Question 1

A tariff on a product

Accepted Answer

A)   is a direct quantitative restriction on the amount of a good that can be imported.
B)   increases the domestic quantity supplied.
C)   increases domestic consumer surplus.
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 2

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit, and suppose the country imposes a $1 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 3

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

Question 4

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. 
-Refer to Figure 9-8. The country for which the figure is drawn

Accepted Answer

A)   has a comparative advantage relative to other countries in the production of cars and it will export cars.
B)   has a comparative advantage relative to other countries in the production of cars and it will import cars.
C)   has a comparative disadvantage relative to other countries in the production of cars and it will export cars.
D)   has a comparative disadvantage relative to other countries in the production of cars and it will import cars.E) B) and C)
F) A) and B)

Question 5

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.
We can conclude that

Accepted Answer

A)   Brownland became an exporter of wheat.
B)   consumer surplus in Brownland increased by $3 million.
C)   the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left.
D)   this example is inconsistent with the economic theory of international trade.E) A) and D)
F) C) and D)

Question 6

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 $45. 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 better off and domestic consumers of cardboard become worse off.
C)   domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
D)   domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.E) None of the above
F) A) and B)

Question 7

When a country that imports a particular good imposes a tariff 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) None of the above
F) A) and D)

Question 8

Free trade allows firms to realize economies of scale, resulting in higher costs of production.

Accepted Answer

A) True 
 B)False

Question 9

Tariffs and quotas are different in the sense that

Accepted Answer

A)   tariffs cause deadweight losses, while quotas do not cause deadweight losses.
B)   tariffs raise revenue for the government, while quotas do not raise revenue for the government.
C)   tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers.
D)   tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers.E) A) and D)
F) A) and C)

Question 10

Figure 9-4. The domestic country is Nicaragua. 
-Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

Accepted Answer

A)   $375.
B)   $2,000.
C)   $2,250.
D)   $8,700.E) B) and C)
F) A) and C)

Question 11

Figure 9-15 
-Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are

Accepted Answer

A)   P1 and Q1.
B)   P1 and Q4.
C)   P2 and Q2.
D)   P2 and Q3.E) None of the above
F) A) and B)

Question 12

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 $45. Then Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)   $88.75.
B)   $102.50.
C)   $122.50.
D)   $135.00.E) A) and D)
F) B) and C)

Question 13

The two basic approaches that a country can take as a means to achieve free trade are the

Accepted Answer

A)   unilateral approach and the multilateral approach.
B)   short-run approach and the long-run approach.
C)   continental approach and the global approach.
D)   industry approach and the security approach.E) B) and D)
F) A) and D)

Question 14

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then

Accepted Answer

A)   that country becomes an exporter of pistachios.
B)   that country has a comparative advantage in producing pistachios.
C)   at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 15

Figure 9-10. The figure applies to Mexico and the good is rifles. 
-Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Accepted Answer

A)   P1 and Q1.
B)   P1 and Q2.
C)   P2 and Q2.
D)   P0 and Q0.E) A) and D)
F) A) and C)

Question 16

Figure 9-15 
-Refer to Figure 9-15. For the saddle market, area E represents

Accepted Answer

A)   government's revenue from the tariff.
B)   producer surplus after the tariff becomes effective.
C)   the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff.
D)   the decrease in total surplus, relative to the free-trade situation, as a result of the tariff.E) All of the above
F) A) and D)

Question 17

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Accepted Answer

A)   Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar.
B)   Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions.
C)   Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar.
D)   Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions.E) B) and D)
F) A) and B)

Question 18

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 tariff

Accepted Answer

A)   decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
B)   decreases producer surplus by the area C + D and decreases consumer surplus by the area D + E + F.
C)   increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
D)   increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F.E) B) and C)
F) All of the above

Question 19

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

Question 20

A tax on an imported good is called a .

Accepted Answer

The answer of A tax on an imported good is...

Exam 9: Application: International Trade

A tax on an imported good is called a .

Correct Answer
verified

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area E represents

Correct Answer
verified

When a country that imports a particular good imposes a tariff on that good,

Correct Answer
verified

Tariffs and quotas are different in the sense that

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are

Correct Answer
verified

Correct Answer
verified

A tariff on a product

Correct Answer
verified

Free trade allows firms to realize economies of scale, resulting in higher costs of production.

Correct Answer
verified

Correct Answer
verified

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 tariff

Correct Answer
verified

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

Correct Answer
verified

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

Correct Answer
verified

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
verified

The two basic approaches that a country can take as a means to achieve free trade are the

Correct Answer
verified

Correct Answer
verified
With trade and a tariff, consu...
View Answer

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then

Correct Answer
verified

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. The country for which the figure is drawn

Correct Answer
verified

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

Correct Answer
verified

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Correct Answer
verified

Exam 9: Application: International Trade

A tax on an imported good is called a .

Correct AnswerverifiedShow Answer

When the nation of Brownland first permitted trade with other nations, domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million. We can conclude that

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area E represents

Correct AnswerverifiedShow Answer

When a country that imports a particular good imposes a tariff on that good,

Correct AnswerverifiedShow Answer

Tariffs and quotas are different in the sense that

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A tariff on a product

Correct AnswerverifiedShow Answer

Free trade allows firms to realize economies of scale, resulting in higher costs of production.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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 tariff

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests

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 two basic approaches that a country can take as a means to achieve free trade are the

Correct AnswerverifiedShow Answer

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

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then

Correct AnswerverifiedShow Answer

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. The country for which the figure is drawn

Correct AnswerverifiedShow Answer

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

Correct AnswerverifiedShow Answer

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Correct AnswerverifiedShow Answer

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With trade and a tariff, consu...
View Answer

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