Question 1

Suppose a country begins to allow international trade in steel. Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel?

Accepted Answer

A)   The sum of consumer surplus and producer surplus for domestic traders of steel increases.
B)   The quantity of steel demanded by domestic consumers increases.
C)   Domestic producers of steel receive a higher price for steel.
D)   The losses of the losers exceed the gains of the winners.E) B) and C)
F) All of the above

Question 2

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, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?

Accepted Answer

A)   It increases consumer surplus, decreases producer surplus, and increases total surplus.
B)   It increases consumer surplus, increases producer surplus, and increases total surplus.
C)   It increases consumer surplus, decreases producer surplus, and decreases total surplus.
D)   It decreases consumer surplus, increases producer surplus, and increases total surplus.E) B) and C)
F) A) and D)

Question 3

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Accepted Answer

A)   cannot experience significant gains or losses by trading with other countries.
B)   cannot have a significant comparative advantage over other countries.
C)   cannot affect world prices by trading with other countries.
D)   All of the above are correct.E) B) and D)
F) All of the above

Question 4

Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Accepted Answer

Brazil wil...

Question 5

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

Accepted Answer

A) True 
 B)False

Question 6

Figure 9-15 
-Refer to Figure 9-15. Consumer surplus with trade and without a tariff is

Accepted Answer

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

Question 7

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 $60. Then Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)   $145.
B)   $160.
C)   $210.
D)   $320.E) A) and B)
F) A) and C)

Question 8

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

Question 9

Figure 9-26
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-26. Suppose the world price in this market is $7. 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 10

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

Question 11

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Accepted Answer

A) True 
 B)False

Question 12

Figure 9-25
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. 
-Refer to Figure 9-25. With free trade, total surplus is

Accepted Answer

A)   $800.
B)   $1,200.
C)   $1,600.
D)   $2,000.E) C) and D)
F) B) and D)

Question 13

"Trade raises the economic well­being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Accepted Answer

A) True 
 B)False

Question 14

Figure 9-13 
-Refer to Figure 9-13. Consumer surplus after trade is

Accepted Answer

A)   $3,600.
B)   $5,400.
C)   $7,200.
D)   $8,100.E) All of the above
F) B) and C)

Question 15

The price of sugar that prevails in international markets is called the

Accepted Answer

A)   export price of sugar.
B)   import price of sugar.
C)   comparative-advantage price of sugar.
D)   world price of sugar.E) B) and D)
F) A) and B)

Question 16

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

Question 17

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Accepted Answer

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

Question 18

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

Accepted Answer

A) True 
 B)False

Question 19

The infant-industry argument

Accepted Answer

A)   is based on the belief that protecting industries when they are young will pay off later.
B)   is based on the belief that protecting industries producing goods and services for infants is necessary if a country is to have healthy children.
C)   has the support of most economists.
D)   is an argument that is advanced by advocates of free trade.E) A) and C)
F) All of the above

Question 20

Figure 9-3. The domestic country is China. 
-Refer to Figure 9-3. Relative to a no-trade situation, which of the following comes with trade?

Accepted Answer

A)   Consumer surplus increases by $1,800 and producer surplus increases by $1,600.
B)   Consumer surplus decreases by $1,000 and producer surplus increases by $1,500.
C)   Consumer surplus decreases by $1,000 and producer surplus increases by $1,750.
D)   Total surplus increases by $400.E) A) and B)
F) A) and C)

Exam 9: Application: International Trade

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Correct Answer
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Correct Answer
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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. Suppose the world price in this market is $7. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Correct Answer
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The countr...
View Answer

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

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

Correct Answer
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Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. With free trade, total surplus is

Correct Answer
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Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is

Correct Answer
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The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Correct Answer
verified

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

Correct Answer
verified

Suppose a country begins to allow international trade in steel. Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel?

Correct Answer
verified

Correct Answer
verified

The price of sugar that prevails in international markets is called the

Correct Answer
verified

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Correct Answer
verified

"Trade raises the economic wellbeing of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Correct Answer
verified

The infant-industry argument

Correct Answer
verified

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

Correct Answer
verified

Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Correct Answer
verified
Brazil wil...
View Answer

Figure 9-15 -Refer to Figure 9-15. Consumer surplus with trade and without a tariff is

Correct Answer
verified

What is the fundamental basis for trade among nations?

Correct Answer
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Figure 9-3. The domestic country is China. -Refer to Figure 9-3. Relative to a no-trade situation, which of the following comes with trade?

Correct Answer
verified

Exam 9: Application: International Trade

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-26. Suppose the world price in this market is $7. 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

For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience.

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

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. With free trade, total surplus is

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is

Correct AnswerverifiedShow Answer

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose a country begins to allow international trade in steel. Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The price of sugar that prevails in international markets is called the

Correct AnswerverifiedShow Answer

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country

Correct AnswerverifiedShow Answer

"Trade raises the economic well­being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Correct AnswerverifiedShow Answer

The infant-industry argument

Correct AnswerverifiedShow Answer

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

Correct AnswerverifiedShow Answer

Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Correct AnswerverifiedBrazil wil...View AnswerShow Answer

Figure 9-15 -Refer to Figure 9-15. Consumer surplus with trade and without a tariff is

Correct AnswerverifiedShow Answer

What is the fundamental basis for trade among nations?

Correct AnswerverifiedShow Answer

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. Relative to a no-trade situation, which of the following comes with trade?

Correct AnswerverifiedShow Answer

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

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

"Trade raises the economic wellbeing of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Brazil wil...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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