Question 1

Figure 9-4. The domestic country is Nicaragua. 
-Refer to Figure 9-4. Consumer surplus in Nicaragua without trade is

Accepted Answer

A)  $375.
B)  $2,000.
C)  $2,250.
D)  $8,700.E) B) and C)
F) A) and B)

Question 2

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

Question 3

Figure 9-24
The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The amount of revenue collected by the government from the tariff is

Accepted Answer

A)  $50.
B)  $100.
C)  $150.
D)  $200.E) None of the above
F) B) and C) B

Question 4

Most economists support the infant-industry argument because it is so easy to implement in practice.

Accepted Answer

A) True 
 B)False

Question 5

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

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) C) and D)
F) A) and D)

Question 6

Using the graph, assume that the government imposes a $1 tariff on hammers. Answer the following questions given this information.  
a.What is the domestic price and quantity demanded of hammers after the tariff is imposed?
b.What is the quantity of hammers imported before the tariff?
c.What is the quantity of hammers imported after the tariff?
d.What would be the amount of consumer surplus before the tariff?
e.What would be the amount of consumer surplus after the tariff?
f. What would be the amount of producer surplus before the tariff?
g. What would be the amount of producer surplus after the tariff?
h. What would be the amount of government revenue because of the tariff?
i. What would be the total amount of deadweight loss due to the tariff?

Accepted Answer

a.$6, 84
b.66
c.44
d...

Question 7

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so

Accepted Answer

A)  because it is impossible to analyze the gains and losses from international trade without making this assumption.
B)  because then we can assume that world prices of goods are unaffected by that country's participation in international trade.
C)  in order to rule out the possibility of tariffs or quotas.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 8

The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Accepted Answer

A) True 
 B)False  True

Question 9

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 10

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 much is the deadweight loss caused by the tariff?

Accepted Answer

The deadweight loss of the tariff is $100.

Question 11

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) A) and B)
F) A) and C)

Question 12

Figure 9-13 
-Refer to Figure 9-13. Consumer surplus before trade is

Accepted Answer

A)  $1,600.
B)  $2,400.
C)  $3,200.
D)  $3,600.E) None of the above
F) A) and B)

Question 13

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) C) and D)

Question 14

The principle of comparative advantage asserts that

Accepted Answer

A)  not all countries can benefit from trade with other countries.
B)  the world price of a good will prevail in all countries, regardless of whether those countries allow international trade in that good.
C)  countries can become better off by exporting goods, but they cannot become better off by importing goods.
D)  countries can become better off by specializing in what they do best.E) None of the above
F) A) and D)

Question 15

​Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,

Accepted Answer

A)  ​Mexico as a whole is better off, since the tariff increases employment and production in the domestic chocolate industry.
B)  ​Mexico as a whole is better off, since the tariff results in tax revenue for the Mexican government.
C)  ​Mexico as a whole is worse off, since producer surplus and consumer surplus both decrease.
D)  ​Mexico as a whole is worse off, since the increase in producer surplus is smaller than the drop in consumer surplus plus tariff revenues.E) All of the above
F) A) and B)

Question 16

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

Accepted Answer

A)  domestic producers become better off, and domestic consumers become worse off.
B)  domestic producers become worse off, and domestic consumers become better off.
C)  domestic consumers become better off, but the effect on the well-being of domestic producers is ambiguous.
D)  domestic producers become worse off, but the effect on the well-being of domestic consumers is ambiguous.E) C) and D)
F) A) and B)

Question 17

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Accepted Answer

A) True 
 B)False

Question 18

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. Without trade, producer surplus is

Accepted Answer

A)  $423.
B)  $845.
C)  $1,690.
D)  $3,380.E) A) and B)
F) A) and C)

Question 19

The price of sugar that prevails in international markets is called the

Accepted Answer

A)  export price of sugar.
B)  import price of sugar.
C)  comparative-advantage price of sugar.
D)  world price of sugar.E) B) and D)
F) C) and D)

Question 20

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without 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, the equilibrium price of coffee in Guatemala is

Correct Answer
verified

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The amount of revenue collected by the government from the tariff is

Correct Answer
verified
B

Most economists support the infant-industry argument because it is so easy to implement in practice.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
a.$6, 84
b.66
c.44
d...
View Answer

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so

Correct Answer
verified

The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Correct Answer
verified
True

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.

Correct Answer
verified

Correct Answer
verified
The deadweight loss of the tariff is $100.

Which of the following statements is true?

Correct Answer
verified

Figure 9-13 -Refer to Figure 9-13. Consumer surplus before trade is

Correct Answer
verified

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 Answer
verified

The principle of comparative advantage asserts that

Correct Answer
verified

Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,

Correct Answer
verified

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

Correct Answer
verified

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Correct Answer
verified

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, producer surplus is

Correct Answer
verified

The price of sugar that prevails in international markets is called the

Correct Answer
verified

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. Consumer surplus in Nicaragua without 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, the equilibrium price of coffee in Guatemala is

Correct AnswerverifiedShow Answer

Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The amount of revenue collected by the government from the tariff is

Correct AnswerverifiedB

Most economists support the infant-industry argument because it is so easy to implement in practice.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answerverifieda.$6, 84b.66c.44d...View AnswerShow Answer

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so

Correct AnswerverifiedShow Answer

The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Correct AnswerverifiedTrue

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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe deadweight loss of the tariff is $100.

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. Consumer surplus before trade is

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

The principle of comparative advantage asserts that

Correct AnswerverifiedShow Answer

​Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a country allows international trade and becomes an importer of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off.

Correct AnswerverifiedShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, producer surplus is

Correct AnswerverifiedShow Answer

The price of sugar that prevails in international markets is called the

Correct AnswerverifiedShow Answer

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods, but it is not correct for a nation that imports manufactured goods.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.$6, 84
b.66
c.44
d...
View Answer

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified
The deadweight loss of the tariff is $100.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified