Correct Answer
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With trade and a tariff, consu...
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Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

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The equilibrium pric...
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When a country allows trade and becomes an importer of jet skis,

Correct Answer
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Correct Answer
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With trade...
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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. The increase in total surplus resulting from trade is

Correct Answer
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If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

Correct Answer
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Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, U.S. producers of peaches

Correct Answer
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Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

Correct Answer
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Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. With trade, Nicaragua

Correct Answer
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Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

Correct Answer
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Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Correct Answer
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The equilibrium pric...
View Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Before the tariff is imposed, this country

Correct Answer
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Correct Answer
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Exam 9: Application: International Trade

The principle of comparative advantage asserts that

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Correct AnswerverifiedShow Answer

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

Correct AnswerverifiedShow Answer

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. The price and quantity of rifles in Mexico before trade is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assume the nation of Teeveeland does not trade with the rest of the world. By comparing the world price of televisions to the price of televisions in Teeveeland, we can determine whether

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade and a tariff, consu...View AnswerShow Answer

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an importer of jet skis,

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Correct AnswerverifiedWith trade...View AnswerShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. The increase in total surplus resulting from trade is

Correct AnswerverifiedShow Answer

If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

Correct AnswerverifiedShow Answer

Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. -Refer to Scenario 9-1. If trade in peaches is allowed, U.S. producers of peaches

Correct AnswerverifiedShow Answer

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Producer surplus with free trade is

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Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. With trade, Nicaragua

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Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area

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Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. With no trade allowed, what are the equilibrium price and quantity in this market?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Before the tariff is imposed, this country

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Correct AnswerverifiedShow Answer

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

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With trade and a tariff, consu...
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The equilibrium pric...
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With trade...
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The equilibrium pric...
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