Question 1

Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is 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) None of the above
F) All of the above

Question 2

When the nation of Isoland opens up its steel market to international trade, that change

Accepted Answer

A)   creates winners and losers, regardless of whether Isoland ends up exporting or importing steel.
B)   results in a decrease in total surplus, regardless of whether Isoland ends up exporting or importing steel.
C)   creates winners, but no losers, if Isoland ends up exporting steel.
D)   creates losers, but no winners, if Isoland ends up importing steel.E) All of the above
F) B) and D)

Question 3

Figure 9-21
The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-21. Consumer surplus with free trade is

Accepted Answer

A)   $4,000.
B)   $8,000.
C)   $16,000.
D)   $18,000.E) None of the above
F) B) and C)

Question 4

Figure 9-15 
-Refer to Figure 9-15. 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) A) and B)
F) A) and C)

Question 5

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. With trade and without a tariff,

Accepted Answer

A)   the domestic price is equal to the world price.
B)   roses are sold at $4 in this market.
C)   there is a shortage of 400 roses in this market.
D)   this country imports 200 roses.E) None of the above
F) A) and C)

Question 6

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

Accepted Answer

A) True 
 B)False

Question 7

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?

Accepted Answer

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

Question 8

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Accepted Answer

A) True 
 B)False

Question 9

The before-trade price of fish in Germany is $8.00 per pound. The world price of fish is $6.00 per pound. Germany is a price-taker in the fish market. If Germany allows trade in fish, then Germany will become an

Accepted Answer

A)   importer of fish and the price of fish in Germany will be $6.00.
B)   importer of fish and the price of fish in Germany will be $8.00.
C)   exporter of fish and the price of fish in Germany will be $6.00.
D)   exporter of fish and the price of fish in Germany will be $8.00.E) B) and C)
F) All of the above

Question 10

At present, the United States uses a system of quotas to limit the amount of sugar imported into the country. Which of the following statements is most likely true?

Accepted Answer

A)   The quotas are probably the result of lobbying from U.S. consumers of sugar. The quotas increase consumer surplus for the United States, reduce producer surplus for the United States, and harm foreign sugar producers.
B)   The quotas are probably the result of lobbying from U.S. producers of sugar. The quotas increase producer surplus for the United States, reduce consumer surplus for the United States, and harm foreign sugar producers.
C)   The quotas are probably the result of lobbying from foreign producers of sugar. The quotas reduce producer surplus for the United States, increase consumer surplus for the United States, and benefit foreign sugar producers.
D)   U.S. lawmakers did not need to be lobbied to impose the quotas because total surplus for the United States is higher with the quotas than without them.E) A) and D)
F) None of the above

Question 11

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes

Accepted Answer

A)   benefit the United States as a whole, because they generate revenue for the government. In addition, because the goods are priced below cost, the taxes do not harm domestic consumers.
B)   benefit the United States as a whole, because they generate revenue for the government and increase producer surplus.
C)   harm the United States as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue.
D)   harm the United States as a whole, because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue.E) A) and B)
F) C) and D)

Question 12

Scenario 9-2
-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.
-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 $60. Then Boxland's gains from international trade in cardboard amount to

Accepted Answer

A)   $145.
B)   $160.
C)   $210.
D)   $320.E) A) and B)
F) B) and D)

Question 13

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

Accepted Answer

A)   Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off.
B)   Turkish consumers of wheat become worse off and Turkish producers of wheat become better off.
C)   Turkish consumers of wheat become better off and Turkish producers of wheat become worse off.
D)   Turkish consumers of wheat become better off and Turkish producers of wheat become better off.E) None of the above
F) B) and C)

Question 14

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

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) All of the above

Question 15

Zelzar has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?

Accepted Answer

A)   producers of incense and consumers of steel
B)   consumers of all three goods
C)   consumers of incense and producers of rugs
D)   producers of steel and consumers of incenseE) A) and D)
F) All of the above

Question 16

Figure 9-15 
-Refer to Figure 9-15. Consumer surplus with the tariff is

Accepted Answer

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

Question 17

Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following equations: 
-Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit. If the country allows free trade, how much are consumer surplus, producer surplus, and producer surplus with trade?

Accepted Answer

With trade, consumer...

Question 18

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-6
The figure illustrates the market for roses in a country. 
-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) None of the above
F) A) and B)

Question 20

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. With trade and a tariff, total surplus is

Accepted Answer

A)   $750.
B)   $900.
C)   $950.
D)   $1,550.E) A) and B)
F) A) and C)

Exam 9: Application: International Trade

Correct Answer
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With trade, consumer...
View Answer

Figure 9-15 -Refer to Figure 9-15. Consumer surplus with the tariff is

Correct Answer
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Zelzar has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?

Correct Answer
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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. Suppose the government imposes a tariff of $10 per unit. With trade and a tariff, total surplus is

Correct Answer
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Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

Correct Answer
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Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Consumer surplus with free trade is

Correct Answer
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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Correct Answer
verified

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?

Correct Answer
verified

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes

Correct Answer
verified

At present, the United States uses a system of quotas to limit the amount of sugar imported into the country. Which of the following statements is most likely true?

Correct Answer
verified

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. With trade and without a tariff,

Correct Answer
verified

Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is possible?

Correct Answer
verified

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Correct Answer
verified

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Correct Answer
verified

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

Correct Answer
verified

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct Answer
verified

When the nation of Isoland opens up its steel market to international trade, that change

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. With the tariff, the domestic price and domestic quantity demanded are

Correct Answer
verified

The before-trade price of fish in Germany is $8.00 per pound. The world price of fish is $6.00 per pound. Germany is a price-taker in the fish market. If Germany allows trade in fish, then Germany will become an

Correct Answer
verified

Correct Answer
verified

Exam 9: Application: International Trade

Correct AnswerverifiedWith trade, consumer...View AnswerShow Answer

Figure 9-15 -Refer to Figure 9-15. Consumer surplus with the tariff is

Correct AnswerverifiedShow Answer

Zelzar has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?

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. With trade and a tariff, total surplus is

Correct AnswerverifiedShow Answer

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,

Correct AnswerverifiedShow Answer

Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. Consumer surplus with free trade is

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes

Correct AnswerverifiedShow Answer

At present, the United States uses a system of quotas to limit the amount of sugar imported into the country. Which of the following statements is most likely true?

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. With trade and without a tariff,

Correct AnswerverifiedShow Answer

Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is possible?

Correct AnswerverifiedShow Answer

The results of a 2008 Los Angeles Times poll suggest that a significant majority of Americans believe that free international trade helps the American economy.

Correct AnswerverifiedShow Answer

When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off and sellers of shoes in that country become better off.

Correct AnswerverifiedShow Answer

The nation of Aviana soon will abandon its no-trade policy and adopt a free-trade policy. If the world price of goose meat is $3 per pound and the domestic price of goose meat without trade is $2 per pound, then Aviana should export goose meat.

Correct AnswerverifiedShow Answer

When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct AnswerverifiedShow Answer

When the nation of Isoland opens up its steel market to international trade, that change

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. With the tariff, the domestic price and domestic quantity demanded are

Correct AnswerverifiedShow Answer

The before-trade price of fish in Germany is $8.00 per pound. The world price of fish is $6.00 per pound. Germany is a price-taker in the fish market. If Germany allows trade in fish, then Germany will become an

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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With trade, consumer...
View Answer

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