Question 1

A common argument in favor of restricting international trade in good x is based on the premise that

Accepted Answer

A)  international trade reduces total surplus in countries that export good x.
B)  international trade reduces total surplus in countries that import good x.
C)  international trade is desirable only when countries with different domestic supplies of natural resources play by different rules when trading with one another.
D)  trade restrictions can be useful when one country bargains with its trading partners.E) A) and D)
F) All of the above

Question 2

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Accepted Answer

A) True 
 B)False

Question 3

Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?

Accepted Answer

A)  Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
B)  Consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
C)  Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50.
D)  Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150.E) B) and D)
F) B) and C)

Question 4

In September 2009, President Obama

Accepted Answer

A)  imposed a tariff on tires imported from China; in doing so, the president reneged on an agreement into which the U.S. had entered in 2001.
B)  imposed a tariff on tires imported from China; the tariff was in accordance with an agreement into which the U.S. had entered in 2001.
C)  removed a tariff on tires imported from China; the tariff had been imposed by President George W. Bush.
D)  removed a tariff on tires imported from China; the tariff had been imposed by President Bill Clinton.E) None of the above
F) B) and D)

Question 5

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

Accepted Answer

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

Question 6

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

Accepted Answer

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

Question 7

Figure 9-10. The figure applies to Mexico and the good is rifles. 1 and Q1. B) P1 and Q2. C) P2 and Q2. D) P0 and Q0." class="answers-bank-image d-inline" rel="preload" >
-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) All of the above

Question 8

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

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

Question 9

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

Accepted Answer

A)  exporting steel and the price per ton in Russia decreased to $650.
B)  exporting steel and the price per ton in Russia remained at $1,000.
C)  importing steel and the price per ton in Russia decreased to $650.
D)  importing steel and the price per ton in Russia remained at $1,000.E) All of the above
F) None of the above

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

Question 11

What is the fundamental basis for trade among nations?

Accepted Answer

A)  shortages or surpluses in nations that do not trade
B)  misguided economic policies
C)  absolute advantage
D)  comparative advantageE) A) and B)
F) None of the above

Question 12

When a country allows trade and becomes an importer of a good,

Accepted Answer

A)  consumer surplus and producer surplus both increase.
B)  consumer surplus and producer surplus both decrease.
C)  consumer surplus increases and producer surplus decreases.
D)  consumer surplus decreases and producer surplus increases.E) None of the above
F) B) and D)

Question 13

Figure 9-20
The figure illustrates the market for rice in Vietnam. 
-Refer to Figure 9-20. With trade, Vietnam will

Accepted Answer

A)  export 1,000 units of rice.
B)  export 1,500 units of rice.
C)  import 1,000 units of rice.
D)  import 1,500 units of rice.E) A) and B)
F) A) and C)

Question 14

Figure 9-5 
-Refer to Figure 9-5. With trade, consumer surplus is

Accepted Answer

A)  $245.
B)  $362.50.
C)  $367.50.
D)  $607.50.E) A) and B)
F) A) and C)

Question 15

Countries that restrict foreign trade are likely to

Accepted Answer

A)  forgo the additional surplus that trade allows, but will probably enjoy economies of scale.
B)  forgo the additional surplus that trade allows, but will be compensated by a higher rate of technological change.
C)  forgo the additional surplus that trade allows, but will have a lower rate of unemployment.
D)  have more firms with domestic market power.E) None of the above
F) A) and D)

Question 16

The nation of Pineland forbids international trade. In Pineland, you can buy 1 pound of fish for 2 pounds of pineapples. In other countries, you can buy 1 pound of fish for 1.5 pounds of pineapples. These facts indicate that

Accepted Answer

A)  Pineland has a comparative advantage, relative to other countries, in producing fish.
B)  other countries have a comparative advantage, relative to Pineland, in producing pineapples.
C)  the price of pineapples in Pineland exceeds the world price of pineapples.
D)  if Pineland were to allow trade, it would import fish.E) C) and D)
F) None of the above

Question 17

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular 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) A) and D)
F) A) and B)

Question 18

Scenario 9-2
For a small country called Boxland, the equation of the domestic demand curve for cardboard is

QD=200−2PQ ^ { D } = 200 - 2 PQD=200−2P  ,
where  QDQ ^ { D }QD  represents the domestic quantity of cardboard demanded, in tons, and  PPP  represents the price of a ton of cardboard.For Boxland, the equation of the domestic supply curve for cardboard is

QS=−60+3PQ ^ { S } = - 60 + 3 PQS=−60+3P  ,
where  QsQ ^ { s }Qs  represents the domestic quantity of cardboard supplied, in tons, and  PPP  again represents the price of a ton of cardboard.
-Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard

Accepted Answer

A)  benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00.
B)  benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50.
C)  benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50.
D)  harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. E) B) and D)
F) C) and D)

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia

Accepted Answer

A)  may prompt Russian farmers to invoke the infant-industry argument.
B)  increase the consumer surplus of Russian buyers of wheat.
C)  decrease the total surplus of the Russian people.
D)  All of the above are correct.E) B) and C)
F) None of the above

Exam 9: Application: International Trade

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

Correct Answer
verified

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good,

Correct Answer
verified

What is the fundamental basis for trade among nations?

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

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

Correct Answer
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Figure 9-5 -Refer to Figure 9-5. With trade, consumer surplus is

Correct Answer
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A common argument in favor of restricting international trade in good x is based on the premise that

Correct Answer
verified

Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?

Correct Answer
verified

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Correct Answer
verified

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

Correct Answer
verified

The nation of Pineland forbids international trade. In Pineland, you can buy 1 pound of fish for 2 pounds of pineapples. In other countries, you can buy 1 pound of fish for 1.5 pounds of pineapples. These facts indicate that

Correct Answer
verified

In September 2009, President Obama

Correct Answer
verified

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. With trade, Vietnam will

Correct Answer
verified

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

Correct Answer
verified

Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia

Correct Answer
verified

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct Answer
verified

When a country allows trade and becomes an importer of a good,

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

Countries that restrict foreign trade are likely to

Correct Answer
verified

Exam 9: Application: International Trade

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

Correct AnswerverifiedShow Answer

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good,

Correct AnswerverifiedShow Answer

What is the fundamental basis for trade among nations?

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5. With trade, consumer surplus is

Correct AnswerverifiedShow Answer

A common argument in favor of restricting international trade in good x is based on the premise that

Correct AnswerverifiedShow Answer

Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?

Correct AnswerverifiedShow Answer

The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The nation of Pineland forbids international trade. In Pineland, you can buy 1 pound of fish for 2 pounds of pineapples. In other countries, you can buy 1 pound of fish for 1.5 pounds of pineapples. These facts indicate that

Correct AnswerverifiedShow Answer

In September 2009, President Obama

Correct AnswerverifiedShow Answer

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. With trade, Vietnam will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia

Correct AnswerverifiedShow Answer

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an importer of a good,

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

Countries that restrict foreign trade are likely to

Correct AnswerverifiedShow Answer

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