Question 1

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Accepted Answer

A)   consumer surplus equals producer surplus in the Canadian soybean market.
B)   total surplus exceeds consumer surplus in the Canadian soybean market.
C)   Canada permits international trade in soybeans.
D)   Canada forbids international trade in soybeans.E) C) and D)
F) A) and B)

Question 2

Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests

Accepted Answer

A)   Russia has a comparative advantage over Brazil in producing coffee, and Ireland has a comparative advantage over Russia in producing sunflower seeds.
B)   Russia has a comparative advantage over Ireland in producing sunflower seeds, and Brazil has a comparative advantage over Russia in producing coffee.
C)   Russia has an absolute advantage over Ireland in producing sunflower seeds, and Brazil has an absolute advantage over Russia in producing coffee.
D)   Russia has an absolute advantage over Brazil in producing coffee, and Ireland has an absolute advantage over Russia in producing sunflower seeds.E) A) and B)
F) C) and D)

Question 3

Figure 9-17 
-Refer to Figure 9-17. With trade and a tariff, total surplus is

Accepted Answer

A)   $1,224.
B)   $1,416.
C)   $1,512.
D)   $1,704.E) A) and B)
F) All of the above

Question 4

Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland.
 
-Refer to Figure 9-18. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $5, then the policy change results in

Accepted Answer

A)   a decrease in consumer surplus.
B)   an increase in producer surplus.
C)   an increase in total surplus.
D)   All of the above are correct.E) C) and D)
F) All of the above

Question 5

Figure 9-13 
-Refer to Figure 9-13. Producer surplus before trade is

Accepted Answer

A)   $3,600.
B)   $4,400.
C)   $5,200.
D)   $6,600.E) A) and B)
F) All of the above

Question 6

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) All of the above
F) None of the above

Question 7

When a country allows trade and becomes an exporter 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) A) and C)

Question 8

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Accepted Answer

A)   Incomes of domestic citizens increase, and tricycles are a normal good.
B)   Within this country, the price of a substitute for tricycles decreases.
C)   Within this country, the price of a complement to tricycles decreases.
D)   Wages increase for domestic workers who produce tricycles.E) A) and B)
F) B) and C)

Question 9

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Bearing in mind that this country is "small," what would happen if there were a decrease in the price of tricycle helmets within this country, given that tricycles and tricycle helmets are complements?

Accepted Answer

A)   The quantity of tricycles that this country imports would increase.
B)   The quantity of tricycles that this country imports would decrease, but the country would still be an importer of tricycles.
C)   This country would switch from being an importer of tricycles to an exporter of tricycles.
D)   The domestic price without trade would move closer to the world price.E) None of the above
F) B) and D)

Question 10

When the nation of Mooseland first permitted trade with other nations, domestic producers of sugar experienceda decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million We can conclude that

Accepted Answer

A)   Mooseland became an exporter of sugar.
B)   the overall economic well-being of participants in the sugar market in Mooseland fell because of trade.
C)   consumer surplus in Mooseland increased by $7 million.
D)   the opening of trade caused the domestic demand curve for sugar in Mooseland to shift to the right.E) A) and B)
F) A) and C)

Question 11

Figure 9-4. The domestic country is Nicaragua. 
-Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

Accepted Answer

A)   $625, and this is an increase in total surplus.
B)   $750, and this is an increase in total surplus.
C)   $625, and this is a decrease in total surplus.
D)   $750, and this is a decrease in total surplus.E) B) and D)
F) A) and D)

Question 12

A common argument in favor of restricting trade

Accepted Answer

A)   concerns the strategy of bargaining.
B)   is that efforts should be made to get new industries started.
C)   emphasizes the belief that all countries should play by the same rules.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 13

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)   All of the above are correct.E) All of the above
F) B) and D)

Question 14

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that

Accepted Answer

A)   both consumer surplus and producer surplus increase.
B)   consumer surplus increases and producer surplus decreases.
C)   consumer surplus decreases and producer surplus increases.
D)   both consumer surplus and producer surplus decrease.E) A) and D)
F) C) and D)

Question 15

Workers displaced by trade eventually find jobs in

Accepted Answer

A)   another country.
B)   the government sector.
C)   the industries in which the country has a comparative advantage.
D)   a different company in the same industry.E) C) and D)
F) All of the above

Question 16

Congresswoman Gaga represents a state in which several firms manufacture furniture. She wants to impose tariffs on all imported furniture. Which of the following is the least likely consequence of such tariffs?

