Question 1

Figure 9-8.On the diagram below,Q represents the quantity of cars and P represents the price of cars. 
-Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

Accepted Answer

A)   is represented by the area A + B + C.
B)   is represented by the area A + B + D.
C)   is smaller than producer surplus without international trade in cars.
D)   is larger than total surplus without international trade in cars.E) C) and D)
F) A) and B)

Question 2

If the United States threatens to impose a tariff on German cars if Germany does not remove agricultural subsidies,the United States will be

Accepted Answer

A)   better off no matter how Germany responds.
B)   better off if Germany gives in,and will be no worse off if it doesn't.
C)   worse off if Germany doesn't give in to the threat.
D)   worse off no matter how Germany responds.E) A) and B)
F) All of the above

Question 3

Figure 9-12 
-Refer to Figure 9-12.Consumer surplus after trade is

Accepted Answer

A)   $1,600.
B)   $2,400.
C)   $3,200.
D)   $3,600.E) A) and B)
F) A) and C)

Question 4

Figure 9-14.On the diagram below,Q represents the quantity of computers and P represents the price of computers. 
-Refer to Figure 9-14.When the country for which the figure is drawn allows international trade in computers,

Accepted Answer

A)   consumer surplus changes from the area A + B + D to the area A.
B)   producer surplus changes from the area C to the area B + C + D.
C)   total surplus decreases by the area D.
D)   All of the above are correct.E) None of the above
F) B) and D)

Question 5

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

Question 6

Suppose France subsidizes French wheat farmers,while Germany offers no subsidy to German wheat farmers.As a result of the French subsidy,sales of French wheat to Germany

Accepted Answer

A)   may prompt German farmers to invoke the unfair-competition argument.
B)   increase the consumer surplus of German buyers of wheat.
C)   increase the total surplus of the German people.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 7

Workers displaced by trade eventually find jobs in

Accepted Answer

A)   another country.
B)   the government sector.
C)   the industries in which the country has a comparative advantage.
D)   a different company in the same industry.E) A) and B)
F) A) and D)

Question 8

After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Accepted Answer

A)   the domestic price of coffee will be greater than the world price of coffee.
B)   the domestic price of coffee will be lower than the world price of coffee.
C)   the domestic price of coffee will equal the world price of coffee.
D)   The world price of coffee does not matter;the domestic price of coffee prevails.E) B) and C)
F) A) and D)

Question 9

The nation of Pineland forbids international trade.In Pineland,you can buy 1 pound of fish for 2 pounds of beef.In other countries,you can buy 1 pound of fish for 1.5 pounds of beef.These facts indicate that

Accepted Answer

A)   Pineland has a comparative advantage,relative to other countries,in producing fish.
B)   other countries have a comparative advantage,relative to Pineland,in producing beef.
C)   the price of beef in Pineland exceeds the world price of beef.
D)   if Pineland were to allow trade,it would import fish.E) All of the above
F) A) and B)

Question 10

When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Accepted Answer

A)   cannot experience significant gains or losses by trading with other countries.
B)   cannot have a significant comparative advantage over other countries.
C)   cannot affect world prices by trading with other countries.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 11

Trade decisions are based on the principle of absolute advantage.

Accepted Answer

A) True 
 B)False

Question 12

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.If Isoland allows international trade and if the world price of peaches is $3,then

Accepted Answer

A)   Isoland has a comparative advantage,relative to other countries,in producing peaches.
B)   Isoland will export peaches.
C)   producer surplus with trade exceeds producer surplus without trade.
D)   consumer surplus with trade exceeds consumer surplus without trade.E) A) and C)
F) A) and B)

Question 13

When a government imposes a tariff on a product,the domestic price will equal the world price.

