Question 1

​We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

Accepted Answer

A) True 
 B)False

Question 2

Figure 9-3 
-Refer to Figure 9-3. With trade and without a tariff,

Accepted Answer

A)  the domestic price is equal to the world price.
B)  roses are sold at $4 in this market.
C)  there is a shortage of 400 roses in this market.
D)  this country imports 200 roses.E) B) and C)
F) A) and C)

Question 3

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Scenario 9-1
​
For a small country called Boxland, the equation of the domestic demand curve for cardboard is QD = 210 − 2P, where QD represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is QS = -90 + 3P, where QS represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard.
-Refer to Scenario 9-1. Suppose the world price of cardboard is $82.5. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

Accepted Answer

A)  domestic producers of cardboard become better off and domestic consumers of cardboard become better off.
B)  domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
C)  domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.
D)  domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.E) B) and C)
F) All of the above C

Question 6

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Accepted Answer

A) True 
 B)False

Question 7

Figure 9-10
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 9-10. If the country allows free trade, how many units will domestic consumers demand and how many units will domestic producers supply?

Accepted Answer

With trade, domestic...

Question 8

When a government imposes a tariff on a product, the domestic price will equal the world price.

Accepted Answer

A) True 
 B)False  False

Question 9

Figure 9-8
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 9-8. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Accepted Answer

With trade, consumer surplus increases by $5,000, producer surplus falls by $3,000, and total surplus rises by $2,000.

Question 10

Figure 9-9
The following diagram shows the domestic demand and domestic supply curves in a market.  ​
-Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers supply?

Accepted Answer

Domestic consumers w...

Question 11

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Accepted Answer

A)  Wheatland has a comparative advantage, relative to other countries, in producing corn.
B)  other countries have a comparative advantage, relative to Wheatland, in producing fish.
C)  the price of fish in Wheatland exceeds the world price of fish.
D)  if Wheatland were to allow trade, it would import corn.E) B) and D)
F) A) and D)

Question 12

The General Agreement on Tariffs and Trade (GATT)  was initiated in response to

Accepted Answer

A)  an increase in exports of low-priced goods from developing countries to developed countries.
B)  the replacement of manufacturing jobs with service jobs in developed countries.
C)  economic dislocations caused by the North American Free Trade Agreement (NAFT
A)   in the 1990s.
D)  high tariffs imposed during the Great Depression of the 1930s.E) A) and B)
F) B) and D)

Question 13

Figure 9-10
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 9-10. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The equilibrium pric...

Question 14

Figure 9-9
The following diagram shows the domestic demand and domestic supply curves in a market.  ​
-Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Accepted Answer

With trade...

Question 15

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Accepted Answer

A) True 
 B)False

Question 16

Figure 9-5 
-Refer to Figure 9-5. The change in total surplus in this market because of trade is

Accepted Answer

A)  A, and this area represents a loss of total surplus.
B)  B, and this area represents a gain in total surplus.
C)  C, and this area represents a loss of total surplus.
D)  D, and this area represents a gain in total surplus.E) None of the above
F) A) and B)

Question 17

How does an import quota differ from an equivalent tariff?

Accepted Answer

Both the import quota and the tariff rai...

Question 18

The North American Free Trade Agreement

Accepted Answer

A)  is an example of the unilateral approach to free trade.
B)  eliminated tariffs on imports to North America from the rest of the world.
C)  reduced trade restrictions among Canada, Mexico, and the United States.
D)  eliminated quotas between North America and China.E) None of the above
F) A) and B)

Question 19

Figure 9-6 
-The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

Accepted Answer

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

Question 20

When a country allows trade and becomes an exporter of silk, which of the following is not a consequence?

Accepted Answer

A)  The price paid by domestic consumers of silk increases.
B)  The price received by domestic producers of silk increases.
C)  The losses of domestic consumers of silk exceed the gains of domestic producers of silk.
D)  The gains of domestic producers of silk exceed the losses of domestic consumers of silk.E) None of the above
F) A) and B)

Exam 9: Application: International Trade

We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

Correct Answer
verified

Figure 9-3 -Refer to Figure 9-3. With trade and without a tariff,

Correct Answer
verified

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Correct Answer
verified

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
verified

Correct Answer
verified
C

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Correct Answer
verified

Correct Answer
verified
With trade, domestic...
View Answer

When a government imposes a tariff on a product, the domestic price will equal the world price.

Correct Answer
verified
False

Figure 9-8 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 9-8. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Correct Answer
verified
With trade, consumer surplus increases by $5,000, producer surplus falls by $3,000, and total surplus rises by $2,000.

Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers supply?

Correct Answer
verified
Domestic consumers w...
View Answer

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Correct Answer
verified

The General Agreement on Tariffs and Trade (GATT) was initiated in response to

Correct Answer
verified

Figure 9-10 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 9-10. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct Answer
verified
The equilibrium pric...
View Answer

Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Correct Answer
verified
With trade...
View Answer

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Correct Answer
verified

Figure 9-5 -Refer to Figure 9-5. The change in total surplus in this market because of trade is

Correct Answer
verified

How does an import quota differ from an equivalent tariff?

Correct Answer
verified
Both the import quota and the tariff rai...
View Answer

The North American Free Trade Agreement

Correct Answer
verified

Figure 9-6 -The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

Correct Answer
verified

When a country allows trade and becomes an exporter of silk, which of the following is not a consequence?

Correct Answer
verified

Exam 9: Application: International Trade

​We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

Correct AnswerverifiedShow Answer

Figure 9-3 -Refer to Figure 9-3. With trade and without a tariff,

Correct AnswerverifiedShow Answer

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

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

Correct AnswerverifiedC

Policymakers often consider trade restrictions in order to protect domestic producers from foreign competitors.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade, domestic...View AnswerShow Answer

When a government imposes a tariff on a product, the domestic price will equal the world price.

Correct AnswerverifiedFalse

Figure 9-8 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 9-8. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Correct AnswerverifiedWith trade, consumer surplus increases by $5,000, producer surplus falls by $3,000, and total surplus rises by $2,000.

Correct AnswerverifiedDomestic consumers w...View AnswerShow Answer

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Correct AnswerverifiedShow Answer

The General Agreement on Tariffs and Trade (GATT) was initiated in response to

Correct AnswerverifiedShow Answer

Figure 9-10 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 9-10. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. ​ -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Correct AnswerverifiedWith trade...View AnswerShow Answer

If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good.

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5. The change in total surplus in this market because of trade is

Correct AnswerverifiedShow Answer

How does an import quota differ from an equivalent tariff?

Correct AnswerverifiedBoth the import quota and the tariff rai...View AnswerShow Answer

The North American Free Trade Agreement

Correct AnswerverifiedShow Answer

Figure 9-6 -The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an exporter of silk, which of the following is not a consequence?

Correct AnswerverifiedShow Answer

We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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Correct Answer
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With trade, domestic...
View Answer

Correct Answer
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False

Figure 9-8 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 9-8. If the country allows free trade, by how much do consumer surplus, producer surplus, and total surplus change with trade?

Correct Answer
verified
With trade, consumer surplus increases by $5,000, producer surplus falls by $3,000, and total surplus rises by $2,000.

Correct Answer
verified
Domestic consumers w...
View Answer

Correct Answer
verified

Correct Answer
verified

Figure 9-10 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 9-10. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Correct Answer
verified
The equilibrium pric...
View Answer

Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Correct Answer
verified
With trade...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Both the import quota and the tariff rai...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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