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Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. The deadweight loss caused by the tariff is A) $6,000. B) $9,000. C) $12,000. D) $15,000. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. The deadweight loss caused by the tariff is


A) $6,000.
B) $9,000.
C) $12,000.
D) $15,000.

E) C) and D)
F) B) and C)

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A

Figure 9-17 Figure 9-17 -Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus A) increases by $1,200 and producer surplus increases by $600. B) increases by $1,200 and producer surplus decreases by $600. C) decreases by $1,350 and producer surplus increases by $450. D) decreases by $1,350 and producer surplus decreases by $450. -Refer to Figure 9-17. When the country moves from no trade to free trade, consumer surplus


A) increases by $1,200 and producer surplus increases by $600.
B) increases by $1,200 and producer surplus decreases by $600.
C) decreases by $1,350 and producer surplus increases by $450.
D) decreases by $1,350 and producer surplus decreases by $450.

E) None of the above
F) A) and D)

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Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It increases consumer surplus, decreases producer surplus, and increases total surplus. B) It increases consumer surplus, increases producer surplus, and increases total surplus. C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. D) It decreases consumer surplus, increases producer surplus, and increases total surplus. where Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It increases consumer surplus, decreases producer surplus, and increases total surplus. B) It increases consumer surplus, increases producer surplus, and increases total surplus. C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. D) It decreases consumer surplus, increases producer surplus, and increases total surplus. Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It increases consumer surplus, decreases producer surplus, and increases total surplus. B) It increases consumer surplus, increases producer surplus, and increases total surplus. C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. D) It decreases consumer surplus, increases producer surplus, and increases total surplus. represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It increases consumer surplus, decreases producer surplus, and increases total surplus. B) It increases consumer surplus, increases producer surplus, and increases total surplus. C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. D) It decreases consumer surplus, increases producer surplus, and increases total surplus. where Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It increases consumer surplus, decreases producer surplus, and increases total surplus. B) It increases consumer surplus, increases producer surplus, and increases total surplus. C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. D) It decreases consumer surplus, increases producer surplus, and increases total surplus. Scenario 9-2 ā€¢ For a small country called Boxland, the equation of the domestic demand curve for cardboard is where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. ā€¢ For Boxland, the equation of the domestic supply curve for cardboard is where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? A) It increases consumer surplus, decreases producer surplus, and increases total surplus. B) It increases consumer surplus, increases producer surplus, and increases total surplus. C) It increases consumer surplus, decreases producer surplus, and decreases total surplus. D) It decreases consumer surplus, increases producer surplus, and increases total surplus. represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?


A) It increases consumer surplus, decreases producer surplus, and increases total surplus.
B) It increases consumer surplus, increases producer surplus, and increases total surplus.
C) It increases consumer surplus, decreases producer surplus, and decreases total surplus.
D) It decreases consumer surplus, increases producer surplus, and increases total surplus.

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

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List five arguments given to support trade restrictions.

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The jobs argument; the nationa...

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


A) both domestic producers and domestic consumers become better off.
B) domestic producers become better off, and domestic consumers become worse off.
C) domestic producers become worse off, and domestic consumers become better off.
D) both domestic producers and domestic consumers become worse off.

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

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If the Korean steel industry subsidizes the steel that it sells to the United States, the


A) United States should protect its domestic steel industry from this unfair competition.
B) harm done to U.S. steel producers from this unfair competition exceeds the gain to U.S. consumers of cheap Korean steel.
C) harm done to U.S. steel producers is less than the benefit that accrues to U.S. consumers of steel.
D) United States should subsidize the products it sells to Korea.

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

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Suppose Brazil has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil


A) will import almonds.
B) will export almonds.
C) will either import almonds or export almonds, but it is not clear from the given information.
D) would have nothing to gain either from exporting or importing almonds.