Accepted Answer

A)   Domestic furniture buyers will lose consumer surplus, have less variety, and will pay higher prices.
B)   Domestic furniture producers will gain producer surplus.
C)   Domestic furniture producers will have a higher rate of technological advance.
D)   Domestic furniture producers will have more market power.E) A) and B)
F) A) and C)

Question 17

Figure 9-27
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 9-27. Suppose the country imposes a $5 per unit tariff. If the country allows trade with a tariff, how much is the deadweight loss caused by the tariff?

Accepted Answer

The deadwe...

Question 18

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The amount of revenue collected by the government from the tariff is

Accepted Answer

A)   $50.
B)   $100.
C)   $150.
D)   $200.E) A) and C)
F) None of the above

Question 19

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Accepted Answer

A) True 
 B)False

Question 20

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 many units will be imported?

Accepted Answer

With trade and a tar...

Exam 9: Application: International Trade

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

Correct Answer
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Figure 9-13 -Refer to Figure 9-13. Producer surplus before trade is

Correct Answer
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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Correct Answer
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When a country allows trade and becomes an exporter of a good,

Correct Answer
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Correct Answer
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The deadwe...
View 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 Answer
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Correct Answer
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Workers displaced by trade eventually find jobs in

Correct Answer
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Correct Answer
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With trade and a tar...
View Answer

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The amount of revenue collected by the government from the tariff is

Correct Answer
verified

When the nation of Mooseland first permitted trade with other nations, domestic producers of sugar experienceda decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million We can conclude that

Correct Answer
verified

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Correct Answer
verified

Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests

Correct Answer
verified

The North American Free Trade Agreement

Correct Answer
verified

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Correct Answer
verified

Congresswoman Gaga represents a state in which several firms manufacture furniture. She wants to impose tariffs on all imported furniture. Which of the following is the least likely consequence of such tariffs?

Correct Answer
verified

A common argument in favor of restricting trade

Correct Answer
verified

Figure 9-17 -Refer to Figure 9-17. With trade and a tariff, total surplus is

Correct Answer
verified

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that

Correct Answer
verified

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," what would happen if there were a decrease in the price of tricycle helmets within this country, given that tricycles and tricycle helmets are complements?

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. Producer surplus before trade is

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe deadwe...View AnswerShow 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

Correct AnswerverifiedShow Answer

Workers displaced by trade eventually find jobs in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade and a tar...View AnswerShow Answer

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The amount of revenue collected by the government from the tariff is

Correct AnswerverifiedShow Answer

When the nation of Mooseland first permitted trade with other nations, domestic producers of sugar experienceda decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million We can conclude that

Correct AnswerverifiedShow Answer

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Correct AnswerverifiedShow Answer

Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests

Correct AnswerverifiedShow Answer

The North American Free Trade Agreement

Correct AnswerverifiedShow Answer

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Correct AnswerverifiedShow Answer

Congresswoman Gaga represents a state in which several firms manufacture furniture. She wants to impose tariffs on all imported furniture. Which of the following is the least likely consequence of such tariffs?

Correct AnswerverifiedShow Answer

A common argument in favor of restricting trade

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. With trade and a tariff, total surplus is

Correct AnswerverifiedShow Answer

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," what would happen if there were a decrease in the price of tricycle helmets within this country, given that tricycles and tricycle helmets are complements?

Correct AnswerverifiedShow Answer

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The deadwe...
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With trade and a tar...
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