Question 1

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 B)
F) B) and C)

Question 2

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular 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) None of the above
F) A) and B)

Question 3

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Without trade, producer surplus amounts to

Accepted Answer

A)  $810.
B)  $1,620.
C)  $3,240.
D)  $6,480.E) A) and B)
F) A) and C)

Question 4

Figure 9-17 
-Refer to Figure 9-17. With free 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) A) and D)
F) A) and C)

Question 5

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?

Accepted Answer

Domestic consumers w...

Question 6

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. With trade, producer surplus is

Accepted Answer

A)  $500.
B)  $1,000.
C)  $1,500.
D)  $2,000.E) A) and C)
F) A) and D)

Question 7

Suppose that the US market for soybeans is not open to international trade. Currently, soybeans sell for $6.00 per bushel in the US and the world price for soybeans is $8.00 per bushel. This information implies that

Accepted Answer

A)  ​the US has an absolute advantage in the production of soybeans and if the market opens to international trade, the US would export soybeans.
B)  the US does not have an absolute advantage in the production of soybeans and if the market opens to international trade, the US would import soybeans.
C)  ​the US has a comparative advantage in the production of soybeans and if the market opens to international trade, the US would export soybeans.
D)  ​the US does not have a comparative advantage in the production of soybeans and if the market opens to international trade, the US would import soybeans.E) A) and B)
F) None of the above

Question 8

Import quotas and tariffs both cause the quantity of imports to fall.

Accepted Answer

A) True 
 B)False

Question 9

When a government imposes a tariff on a product, the domestic price will equal the world price.

Accepted Answer

A) True 
 B)False

Question 10

Refer to Figure 9-15. Producer surplus with the tariff is

Accepted Answer

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

Question 11

Trade decisions are based on the principle of absolute advantage.

Accepted Answer

A) True 
 B)False

Question 12

In a 2007 New York Times article Paul Krugman wrote that

Accepted Answer

A)  the infant-industry argument works well as an argument in favor of protection for the U.S. steel industry.
B)  the negative effects of third world exports on U.S. wages may be increasing.
C)  there are social gains to the U.S. from free trade.
D)  high wage countries account for a growing share of U.S. imports of manufactured goods.E) B) and C)
F) A) and D)

Question 13

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 allowed, this country

Accepted Answer

A)  exports 200 units of the good.
B)  exports 400 units of the good.
C)  imports 400 units of the good.
D)  exports 800 units of the good.E) B) and C)
F) None of the above

Question 14

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Accepted Answer

A)  better off, its producers of fish will become better off, and on balance the citizens of Denmark will become better off.
B)  worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off.
C)  Worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off.
D)  better off, its producers of fish will become worse off, and on balance the citizens of Denmark will become better off.E) B) and D)
F) B) and C)

Question 15

Which of the following is the most accurate statement?

Accepted Answer

A)  The one argument for restricting trade that almost all economists accept as valid is the infant-industry argument.
B)  Almost all economists insist that it is never appropriate to protect "key" industries, even when there are legitimate concerns about national security.
C)  The idea that one nation might want to threaten another nation with a trade restriction is associated with the protection-as-a-bargaining-chip argument for restricting trade.
D)  The protection-as-a-bargaining-chip argument for restricting trade is also known as the infant-industry argument.E) None of the above
F) B) and C)

Question 16

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. With trade, this country

Accepted Answer

A)  exports 160 tricycles.
B)  exports 320 tricycles.
C)  imports 160 tricycles.
D)  imports 320 tricycles.E) B) and D)
F) B) and C)

Question 17

Figure 9-25
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. 
-Refer to Figure 9-25. With free trade and a $5 per unit tariff, the country

Accepted Answer

A)  exports 20 units of the good.
B)  imports 20 units of the good.
C)  exports 40 units of the good.
D)  imports 40 units of the good.E) A) and B)
F) A) and C)

Question 18

The history of the textile industry raises important questions for economic policy.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-25
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. 
-Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Accepted Answer

A)  $25.
B)  $50.
C)  $75.
D)  $100.E) A) and B)
F) B) and D)

Question 20

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, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

The countr...

Exam 9: Application: International Trade

The history of the textile industry raises important questions for economic policy.

Correct Answer
verified

Refer to Figure 9-15. Producer surplus with the tariff is

Correct Answer
verified

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, this country

Correct Answer
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Suppose that the US market for soybeans is not open to international trade. Currently, soybeans sell for $6.00 per bushel in the US and the world price for soybeans is $8.00 per bushel. This information implies that

Correct Answer
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The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Correct Answer
verified

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, producer surplus is

Correct Answer
verified

Correct Answer
verified
Domestic consumers w...
View Answer

Trade decisions are based on the principle of absolute advantage.

Correct Answer
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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, producer surplus amounts to

Correct Answer
verified

Figure 9-17 -Refer to Figure 9-17. With free trade, consumer surplus is

Correct Answer
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Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Correct Answer
verified

Which of the following is the most accurate statement?

Correct Answer
verified

When a government imposes a tariff on a product, the domestic price will equal the world price.

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, will the country import or export this good, and how many units will be imported/exported?

Correct Answer
verified
The countr...
View Answer

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. With free trade and a $5 per unit tariff, the country

Correct Answer
verified

In a 2007 New York Times article Paul Krugman wrote that

Correct Answer
verified

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good,

Correct Answer
verified

Import quotas and tariffs both cause the quantity of imports to fall.

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 allowed, this country

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

Exam 9: Application: International Trade

The history of the textile industry raises important questions for economic policy.

Correct AnswerverifiedShow Answer

Refer to Figure 9-15. Producer surplus with the tariff is

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, this country

Correct AnswerverifiedShow Answer

Suppose that the US market for soybeans is not open to international trade. Currently, soybeans sell for $6.00 per bushel in the US and the world price for soybeans is $8.00 per bushel. This information implies that

Correct AnswerverifiedShow Answer

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, producer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedDomestic consumers w...View AnswerShow Answer

Trade decisions are based on the principle of absolute advantage.

Correct AnswerverifiedShow Answer

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Without trade, producer surplus amounts to

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. With free trade, consumer surplus is

Correct AnswerverifiedShow Answer

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The deadweight loss caused by the tariff is

Correct AnswerverifiedShow Answer

Which of the following is the most accurate statement?

Correct AnswerverifiedShow Answer

When a government imposes a tariff on a product, the domestic price will equal the world price.

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, will the country import or export this good, and how many units will be imported/exported?

Correct AnswerverifiedThe countr...View AnswerShow Answer

Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. With free trade and a $5 per unit tariff, the country

Correct AnswerverifiedShow Answer

In a 2007 New York Times article Paul Krugman wrote that

Correct AnswerverifiedShow Answer

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good,

Correct AnswerverifiedShow Answer

Import quotas and tariffs both cause the quantity of imports to fall.

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 allowed, this country

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

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Domestic consumers w...
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The countr...
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