Question 1

A tax on an imported good is called a

Accepted Answer

A)   quota.
B)   tariff.
C)   supply tax.
D)   trade tax.E) B) and C)
F) A) and D)

Question 2

Figure 9-11 
-Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

Accepted Answer

A)   A + B.
B)   A + B + C.
C)   B + C + D.
D)   A + B + C + D.E) A) and C)
F) All of the above

Question 3

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 C)
F) B) and C)

Question 4

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 5

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 D)
F) C) and D)

Question 6

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 7

Several arguments for restricting trade have been advanced. Those arguments do not include

Accepted Answer

A)   the jobs argument.
B)   the protection-as-a-bargaining-chip argument.
C)   the no-deadweight-loss argument.
D)   the infant-industry argument.E) A) and C)
F) A) and D)

Question 8

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

Accepted Answer

A)   cause these factories to pay the U.S. minimum wage.
B)   increase the rate of technological advance in poor countries so that they can afford to pay higher wages.
C)   increase poverty in poor countries and benefit U.S. firms which compete with these imports.
D)   harm U.S. firms which compete with these imports.E) C) and D)
F) B) and C)

Question 9

Suppose Jamaica has an absolute advantage over other countries in producing sugar, but other countries have a comparative advantage over Jamaica in producing sugar. If trade in sugar is allowed, Jamaica

Accepted Answer

A)   will import sugar.
B)   will export sugar.
C)   will either import sugar or export sugar, but it is not clear from the given information.
D)   would have nothing to gain either from exporting or importing sugar.E) B) and C)
F) C) and D)

Question 10

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

Accepted Answer

A)   Farmland has a comparative advantage, relative to other countries, in producing beef.
B)   other countries have an absolute advantage, relative to Farmland, in producing beef.
C)   the price of beef in Farmland exceeds the world price of beef.
D)   if Farmland were to allow trade, it would export pepper.E) A) and B)
F) A) and D)

Question 11

After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat, the nation began importing wheat. As a result, total surplus in the wheat market increased by $10 million. Which of the following changes could have occurred as well?

Accepted Answer

A)   The price of wheat in that nation increased with the adoption of the new policy.
B)   The domestic quantity of wheat supplied increased with the adoption of the new policy.
C)   Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million.
D)   Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million.E) None of the above
F) B) and D)

Question 12

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) A) and D)

Question 13

An import quota

Accepted Answer

A)   is preferable to a tariff since an import quota does not create a deadweight loss.
B)   is a tax on imported goods.
C)   reduces the welfare of domestic consumers.
D)   reduces the welfare of domestic producers.E) All of the above
F) B) and C)

Question 14

Figure 9-28
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-28. Suppose the world price in this market is $6. 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 15

Figure 9-13 
-Refer to Figure 9-13. With trade, the country

Accepted Answer

A)   exports 200 units of the good.
B)   exports 400 units of the good.
C)   imports 400 units of the good.
D)   imports 600 units of the good.E) B) and C)
F) All of the above

Question 16

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 tariff revenue?

Accepted Answer

With trade...

Exam 9: Application: International Trade

Suppose Jamaica has an absolute advantage over other countries in producing sugar, but other countries have a comparative advantage over Jamaica in producing sugar. If trade in sugar is allowed, Jamaica

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

Correct Answer
verified

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

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

Correct Answer
verified

Correct Answer
verified
With trade...
View 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

Correct Answer
verified

Figure 9-13 -Refer to Figure 9-13. With trade, the country

Correct Answer
verified

An import quota

Correct Answer
verified

Several arguments for restricting trade have been advanced. Those arguments do not include

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

Correct Answer
verified

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
verified
The equilibrium pric...
View Answer

A tax on an imported good is called a

Correct Answer
verified

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

Correct Answer
verified

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Correct Answer
verified
The countr...
View Answer

Exam 9: Application: International Trade

Suppose Jamaica has an absolute advantage over other countries in producing sugar, but other countries have a comparative advantage over Jamaica in producing sugar. If trade in sugar is allowed, Jamaica

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

Correct AnswerverifiedShow Answer

The nation of Farmland forbids international trade. In Farmland, you can exchange 1 pound of beef for 2 pounds of pepper. In other countries, you can exchange 1 pound of beef for 4 pounds of pepper. These facts indicate that

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade...View AnswerShow 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

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. With trade, the country

Correct AnswerverifiedShow Answer

An import quota

Correct AnswerverifiedShow Answer

Several arguments for restricting trade have been advanced. Those arguments do not include

Correct AnswerverifiedShow Answer

Figure 9-11 -Refer to Figure 9-11. Producer surplus plus consumer surplus in this market after trade is

Correct AnswerverifiedShow Answer

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

A tax on an imported good is called a

Correct AnswerverifiedShow Answer

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

Correct AnswerverifiedShow Answer

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Correct AnswerverifiedThe countr...View AnswerShow Answer

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With trade...
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The equilibrium pric...
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The countr...
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