Question 1

Assume,for the U.S.,that the domestic price of beef without international trade is lower than the world price of beef.This suggests that,in the production of beef,

Accepted Answer

A)  the U.S.has a comparative advantage over other countries and the U.S.will export beef.
B)  the U.S.has a comparative advantage over other countries and the U.S.will import beef.
C)  other countries have a comparative advantage over the U.S.and the U.S.will export beef.
D)  other countries have a comparative advantage over the U.S.and the U.S.will import beef.E) A) and C)
F) None of the above

Question 2

Suppose the United States exports cars to France and imports cheese from Switzerland.This situation suggests that

Accepted Answer

A)  the United States has a comparative advantage relative to Switzerland in producing cheese, and France has a comparative advantage relative to the United States in producing cars.
B)  the United States has a comparative advantage relative to France in producing cars, and Switzerland has a comparative advantage relative to the United States in producing cheese.
C)  the United States has an absolute advantage relative to Switzerland in producing cheese, and France has an absolute advantage relative to the United States in producing cars.
D)  the United States has an absolute advantage relative to France in producing cars, and Switzerland has an absolute advantage relative to the United States in producing cheese.E) A) and D)
F) B) and D)

Question 3

Figure 9-8
 
-Refer to Figure 9-8.Consumer surplus in this market before trade is

Accepted Answer

A)  a.
B)  A + B.
C)  A + B + D.
D)  C.E) None of the above
F) C) and D)

Question 4

Trade raises the economic well-being of a nation in the sense that

Accepted Answer

A)  the gains of the winners exceed the losses of the losers.
B)  everyone in an economy gains from trade.
C)  since countries can choose what products to trade, they will pick those products that are most beneficial to society.
D)  the nation joins the international community when it begins to engage in trade.E) C) and D)
F) None of the above

Question 5

Assume,for Canada,that the domestic price of steel without international trade is higher than the world price of steel.This suggests that,in the production of steel,

Accepted Answer

A)  Canada has a comparative advantage over other countries and Canada will import steel.
B)  Canada has a comparative advantage over other countries and Canada will export steel.
C)  other countries have a comparative advantage over Canada and Canada will import steel.
D)  other countries have a comparative advantage over Canada and Canada will export steel.E) None of the above
F) C) and D)

Question 6

What are the arguments in favor of trade restrictions,and what are the counterarguments? According to most economists,do any of these arguments really justify trade restrictions? Explain.

Accepted Answer

Arguments mentioned in the text include ...

Question 7

Figure 9-4
 
-Refer to Figure 9-4.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 wagons to an exporter of wagons?

Accepted Answer

A)  Incomes of domestic citizens increase, and wagons are a normal good.
B)  Within this country, the price of a substitute for wagons decreases.
C)  Within this country, the price of a complement to wagons decreases.
D)  Wages increase for domestic workers who produce wagons.E) B) and D)
F) None of the above

Question 8

Figure 9-14
 
-Refer to Figure 9-14.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Accepted Answer

A)  Q₂ - Q₁.
B)  Q₃ - Q₂.
C)  Q₄ - Q₃.
D)  Q₄ - Q₃ + Q₂ - Q₁.E) B) and C)
F) A) and D)

Question 9

Figure 9-6. The figure applies to the nation of Wales and the good is cheese.
 
-Refer to Figure 9-6.With trade,Wales

Accepted Answer

A)  imports Q₂ - Q₁ units of cheese.
B)  exports Q₂ - Q₁ units of cheese.
C)  imports Q₂ - Q₀ units of cheese.
D)  exports Q₂ - Q₀ units of cheese.E) All of the above
F) A) and C)

Question 10

Figure 9-5
 
-Refer to Figure 9-5.The size of the tariff on carnations is

Accepted Answer

A)  $8 per dozen.
B)  $6 per dozen.
C)  $4 per dozen.
D)  $2 per dozen.E) A) and D)
F) B) and C)

Question 11

Trade decisions are based on the principle of absolute advantage.

