Question 1

Figure 9-15 3 - Q1. B)  Q3 - Q2. C)  Q4 - Q1. D)  Q4 - Q2." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-15.With the tariff,the quantity of saddles imported is

Accepted Answer

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

Question 2

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

Accepted Answer

A)   Canada has a comparative advantage over other countries and Canada will export wheat.
B)   Canada has a comparative advantage over other countries and Canada will import wheat.
C)   other countries have a comparative advantage over Canada and Canada will export wheat.
D)   other countries have a comparative advantage over Canada and Canada will import wheat.E) B) and D)
F) A) and D)

Question 3

Figure 9-2 
-Refer to Figure 9-2.Without trade,consumer surplus is

Accepted Answer

A)   $210.
B)   $245.
C)   $455.
D)   $490.E) A) and B)
F) A) and C)

Question 4

The nation of Aquilonia has decided to end its policy of not trading with the rest of the world.When it ends its trade restrictions,it discovers that it is importing rice,exporting steel,and neither importing nor exporting TVs.We can conclude that producer surplus in Aquilonia is now

Accepted Answer

A)   higher in the steel market,lower in the rice market,and unchanged in the TV market.
B)   higher in the rice and steel markets,and unchanged in the TV market.
C)   lower in the rice and TV markets,and higher in the steel market.
D)   lower in the rice and steel markets,and the same in the TV market.E) A) and B)
F) C) and D)

Question 5

Figure 9-9 
-Refer to Figure 9-9.Total surplus in this market after trade is

Accepted Answer

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

Question 6

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) None of the above

Question 7

In September 2009,China took steps toward imposing tariffs on American exports of

Accepted Answer

A)   automotive products and chicken in response to President Obama's decision to impose tariffs on toys imported from China.
B)   airplanes and beef in response to President Obama's decision to impose tariffs on toys imported from China.
C)   automotive products and chicken in response to President Obama's decision to impose tariffs on tires imported from China.
D)   airplanes and beef in response to President Obama's decision to impose tariffs on tires imported from China.E) C) and D)
F) A) and B)

Question 8

The greater the elasticities of supply and demand,the smaller are the gains from trade.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)   domestic producers gain and domestic consumers lose.
B)   domestic producers lose and domestic consumers gain.
C)   domestic producers and domestic consumers both gain.
D)   domestic producers and domestic consumers both lose.E) B) and D)
F) None of the above

Question 10

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Accepted Answer

A unilateral approach is when a country ...

Question 11

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. 0Q0. B)  Producer surplus with trade = (1/2) P1Q1. C)  Producer surplus with trade = (1/2) P1Q2. D)  None of the above is correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-7.Which of the following is a valid equation for Welsh producer surplus with trade?

Accepted Answer

A)   Producer surplus with trade = (1/2) P0Q0.
B)   Producer surplus with trade = (1/2) P1Q1.
C)   Producer surplus with trade = (1/2) P1Q2.
D)   None of the above is correct.E) None of the above
F) A) and B)

Question 12

Figure 9-13 
-Refer to Figure 9-13.The price and domestic quantity demanded after trade are

Accepted Answer

A)   $8 and 300.
B)   $8 and 900.
C)   $14 and 900.
D)   $14 and 600.E) All of the above
F) A) and C)

Question 13

Suppose Ecuador imposes a tariff on imported bananas.If the increase in producer surplus is $50 million,the reduction in consumer surplus is $150 million,and the deadweight loss of the tariff is $30 million,then the tariff generates $130 million in revenue for the government.

Accepted Answer

A) True 
 B)False

Question 14

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

Accepted Answer

A) True 
 B)False

Question 15

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. 0) (P1 - P0) . B)  Consumer surplus with trade = (1/2) (Q0) (P3 - P0) . C)  Consumer surplus with trade = (1/2) (Q1) (P3 - P1) . D)  None of the above is correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-7.Which of the following is a valid equation for Welsh consumer surplus with trade?

Accepted Answer

A)   Consumer surplus with trade = (1/2) (Q0) (P1 - P0) .
B)   Consumer surplus with trade = (1/2) (Q0) (P3 - P0) .
C)   Consumer surplus with trade = (1/2) (Q1) (P3 - P1) .
D)   None of the above is correct.E) All of the above
F) B) and D)

Question 16

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

Accepted Answer

A)   Total surplus in the domestic country falls.
B)   Producer surplus in the domestic country increases.
C)   The domestic country experiences a deadweight loss.
D)   Revenue is raised for the domestic government.E) None of the above
F) All of the above

Question 17

Figure 9-5 
-Refer to Figure 9-5.Total surplus with trade exceeds total surplus without trade by

Accepted Answer

A)   $60.
B)   $75.
C)   $135.
D)   $210.E) All of the above
F) B) and C)

Question 18

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. 
-Refer to Figure 9-16.Government revenue raised by the tariff is represented by the area

Accepted Answer

A)   E.
B)   B + E.
C)   D + E + F.
D)   B + D + E + F.E) A) and B)
F) All of the above

Question 19

Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade,thus reducing the gains from trade.

Accepted Answer

A) True 
 B)False

Question 20

Suppose the Ivory Coast,a small country,imports wheat at the world price of $4 per bushel.If the Ivory Coast imposes a tariff of $1 per bushel on imported wheat,then,other things equal,the price of wheat in Ivory Coast will increase,but by less than $1.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Suppose Ecuador imposes a tariff on imported bananas.If the increase in producer surplus is $50 million,the reduction in consumer surplus is $150 million,and the deadweight loss of the tariff is $30 million,then the tariff generates $130 million in revenue for the government.

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Figure 9-13 -Refer to Figure 9-13.The price and domestic quantity demanded after trade are

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Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade,thus reducing the gains from trade.

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Figure 9-5 -Refer to Figure 9-5.Total surplus with trade exceeds total surplus without trade by

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Figure 9-9 -Refer to Figure 9-9.Total surplus in this market after trade is

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In September 2009,China took steps toward imposing tariffs on American exports of

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Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. -Refer to Figure 9-16.Government revenue raised by the tariff is represented by the area

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Suppose the Ivory Coast,a small country,imports wheat at the world price of $4 per bushel.If the Ivory Coast imposes a tariff of $1 per bushel on imported wheat,then,other things equal,the price of wheat in Ivory Coast will increase,but by less than $1.

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

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The greater the elasticities of supply and demand,the smaller are the gains from trade.

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The nation of Aquilonia has decided to end its policy of not trading with the rest of the world.When it ends its trade restrictions,it discovers that it is importing rice,exporting steel,and neither importing nor exporting TVs.We can conclude that producer surplus in Aquilonia is now

Correct AnswerverifiedShow Answer

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

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Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

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Figure 9-2 -Refer to Figure 9-2.Without trade,consumer surplus is

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

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Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.Which of the following is a valid equation for Welsh consumer surplus with trade?

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Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.Which of the following is a valid equation for Welsh producer surplus with trade?

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Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Correct AnswerverifiedA unilateral approach is when a country ...View AnswerShow Answer

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

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Figure 9-15 -Refer to Figure 9-15.With the tariff,the quantity of saddles imported is

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A unilateral approach is when a country ...
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