Question 1

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. Before the tariff is imposed, this country

Accepted Answer

A)  imports 200 roses.
B)  imports 400 roses.
C)  exports 200 roses.
D)  exports 400 roses.E) A) and D)
F) A) and C)

Question 2

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 D)
F) A) and B)

Question 3

Figure 9-15 
-Refer to Figure 9-15. Producer surplus with trade and without a tariff is

Accepted Answer

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

Question 4

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

Accepted Answer

A)  A.
B)  A + B.
C)  B + C + D.
D)  C.E) B) and D)
F) None of the above

Question 5

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

Accepted Answer

A)  Vietnam has a comparative advantage over other countries and Vietnam will import textiles.
B)  Vietnam has a comparative advantage over other countries and Vietnam will export textiles.
C)  other countries have a comparative advantage over Vietnam and Vietnam will import textiles.
D)  other countries have a comparative advantage over Vietnam and Vietnam will export textiles.E) All of the above
F) C) and D)

Question 6

If a tariff is placed on watches, the price of both domestic and imported watches will rise by the amount of the tariff.

Accepted Answer

A) True 
 B)False

Question 7

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

Question 8

Figure 9-13 
-Refer to Figure 9-13. With trade, producer surplus is

Accepted Answer

A)  $900.
B)  $1,100.
C)  $1,500.
D)  $2,000.E) B) and D)
F) None of the above

Question 9

Which of the following is the most accurate statement?

Accepted Answer

A)  Protection is necessary in order for young industries to grow up and be successful.
B)  Protection is not necessary for an industry to grow.
C)  Protection is necessary because if young industries are not protected, they may suffer losses.
D)  Protection may not always be necessary for infant industries, but it has proven to be useful in most cases.E) B) and C)
F) All of the above

Question 10

Figure 9-10. The figure applies to Mexico and the good is rifles. 1 and Q1. B) P1 and Q2. C) P2 and Q2. D) P0 and Q0." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

Accepted Answer

A)  P1 and Q1.
B)  P1 and Q2.
C)  P2 and Q2.
D)  P0 and Q0.E) A) and B)
F) A) and C)

Question 11

If a country is an exporter of a good, then it must be the case that

Accepted Answer

A)  the world price is less than its domestic price.
B)  consumer surplus is higher than a no trade situation.
C)  the world price is greater than its domestic price.
D)  they used an infant-industry argument to protect its producers.E) None of the above
F) C) and D)

Question 12

Figure 9-23
The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. 
-Refer to Figure 9-23. With free trade, the domestic price and domestic quantity demanded are

Accepted Answer

A)  $90 and 5.
B)  $90 and 10.
C)  $120 and 5.
D)  $120 and 18.E) None of the above
F) B) and C)

Question 13

GATT is an example of a successful unilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Question 14

Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip. Suppose Denmark removes the tariff. Which of the following outcomes is not possible?

Accepted Answer

A)  More Danish-produced chips are sold in Denmark.
B)  More foreign-produced chips are sold in Denmark.
C)  Danish consumers of chips become better off.
D)  Total surplus in the Danish chip market increases.E) B) and C)
F) All of the above

Question 15

For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

Accepted Answer

A) True 
 B)False

Question 16

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Accepted Answer

Brazil wil...

Question 17

A common argument in favor of restricting international trade in good x is based on the premise that

Accepted Answer

A)  international trade reduces total surplus in countries that export good x.
B)  international trade reduces total surplus in countries that import good x.
C)  international trade is desirable only when countries with different domestic supplies of natural resources play by different rules when trading with one another.
D)  trade restrictions can be useful when one country bargains with its trading partners.E) None of the above
F) All of the above

Question 18

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. With free trade, consumer surplus is

Accepted Answer

A)  $400 and producer surplus is $100.
B)  $400 and producer surplus is $400.
C)  $900 and producer surplus is $100.
D)  $900 and producer surplus is $400.E) C) and D)
F) A) and C)

Question 19

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. This country

Accepted Answer

A)  has a comparative advantage in calculators.
B)  should export calculators.
C)  is a price taker in the world economy.
D)  All of the above are correct.E) A) and D)
F) A) and C)

Question 20

Countries that restrict foreign trade are likely to

Accepted Answer

A)  forgo the additional surplus that trade allows, but will probably enjoy economies of scale.
B)  forgo the additional surplus that trade allows, but will be compensated by a higher rate of technological change.
C)  forgo the additional surplus that trade allows, but will have a lower rate of unemployment.
D)  have more firms with domestic market power.E) None of the above
F) C) and D)

Exam 9: Application: International Trade

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. This country

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A common argument in favor of restricting international trade in good x is based on the premise that

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For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country's demand for aluminum exceeds the demand for aluminum in other countries.

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Denmark is an importer of computer chips and adds a $5 per chip tariff to the world price of $12 per chip. Suppose Denmark removes the tariff. Which of the following outcomes is not possible?

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If a country is an exporter of a good, then it must be the case that

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Figure 9-15 -Refer to Figure 9-15. Producer surplus with trade and without a tariff is

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Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. With trade, the equilibrium price of rifles and the equilibrium quantity of rifles demanded in Mexico are

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Countries that restrict foreign trade are likely to

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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. With free trade, consumer surplus is

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

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GATT is an example of a successful unilateral approach to achieving free trade.

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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 world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Correct AnswerverifiedBrazil wil...View AnswerShow Answer

Which of the following is the most accurate statement?

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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Before the tariff is imposed, this country

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

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Figure 9-13 -Refer to Figure 9-13. With trade, producer surplus is

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

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Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade, the domestic price and domestic quantity demanded are

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If a tariff is placed on watches, the price of both domestic and imported watches will rise by the amount of the tariff.

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Brazil wil...
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