Question 1

If Argentina exports oranges to the rest of the world,Argentina's producers of oranges are worse off,and Argentina's consumers of oranges are better off,as a result of trade.

Accepted Answer

A) True 
 B)False

Question 2

If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

Accepted Answer

A)   the country will be an exporter of the good.
B)   the country will be an importer of the good.
C)   the country will be neither an exporter nor an importer of the good.
D)   Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.E) C) and D)
F) A) and C)

Question 3

Figure 9-20
The figure illustrates the market for rice in Vietnam.
 
-Refer to Figure 9-20.In the absence of trade,total surplus in the Vietnamese rice market amounts to

Accepted Answer

A)   9,250.
B)   10,000.
C)   12,000.
D)   13,000.E) All of the above
F) A) and C)

Question 4

President Bush imposed temporary tariffs on imported steel in 2002.The reasons for this trade restriction is most consistent with the

Accepted Answer

A)   national-security argument.
B)   infant-industry argument.
C)   unfair competition argument.
D)   protection-as-a-bargaining chip-argument.E) B) and D)
F) None of the above

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

Figure 9-5
 
-Refer to Figure 9-5.With trade,total surplus is

Accepted Answer

A)   $245.
B)   $367.50.
C)   $607.50.
D)   $687.50.E) All of the above
F) A) and B)

Question 7

Figure 9-2
 
-Refer to Figure 9-2.Without trade,producer surplus is

Accepted Answer

A)   $210.
B)   $245.
C)   $455.
D)   $490.E) A) and B)
F) A) and D)

Question 8

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Accepted Answer

A) True 
 B)False

Question 9

For any country,if the world price of zinc is higher than the domestic price of zinc without trade,that country should

Accepted Answer

A)   export zinc, since that country has a comparative advantage in zinc.
B)   import zinc, since that country has a comparative advantage in zinc.
C)   neither export nor import zinc, since that country cannot gain from trade.
D)   neither export nor import zinc, since that country already produces zinc at a low cost compared to other countries.E) A) and C)
F) None of the above

Question 10

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles.
 
-Refer to Figure 9-19.With free trade,the country for which the figure is drawn will

Accepted Answer

A)   export 30 units of textiles.
B)   export 50 units of textiles.
C)   import 30 units of textiles.
D)   import 50 units of textiles.E) A) and C)
F) B) and D)

Question 13

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Accepted Answer

A unilateral approach is when a country ...

Question 14

Suppose the United States exports cars to Canada and imports bananas from Mexico.This situation suggests

Accepted Answer

A)   the United States has a comparative advantage relative to Canada in producing cars, and Mexico has a comparative advantage relative to the United States in producing bananas.
B)   the United States has a comparative advantage relative to Canada in producing bananas, and Mexico has a comparative advantage relative to the United States in producing cars.
C)   the United States has an absolute advantage relative to Canada in producing cars, and Mexico has an absolute advantage relative to the United States in producing bananas.
D)   the United States has an absolute advantage relative to Mexico in producing bananas, and Canada has an absolute advantage relative to the United States in producing cars.E) A) and B)
F) All of the above

Question 15

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

Accepted Answer

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

Question 16

Figure 9-6
 
-Refer to Figure 9-6.The amount of deadweight loss caused by the tariff equals

Accepted Answer

A)   $100.
B)   $200.
C)   $400.
D)   $500.E) A) and B)
F) All of the above

Question 17

Figure 9-1
The figure illustrates the market for wool in Scotland.
 
-Refer to Figure 9-1.When trade in wool is allowed,producer surplus in Scotland

Accepted Answer

A)   increases by the area B + D.
B)   increases by the area B + D + G.
C)   decreases by the area C + F.
D)   decreases by the area G.E) All of the above
F) B) and D)

Question 18

Suppose the United States exports cars to Switzerland and imports cheese from France.This situation suggests

Accepted Answer

A)   the United States has a comparative advantage relative to France in producing cheese, and Switzerland has a comparative advantage to the United States in producing cars.
B)   the United States has a comparative advantage relative to Switzerland in producing cars, and France has a comparative advantage relative to the United States in producing cheese.
C)   the United States has an absolute advantage relative to Switzerland in producing cars, and France has an absolute advantage relative to the United States in producing cheese.
D)   the United States has an absolute advantage relative to France in producing cheese, and Switzerland has an absolute advantage relative to the United States in producing cars.E) C) and D)
F) B) and D)

Question 19

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

Question 20

Economists view free trade as a way to raise living standards both at home and abroad.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade.

The principle of comparative advantage asserts that

Correct Answer
verified

If Argentina exports oranges to the rest of the world,Argentina's producers of oranges are worse off,and Argentina's consumers of oranges are better off,as a result of trade.

Correct Answer
verified

Figure 9-2 -Refer to Figure 9-2.Without trade,producer surplus is

Correct Answer
verified

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Correct Answer
verified
A unilateral approach is when a country ...
View Answer

Suppose the United States exports cars to Switzerland and imports cheese from France.This situation suggests

Correct Answer
verified

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19.With free trade,the country for which the figure is drawn will

Correct Answer
verified

Figure 9-5 -Refer to Figure 9-5.With trade,total surplus is

Correct Answer
verified

Economists view free trade as a way to raise living standards both at home and abroad.

Correct Answer
verified

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.In the absence of trade,total surplus in the Vietnamese rice market amounts to

Correct Answer
verified

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

Correct Answer
verified

President Bush imposed temporary tariffs on imported steel in 2002.The reasons for this trade restriction is most consistent with the

Correct Answer
verified

Suppose the United States exports cars to Canada and imports bananas from Mexico.This situation suggests

Correct Answer
verified

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.

Correct Answer
verified

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

If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

Correct Answer
verified

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

Correct Answer
verified

For any country,if the world price of zinc is higher than the domestic price of zinc without trade,that country should

Correct Answer
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Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Correct Answer
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Figure 9-6 -Refer to Figure 9-6.The amount of deadweight loss caused by the tariff equals

Correct Answer
verified

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.When trade in wool is allowed,producer surplus in Scotland

Correct Answer
verified

Exam 9: Application: International Trade.

The principle of comparative advantage asserts that

Correct AnswerverifiedShow Answer

If Argentina exports oranges to the rest of the world,Argentina's producers of oranges are worse off,and Argentina's consumers of oranges are better off,as a result of trade.

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to Figure 9-2.Without trade,producer surplus is

Correct AnswerverifiedShow Answer

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Correct AnswerverifiedA unilateral approach is when a country ...View AnswerShow Answer

Suppose the United States exports cars to Switzerland and imports cheese from France.This situation suggests

Correct AnswerverifiedShow Answer

Figure 9-19. On the diagram below, Q represents the quantity of textiles and P represents the price of textiles. -Refer to Figure 9-19.With free trade,the country for which the figure is drawn will

Correct AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.With trade,total surplus is

Correct AnswerverifiedShow Answer

Economists view free trade as a way to raise living standards both at home and abroad.

Correct AnswerverifiedShow Answer

Figure 9-20 The figure illustrates the market for rice in Vietnam. -Refer to Figure 9-20.In the absence of trade,total surplus in the Vietnamese rice market amounts to

Correct AnswerverifiedShow Answer

Free trade allows firms to realize economies of scale,resulting in higher costs of production.

Correct AnswerverifiedShow Answer

President Bush imposed temporary tariffs on imported steel in 2002.The reasons for this trade restriction is most consistent with the

Correct AnswerverifiedShow Answer

Suppose the United States exports cars to Canada and imports bananas from Mexico.This situation suggests

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For any country,if the world price of zinc is higher than the domestic price of zinc without trade,that country should

Correct AnswerverifiedShow Answer

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Correct AnswerverifiedShow Answer

Figure 9-6 -Refer to Figure 9-6.The amount of deadweight loss caused by the tariff equals

Correct AnswerverifiedShow Answer

Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.When trade in wool is allowed,producer surplus in Scotland

Correct AnswerverifiedShow Answer

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A unilateral approach is when a country ...
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a.$6,84
b.66
c.44
d....
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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