Question 1

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 2

Figure 9-21
The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-21. With free trade, domestic production and domestic consumption, respectively, are

Accepted Answer

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

Question 3

Figure 9-15 
-Refer to Figure 9-15. The amount of government revenue created by the tariff is

Accepted Answer

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

Question 4

If the demand curve and the supply curve for a good are straight lines, then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

Accepted Answer

A)   the area of one triangle.
B)   the area of one rectangle.
C)   the combined areas of two different triangles.
D)   the combined areas of two different rectangles.E) A) and C)
F) A) and B)

Question 5

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

Accepted Answer

A)   will export pecans assuming trade is allowed) .
B)   will import pecans assuming trade is allowed) .
C)   has a comparative advantage in producing pecans.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 6

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)   the losses of the domestic producers of coal exceed the gains of the domestic consumers of coal.
B)   the losses of the domestic consumers of coal exceed the gains of the domestic producers of coal.
C)   the gains of the domestic producers of coal exceed the losses of the domestic consumers of coal.
D)   the gains of the domestic consumers of coal exceed the losses of the domestic producers of coal.E) A) and B)
F) A) and C)

Question 8

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

Accepted Answer

A) True 
 B)False

Question 9

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Accepted Answer

A)   export copper, since that country has a comparative advantage in copper.
B)   import copper, since that country has a comparative advantage in copper.
C)   neither export nor import copper, since that country cannot gain from trade.
D)   neither export nor import copper, since that country already produces copper at a low cost compared to other countries.E) A) and D)
F) A) and C)

Question 10

Figure 9-20
The figure illustrates the market for rice in Vietnam. 
-Refer to Figure 9-20. Given that Vietnam is a small country, it is apparent from the figure that

Accepted Answer

A)   Vietnam will export rice if trade is allowed.
B)   Vietnam will import rice if trade is allowed.
C)   Vietnam has nothing to gain either by importing or exporting rice.
D)   the world price will fall if Vietnam begins to allow its citizens to trade with other countries.E) All of the above
F) A) and B)

Question 11

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 much is total surplus?

Accepted Answer

With trade...

Question 12

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. Without trade, consumer surplus is

Accepted Answer

A)   $423.
B)   $845.
C)   $1,690.
D)   $3,380.E) A) and D)
F) B) and C)

Question 13

When the nation of Isoland opens up its steel market to international trade, that change

Accepted Answer

A)   creates winners and losers, regardless of whether Isoland ends up exporting or importing steel.
B)   results in a decrease in total surplus, regardless of whether Isoland ends up exporting or importing steel.
C)   creates winners, but no losers, if Isoland ends up exporting steel.
D)   creates losers, but no winners, if Isoland ends up importing steel.E) All of the above
F) A) and B)

Question 14

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. Relative to the no-trade situation, trade with the rest of the world results in

Accepted Answer

A)   Guatemalan consumers paying a higher price for coffee.
B)   a decrease in producer surplus in Guatemala.
C)   a decrease in total surplus in Guatemala.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 15

Both tariffs and import quotas

Accepted Answer

A)   increase the quantity of imports and raise the domestic price of the good.
B)   increase the quantity of imports and lower the domestic price of the good.
C)   decrease the quantity of imports and raise the domestic price of the good.
D)   decrease the quantity of imports and lower the domestic price of the good.E) B) and D)
F) None of the above

Question 16

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. When trade in coffee is allowed, producer surplus in Guatemala

Accepted Answer

A)   increases by the area B + D.
B)   increases by the area B + D + G.
C)   decreases by the area C + F.
D)   decreases by the area G.E) A) and B)
F) A) and C)

Question 17

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

Accepted Answer

A)   if it works consumer surplus will decline.
B)   if it works producer surplus falls.
C)   if it fails the country faces a choice between two bad options.
D)   if it fails total surplus will increase.E) A) and B)
F) A) and C)

Question 18

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

Accepted Answer

A)   domestic producers of the good become better off.
B)   domestic consumers of the good become worse off.
C)   the gains of the winners exceed the losses of the losers.
D)   All of the above are correct.E) C) and D)
F) A) and C)

Question 19

A tariff is a

Accepted Answer

A)   limit on how much of a good can be exported.
B)   limit on how much of a good can be imported.
C)   tax on an exported good.
D)   tax on an imported good.E) B) and C)
F) B) and D)

Question 20

Suppose Brazil has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Accepted Answer

A)   will import almonds.
B)   will export almonds.
C)   will either import almonds or export almonds, but it is not clear from the given information.
D)   would have nothing to gain either from exporting or importing almonds.E) None of the above
F) All of the above

Exam 9: Application: International Trade

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. Relative to the no-trade situation, trade with the rest of the world results in

Correct Answer
verified

Both tariffs and import quotas

Correct Answer
verified

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, consumer surplus is

Correct Answer
verified

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. When trade in coffee is allowed, producer surplus in Guatemala

Correct Answer
verified

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. With free trade, domestic production and domestic consumption, respectively, are

Correct Answer
verified

When the nation of Isoland opens up its steel market to international trade, that change

Correct Answer
verified

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. Given that Vietnam is a small country, it is apparent from the figure that

Correct Answer
verified

Suppose Brazil has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Correct Answer
verified

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

Correct Answer
verified

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

Correct Answer
verified

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Correct Answer
verified

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

Correct Answer
verified

A tariff is a

Correct Answer
verified

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

Correct Answer
verified

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 9-15 -Refer to Figure 9-15. The amount of government revenue created by the tariff is

Correct Answer
verified

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

Correct Answer
verified

If the demand curve and the supply curve for a good are straight lines, then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

Correct Answer
verified

Correct Answer
verified
With trade...
View Answer

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. Relative to the no-trade situation, trade with the rest of the world results in

Correct AnswerverifiedShow Answer

Both tariffs and import quotas

Correct AnswerverifiedShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, consumer surplus is

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. When trade in coffee is allowed, producer surplus in Guatemala

Correct AnswerverifiedShow Answer

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. With free trade, domestic production and domestic consumption, respectively, are

Correct AnswerverifiedShow Answer

When the nation of Isoland opens up its steel market to international trade, that change

Correct AnswerverifiedShow Answer

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20. Given that Vietnam is a small country, it is apparent from the figure that

Correct AnswerverifiedShow Answer

Suppose Brazil has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

Correct AnswerverifiedShow Answer

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

Correct AnswerverifiedShow Answer

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

Correct AnswerverifiedShow Answer

A tariff is a

Correct AnswerverifiedShow Answer

By comparing the world price of pecans to India's domestic price of pecans, we can determine whether India

Correct AnswerverifiedShow 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 9-15 -Refer to Figure 9-15. The amount of government revenue created by the tariff is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the demand curve and the supply curve for a good are straight lines, then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade...View AnswerShow Answer

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Correct AnswerverifiedShow Answer

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With trade...
View Answer

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