Accepted Answer

A) True 
 B)False

Question 12

Scenario 9-1
The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market.
-Refer to Scenario 9-1.If trade in tomatoes is allowed,the price of tomatoes in the United States

Accepted Answer

A)  will be greater than the world price.
B)  will be equal to the world price.
C)  will be less than the world price.
D)  could be greater than, equal to, or less than the world price; this cannot be determined.E) None of the above
F) All of the above

Question 13

Figure 9-12
 
-Refer to Figure 9-12.Producer surplus before trade is

Accepted Answer

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

Question 14

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

Accepted Answer

A)  Mexico is an exporter of lumber.
B)  the domestic quantity supplied exceeds the domestic quantity 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 C)
F) B) and D)

Question 15

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

Question 16

Figure 9-14
 
-Refer to Figure 9-14.With the tariff,the quantity of saddles imported is

Accepted Answer

A)  Q₃ - Q₁.
B)  Q₃ - Q₂.
C)  Q₄ - Q₁.
D)  Q₄ - Q₂.E) C) and D)
F) None of the above

Question 17

Figure 9-4
 
-Refer to Figure 9-4.With trade,total surplus is

Accepted Answer

A)  $245.
B)  $367.50.
C)  $607.50.
D)  $687.50.E) A) and B)
F) A) and C)

Question 18

Figure 9-2. The domestic country is China.
 
-Refer to Figure 9-2.With no international trade,

Accepted Answer

A)  the equilibrium price is $12 and the equilibrium quantity is 300.
B)  the equilibrium price is $16 and the equilibrium quantity is 200.
C)  the equilibrium price is $16 and the equilibrium quantity is 300.
D)  the equilibrium price is $16 and the equilibrium quantity is 450.E) B) and C)
F) A) and B)

Question 19

When,in our analysis of the gains and losses of 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) None of the above
F) B) and C)

Question 20

Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners.
 
-Refer to Figure 9-9.The area bounded by the points (Q₀,P₀) ,(Q₂,P₁) ,and (Q₁,P₁) represents

Accepted Answer

A)  Kenya's gains from trade.
B)  the amount by which Kenya's gain in producer surplus exceeds its loss in consumer surplus due to trade.
C)  Kenya's loss in total surplus due to trade.
D)  All of the above are correct.E) A) and C)
F) None of the above

Exam 9: Application: International Trade

Figure 9-2. The domestic country is China. -Refer to Figure 9-2.With no international trade,

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.The size of the tariff on carnations is

Correct AnswerverifiedShow Answer

Figure 9-8 -Refer to Figure 9-8.Consumer surplus in this market before trade is

Correct AnswerverifiedShow Answer

Figure 9-14 -Refer to Figure 9-14.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Correct AnswerverifiedShow Answer

Assume,for Canada,that the domestic price of steel without international trade is higher than the world price of steel.This suggests that,in the production of steel,

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12.Producer surplus before trade is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-6. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-6.With trade,Wales

Correct AnswerverifiedShow Answer

What are the arguments in favor of trade restrictions,and what are the counterarguments? According to most economists,do any of these arguments really justify trade restrictions? Explain.

Correct AnswerverifiedArguments mentioned in the text include ...View AnswerShow Answer

Suppose the United States exports cars to France and imports cheese from Switzerland.This situation suggests that

Correct AnswerverifiedShow Answer

Assume,for the U.S.,that the domestic price of beef without international trade is lower than the world price of beef.This suggests that,in the production of beef,

Correct AnswerverifiedShow Answer

Trade raises the economic well-being of a nation in the sense that

Correct AnswerverifiedShow Answer

Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,the price of tomatoes in the United States

Correct AnswerverifiedShow Answer

Figure 9-4 -Refer to Figure 9-4.With trade,total surplus is

Correct AnswerverifiedShow Answer

Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.The area bounded by the points (Q₀,P₀) ,(Q₂,P₁) ,and (Q₁,P₁) represents

Correct AnswerverifiedShow Answer

Figure 9-14 -Refer to Figure 9-14.With the tariff,the quantity of saddles imported is

Correct AnswerverifiedShow Answer

Figure 9-4 -Refer to Figure 9-4.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 wagons to an exporter of wagons?

Correct AnswerverifiedShow Answer

Trade decisions are based on the principle of absolute advantage.

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 Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Arguments mentioned in the text include ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified