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List five arguments given to support trade restrictions.

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The jobs argument; the nationa...

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When a country moves away from a free trade position and imposes a tariff on imports, it causes


A) a decrease in total surplus in the market.
B) a decrease in producer surplus in the market.
C) an increase in consumer surplus in the market.
D) a decrease in revenue to the government.

E) B) and D)
F) B) and C)

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Figure 9-17 Figure 9-17 -Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus A) increases by $1,200 and producer surplus increases by $600. B) increases by $1,200 and producer surplus decreases by $600. C) decreases by $1,350 and producer surplus increases by $450. D) decreases by $1,350 and producer surplus decreases by $450. -Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus


A) increases by $1,200 and producer surplus increases by $600.
B) increases by $1,200 and producer surplus decreases by $600.
C) decreases by $1,350 and producer surplus increases by $450.
D) decreases by $1,350 and producer surplus decreases by $450.

E) None of the above
F) C) and D)

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Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 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 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. -Refer to Figure 9-16. The tariff


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) A) and B)

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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. 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 are consumer surplus and producer surplus? -Refer to Figure 9-29. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus and producer surplus?

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With trade and a tar...

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Suppose Iran imposes a tariff on lumber. For the tariff to have any effect, it must be the case that


A) Iran is an exporter of lumber.
B) the domestic quantity of lumber supplied exceeds the domestic quantity of lumber demanded at the world price without the tariff.
C) the world price without the tariff is less than the price of lumber without trade.
D) the world price without the tariff is greater than the price of lumber without trade.

E) B) and D)
F) A) and B)

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Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade, the domestic price and domestic quantity supplied are A) $90 and 10. B) $90 and 18. C) $120 and 5. D) $120 and 18. -Refer to Figure 9-23. With free trade, the domestic price and domestic quantity supplied are


A) $90 and 10.
B) $90 and 18.
C) $120 and 5.
D) $120 and 18.

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

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Figure 9-9 Figure 9-9 -Refer to Figure 9-9. Consumer surplus in this market before trade is A) A. B) A + B. C) A + B + D. D) C. -Refer to Figure 9-9. Consumer surplus in this market before trade is


A) A.
B) A + B.
C) A + B + D.
D) C.

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

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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. 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. With free trade, total surplus is A) $500. B) $800. C) $1,000. D) $1,300. -Refer to Figure 9-24. With free trade, total surplus is


A) $500.
B) $800.
C) $1,000.
D) $1,300.

E) None of the above
F) All of the above

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The small-economy assumption is necessary to analyze the gains and losses from international trade.

A) True
B) False

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When the nation of Duxembourg allows trade and becomes an importer of software,


A) residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises.
B) residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls.
C) residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises.
D) residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls.

E) None of the above
F) B) and C)

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Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. With free trade, total surplus is A) $30,000. B) $66,000. C) $96,000. D) $120,000. -Refer to Figure 9-22. With free trade, total surplus is


A) $30,000.
B) $66,000.
C) $96,000.
D) $120,000.

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

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A tariff is a tax placed on


A) an exported good and it lowers the domestic price of the good below the world price.
B) an exported good and it ensures that the domestic price of the good stays the same as the world price.
C) an imported good and it lowers the domestic price of the good below the world price.
D) an imported good and it raises the domestic price of the good above the world price.

E) None of the above
F) B) and D)

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Suppose France subsidizes French wheat farmers, while Germany offers no subsidy to German wheat farmers. As a result of the French subsidy, sales of French wheat to Germany


A) may prompt German farmers to invoke the unfair-competition argument.
B) increase the consumer surplus of German buyers of wheat.
C) increase the total surplus of the German people.
D) All of the above are correct.

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

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Figure 9-13 Figure 9-13 -Refer to Figure 9-13. The price and domestic quantity demanded after trade are A) $8 and 300. B) $8 and 900. C) $14 and 900. D) $14 and 600. -Refer to Figure 9-13. The price and domestic quantity demanded after trade are


A) $8 and 300.
B) $8 and 900.
C) $14 and 900.
D) $14 and 600.

E) All of the above
F) C) and D)

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Japan imposes a $300 per ton tariff on imported steel, raising the price charged in Japan to $1,000. Using only this information, which of the following statements is correct?


A) The world price for steel is $300.
B) The world price for steel is $700.
C) The world price for steel is $1,000.
D) The world price for steel is $1,300.

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

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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. 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 are consumer surplus, producer surplus, tariff revenue, and total surplus? -Refer to Figure 9-27. Suppose the country imposes a $5 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus?

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With trade and a tariff, consu...

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A tax on an imported good is called a _______

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William and Jamal live in the country of Dumexia. As a result of Dumexia's legalization of international trade in bananas, William becomes better off and Jamal becomes worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

A) True
B) False

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Figure 9-26 The following diagram shows the domestic demand and domestic supply curves in a market. 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, how many units will domestic consumers demand, and how many units will domestic producers produce? -Refer to Figure 9-26. Suppose the world price in this market is $7. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers produce?

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Domestic consumers w...

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