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

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The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began


A) exporting steel and the price per ton in Russia remained at $650.
B) exporting steel and the price per ton in Russia increased to $1,000.
C) importing steel and the price per ton in Russia remained at $650.
D) importing steel and the price per ton in Russia increased to $1,000.

E) All of the above
F) B) and C)

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The small-economy assumption is necessary to analyze the gains and losses from international trade.

A) True
B) False

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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.

A) True
B) False

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Figure 9-12 Figure 9-12 -Refer to Figure 9-12. With trade allowed, this country A) exports 400 units of the good. B) exports 800 units of the good. C) imports 400 units of the good. D) exports 1,600 units of the good. -Refer to Figure 9-12. With trade allowed, this country


A) exports 400 units of the good.
B) exports 800 units of the good.
C) imports 400 units of the good.
D) exports 1,600 units of the good.

E) All of the above
F) B) and C)

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When the nation of Mooseland first permitted trade with other nations, domestic producers of sugar experienceda decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million We can conclude that


A) Mooseland became an exporter of sugar.
B) the overall economic well-being of participants in the sugar market in Mooseland fell because of trade.
C) consumer surplus in Mooseland increased by $7 million.
D) the opening of trade caused the domestic demand curve for sugar in Mooseland to shift to the right.

E) B) and C)
F) All of the above

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Which of the following tools and concepts is useful in the analysis of international trade?


A) total surplus
B) domestic supply
C) equilibrium price
D) All of the above are correct.

E) B) and D)
F) B) and C)

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D

Figure 9-5 The figure illustrates the market for tricycles in a country. Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. The horizontal line at the world price of tricycles represents the A) demand for tricycles from the rest of the world. B) supply of tricycles from the rest of the world. C) level of inefficiency in the domestic market caused by trade. D) surplus in the domestic tricycle market. -Refer to Figure 9-5. The horizontal line at the world price of tricycles represents the


A) demand for tricycles from the rest of the world.
B) supply of tricycles from the rest of the world.
C) level of inefficiency in the domestic market caused by trade.
D) surplus in the domestic tricycle market.

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

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B

Chile is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Chile imposes a $7 tariff on chips. Which of the following outcomes is possible?


A) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips decreases; and the quantity of chips imported by Chile decreases.
B) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases.
C) The price of chips in Chile increases to $19; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases.
D) The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile does not change.

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

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William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

A) True
B) False

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When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

A) True
B) False

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Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. -Refer to Figure 9-18. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $5, then the policy change results in a A) $25 decrease in consumer surplus. B) $20 increase in consumer surplus. C) $25 decrease in producer surplus. D) $20 increase in producer surplus. -Refer to Figure 9-18. Suppose Isoland changes from a no-trade policy to a policy that allows international trade. If the world price of peaches is $5, then the policy change results in a


A) $25 decrease in consumer surplus.
B) $20 increase in consumer surplus.
C) $25 decrease in producer surplus.
D) $20 increase in producer surplus.

E) None of the above
F) A) and D)

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Figure 9-17 Figure 9-17 -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff A) decreases imports of the good by 16 units and increases domestic production of the good by 8 units. B) decreases imports of the good by 16 units and increases domestic production of the good by 16 units. C) decreases imports of the good by 24 units and increases domestic production of the good by 8 units. D) decreases imports of the good by 24 units and increases domestic production of the good by 24 units. -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff


A) decreases imports of the good by 16 units and increases domestic production of the good by 8 units.
B) decreases imports of the good by 16 units and increases domestic production of the good by 16 units.
C) decreases imports of the good by 24 units and increases domestic production of the good by 8 units.
D) decreases imports of the good by 24 units and increases domestic production of the good by 24 units.

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

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Figure 9-15 Figure 9-15 -Refer to Figure 9-15. Consumer surplus with the tariff is A) A. B) A + B. C) A + C + G. D) A + B + C + D +E + F. -Refer to Figure 9-15. Consumer surplus with the tariff is


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

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

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