Question 1

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 increase, and this will cause consumer surplus to decrease.
B)  will decrease, and this will cause consumer surplus to increase.
C)  will be unaffected, and consumer surplus will be unaffected as well.
D)  could increase or decrease or be unaffected; this cannot be determined.E) A) and C)
F) B) and C)

Question 2

Which of the following is not a commonly-advanced argument for trade restrictions?

Accepted Answer

A)  the jobs argument
B)  the national-security argument
C)  the infant-industry argument
D)  the efficiency argumentE) None of the above
F) All of the above

Question 3

Figure 9-15. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.
 
-Refer to Figure 9-15.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 D)
F) B) and C)

Question 4

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

Accepted Answer

A)  $245.
B)  $362.50.
C)  $367.50.
D)  $607.50.E) B) and C)
F) A) and D)

Question 5

Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners.
 
-Refer to Figure 9-9.Kenya's gains from trade are represented by the area that is bounded by the points

Accepted Answer

A)  (0, P₀) , (Q₀, P₀) , (Q₂, P₁) , and (0, P₁) .
B)  (0, P₁) , (0, P₂) , (Q₀, P₀) , and (Q₁, P₁) .
C)  (Q₀, P₀) , (Q₂, P₁) , and (Q₁, P₁) .
D)  (0, P₀) , (0, P₂) , and (Q₀, P₀) .E) All of the above
F) A) and B)

Question 6

Which of the following statements is true?

Accepted Answer

A)  Free trade benefits a country when it exports but harms it when it imports.
B)  "Voluntary" limits on Canadian exports of hogs are better for the United States than U.S.tariffs placed on Canadian hog exports.
C)  Tariffs and quotas differ in that tariffs work like a tax and therefore impose deadweight losses, whereas quotas do not impose deadweight losses.
D)  Free trade benefits a country both when it exports and when it imports.E) C) and D)
F) All of the above

Question 7

Figure 9-4
 
-Refer to Figure 9-4.Without trade,producer surplus amounts to

Accepted Answer

A)  $210.
B)  $245.
C)  $450.
D)  $455.E) A) and C)
F) A) and B)

Question 8

Figure 9-11
 
-Refer to Figure 9-11.With trade,the domestic price and domestic quantity demanded are

Accepted Answer

A)  $18 and 400.
B)  $18 and 800.
C)  $14 and 400.
D)  $14 and 600.E) All of the above
F) C) and D)

Question 9

Figure 9-10
 
-Refer to Figure 9-10.Consumer surplus in this market after trade is

Accepted Answer

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

Question 10

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

Question 11

Figure 9-14
 
-Refer to Figure 9-14.With the tariff,the domestic price and domestic quantity demanded are

Accepted Answer

A)  P₁ and Q₁.
B)  P₁ and Q₄.
C)  P₂ and Q₂.
D)  P₂ and Q₃.E) None of the above
F) A) and B)

Question 12

A tariff on a product

Accepted Answer

A)  enhances the economic well-being of the domestic economy.
B)  increases the domestic quantity supplied.
C)  increases the domestic quantity demanded.
D)  results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.E) B) and C)
F) A) and B)

Question 13

Figure 9-12
 
-Refer to Figure 9-12.With trade,the 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)  imports 600 units of the good.E) C) and D)
F) All of the above

Question 14

The world price of a pound of T-bone steak is $9.00.Before Guatemala allowed trade in beef,the price of a pound of T-bone steak there was $12.00.Once Guatemala began allowing trade in beef with other countries,Guatemala began

Accepted Answer

A)  exporting T-bone steak and the price per pound in Guatemala remained at $12.00.
B)  exporting T-bone steak and the price per pound in Guatemala decreased to $9.00.
C)  importing T-bone steak and the price per pound in Guatemala remained at $12.00.
D)  importing T-bone steak and the price per pound in Guatemala decreased to $9.00.E) All of the above
F) A) and D)

Question 15

Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars.
 
-Refer to Figure 9-7.The country for which the figure is drawn

Accepted Answer

A)  has a comparative advantage relative to other countries in the production of cars and it will export cars.
B)  has a comparative advantage relative to other countries in the production of cars and it will import cars.
C)  has a comparative disadvantage relative to other countries in the production of cars and it will export cars.
D)  has a comparative disadvantage relative to other countries in the production of cars and it will import cars.E) A) and C)
F) B) and D)

Question 16

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,U.S.producers of tomatoes

Accepted Answer

A)  will be better off.
B)  will be worse off.
C)  will be unaffected.
D)  will experience a decrease in their collective producer surplus.E) B) and C)
F) A) and B)

Question 17

Which of the following assertions is not correct about the multilateral approach to free trade?

Accepted Answer

A)  The multilateral approach has the potential to result in freer trade than does the unilateral approach.
B)  The multilateral approach may have a political advantage over the unilateral approach.
C)  The multilateral approach is simpler than the unilateral approach.
D)  NAFTA and GATT are both multilateral approaches to free trade.E) C) and D)
F) A) and D)

Question 18

The before-trade price of fish in Greece is $3.00 per pound.The world price of fish is $5.00 per pound.Greece is a price-taker in the fish market.If Greece 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 Greece will become better off.
B)  worse off, its producers of fish will become better off, and on balance the citizens of Greece will become better off.
C)  worse off, its producers of fish will become better off, and on balance the citizens of Greece will become worse off.
D)  better off, its producers of fish will become worse off, and on balance the citizens of Greece will become worse off.E) A) and D)
F) All of the above

Question 19

Figure 9-11
 
-Refer to Figure 9-11.Consumer surplus before trade is

Accepted Answer

A)  $1,600.
B)  $2,400.
C)  $3,200.
D)  $3,600.E) B) and D)
F) C) and D)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Figure 9-15. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-15.Government revenue raised by the tariff is represented by the area

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

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The before-trade price of fish in Greece is $3.00 per pound.The world price of fish is $5.00 per pound.Greece is a price-taker in the fish market.If Greece begins to allow trade in fish,its consumers of fish will become

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Which of the following is not a commonly-advanced argument for trade restrictions?

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Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.Kenya's gains from trade are represented by the area that is bounded by the points

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Figure 9-4 -Refer to Figure 9-4.Without trade,producer surplus amounts to

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A tariff on a product

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The world price of a pound of T-bone steak is $9.00.Before Guatemala allowed trade in beef,the price of a pound of T-bone steak there was $12.00.Once Guatemala began allowing trade in beef with other countries,Guatemala began

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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

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Figure 9-14 -Refer to Figure 9-14.With the tariff,the domestic price and domestic quantity demanded are

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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,U.S.producers of tomatoes

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

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Which of the following statements is true?

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Figure 9-11 -Refer to Figure 9-11.With trade,the domestic price and domestic quantity demanded are

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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 9-11 -Refer to Figure 9-11.Consumer surplus before trade is

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Figure 9-12 -Refer to Figure 9-12.With trade,the country

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Figure 9-10 -Refer to Figure 9-10.Consumer surplus in this market after trade is

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Which of the following assertions is not correct about the multilateral approach to free trade?

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Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-7.The country for which the figure is drawn

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