Question 1

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Accepted Answer

A) True 
 B)False

Question 2

Figure 9-17 
-Refer to Figure 9-17. Without trade, consumer surplus is

Accepted Answer

A)   $400 and producer surplus is $200.
B)   $400 and producer surplus is $800.
C)   $1,600 and producer surplus is $200.
D)   $1,600 and producer surplus is $800.E) None of the above
F) A) and C)

Question 3

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

Accepted Answer

A)   57 percent said free international trade helped the economy.
B)   26 percent said free international trade helped the economy.
C)   30 percent said free international trade hurt the economy.
D)   16 percent said free international trade hurt the economy.E) None of the above
F) B) and C)

Question 4

When a country that imports a particular good imposes a tariff on that good,

Accepted Answer

A)   consumer surplus increases and total surplus increases in the market for that good.
B)   consumer surplus increases and total surplus decreases in the market for that good.
C)   consumer surplus decreases and total surplus increases in the market for that good.
D)   consumer surplus decreases and total surplus decreases in the market for that good.E) C) and D)
F) B) and D)

Question 5

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 deadweight loss created by the tariff is represented by the area

Accepted Answer

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

Question 6

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 7

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 B)
F) B) and D)

Question 8

Figure 9-28
The following diagram shows the domestic demand and domestic supply curves in a market. 
-Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Accepted Answer

With trade...

Question 9

If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Figure 9-10. The figure applies to Mexico and the good is rifles. 
-Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Accepted Answer

A)   the number of rifles bought and sold in Mexico.
B)   the number of rifles produced in Mexico.
C)   the number of rifles exported by Mexico.
D)   the number of rifles imported by Mexico.E) C) and D)
F) B) and C)

Question 12

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 allowed, this country

Accepted Answer

A)   exports 5 units of the good.
B)   imports 5 units of the good.
C)   exports 13 units of the good.
D)   imports 13 units of the good.E) A) and B)
F) All of the above

Question 13

Figure 9-15 
-Refer to Figure 9-15. For the saddle market, area B represents

Accepted Answer

A)   government's revenue from the tariff.
B)   the deadweight loss of the tariff.
C)   the increase in producer surplus, relative to the free-trade situation, as a result of the tariff.
D)   None of the above is correct.E) A) and C)
F) C) and D)

Question 14

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Accepted Answer

Without trade, consu...

Question 15

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. In the absence of trade, total surplus in the Guatemalan coffee market amounts to

Accepted Answer

A)   750.
B)   1,100.
C)   1,514.
D)   1,650.E) A) and C)
F) None of the above

Question 16

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. Producer surplus with free trade is

Accepted Answer

A)   $200.
B)   $450.
C)   $630.
D)   $1,080E) A) and B)
F) A) and C)

Question 17

Figure 9-12 
-Refer to Figure 9-12. Consumer surplus after trade is

Accepted Answer

A)   $6,400.
B)   $9,600.
C)   $12,800.
D)   $14,400.E) A) and D)
F) None of the above

Question 18

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 domestic consumers demand and how many units will domestic producers supply?

Accepted Answer

With trade and a tariff, domes...

Question 19

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is

Accepted Answer

A)   $30.
B)   $90.
C)   $110.
D)   $140.E) None of the above
F) B) and C)

Question 20

When a country that imported 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 C)
F) B) and C)

Exam 9: Application: International Trade

Correct Answer
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With trade and a tariff, domes...
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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. -Refer to Figure 9-23. With free trade allowed, this country

Correct Answer
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If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.

Correct Answer
verified

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 deadweight loss created by the tariff is represented by the area

Correct Answer
verified

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is

Correct Answer
verified

The infant-industry argument

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

Figure 9-12 -Refer to Figure 9-12. Consumer surplus after trade is

Correct Answer
verified

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, total surplus in the Guatemalan coffee market amounts to

Correct Answer
verified

Figure 9-17 -Refer to Figure 9-17. Without trade, consumer surplus is

Correct Answer
verified

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

Correct Answer
verified

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Correct Answer
verified

When a country that imports a particular good imposes a tariff on that good,

Correct Answer
verified

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

Correct Answer
verified

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Correct Answer
verified
With trade...
View Answer

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

Correct Answer
verified

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Correct Answer
verified

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Correct Answer
verified
Without trade, consu...
View Answer

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. Producer surplus with free trade is

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area B represents

Correct Answer
verified

Exam 9: Application: International Trade

Correct AnswerverifiedWith trade and a tariff, domes...View AnswerShow Answer

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 allowed, this country

Correct AnswerverifiedShow Answer

If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.

Correct AnswerverifiedShow Answer

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 deadweight loss created by the tariff is represented by the area

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is

Correct AnswerverifiedShow Answer

The infant-industry argument

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

Figure 9-12 -Refer to Figure 9-12. Consumer surplus after trade is

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, total surplus in the Guatemalan coffee market amounts to

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. Without trade, consumer surplus is

Correct AnswerverifiedShow Answer

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

Correct AnswerverifiedShow Answer

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Correct AnswerverifiedShow Answer

When a country that imports a particular good imposes a tariff on that good,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Correct AnswerverifiedWith trade...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Correct AnswerverifiedShow Answer

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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Correct AnswerverifiedWithout trade, consu...View AnswerShow Answer

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. Producer surplus with free trade is

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area B represents

Correct AnswerverifiedShow Answer

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With trade and a tariff, domes...
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With trade...
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Without trade, consu...
View Answer

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Correct Answer
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