Accepted Answer

A) True 
 B)False

Question 14

If Belgium exports chocolate to the rest of the world,then Belgian chocolate producers benefit from higher producer surplus,Belgian chocolate consumers are worse off because of lower consumer surplus,and total surplus in Belgium increases because of the exports of chocolate.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)   a decrease in consumer surplus.
B)   an increase in producer surplus.
C)   an increase in total surplus.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 16

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

Question 17

Figure 9-1
The figure illustrates the market for wool in New Zealand. 
-Refer to Figure 9-1.In the absence of trade,total surplus in the New Zealand wool market amounts to

Accepted Answer

A)   187.5
B)   275.0
C)   378.5
D)   412.5E) C) and D)
F) B) and D)

Question 18

Figure 9-5 
-Refer to Figure 9-5.Without trade,total surplus amounts to

Accepted Answer

A)   $122.50.
B)   $245.
C)   $367.50.
D)   $612.50.E) All of the above
F) A) and C)

Question 19

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. 2 - Q1 units of cheese. B)  exports Q2 - Q1 units of cheese. C)  imports Q2 - Q0 units of cheese. D)  exports Q2 - Q0 units of cheese." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-7.With trade,Wales

Accepted Answer

A)   imports Q2 - Q1 units of cheese.
B)   exports Q2 - Q1 units of cheese.
C)   imports Q2 - Q0 units of cheese.
D)   exports Q2 - Q0 units of cheese.E) A) and D)
F) B) and D)

Question 20

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

Accepted Answer

A)   Total surplus in the domestic country falls.
B)   Producer surplus in the domestic country increases.
C)   The domestic country experiences a deadweight loss.
D)   Revenue is raised for the domestic government.E) A) and B)
F) A) and C)

Exam 9: Application: International Trade

Figure 9-1 The figure illustrates the market for wool in New Zealand. -Refer to Figure 9-1.In the absence of trade,total surplus in the New Zealand wool market amounts to

Correct Answer
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Figure 9-12 -Refer to Figure 9-12.Consumer surplus after trade is

Correct Answer
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Workers displaced by trade eventually find jobs in

Correct Answer
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The nation of Pineland forbids international trade.In Pineland,you can buy 1 pound of fish for 2 pounds of beef.In other countries,you can buy 1 pound of fish for 1.5 pounds of beef.These facts indicate that

Correct Answer
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Figure 9-14.On the diagram below,Q represents the quantity of computers and P represents the price of computers. -Refer to Figure 9-14.When the country for which the figure is drawn allows international trade in computers,

Correct Answer
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When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Correct Answer
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Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.With trade,Wales

Correct Answer
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If Belgium exports chocolate to the rest of the world,then Belgian chocolate producers benefit from higher producer surplus,Belgian chocolate consumers are worse off because of lower consumer surplus,and total surplus in Belgium increases because of the exports of chocolate.

Correct Answer
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If the United States threatens to impose a tariff on German cars if Germany does not remove agricultural subsidies,the United States will be

Correct Answer
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Correct Answer
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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
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Suppose France subsidizes French wheat farmers,while Germany offers no subsidy to German wheat farmers.As a result of the French subsidy,sales of French wheat to Germany

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

Figure 9-5 -Refer to Figure 9-5.Without trade,total surplus amounts to

Correct Answer
verified

Trade decisions are based on the principle of absolute advantage.

Correct Answer
verified

Figure 9-8.On the diagram below,Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

Correct Answer
verified

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

Correct Answer
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When a government imposes a tariff on a product,the domestic price will equal the world price.

Correct Answer
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After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Correct Answer
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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. -Refer to Figure 9-18.If Isoland allows international trade and if the world price of peaches is $3,then

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-1 The figure illustrates the market for wool in New Zealand. -Refer to Figure 9-1.In the absence of trade,total surplus in the New Zealand wool market amounts to

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12.Consumer surplus after trade is

Correct AnswerverifiedShow Answer

Workers displaced by trade eventually find jobs in

Correct AnswerverifiedShow Answer

The nation of Pineland forbids international trade.In Pineland,you can buy 1 pound of fish for 2 pounds of beef.In other countries,you can buy 1 pound of fish for 1.5 pounds of beef.These facts indicate that

Correct AnswerverifiedShow Answer

Figure 9-14.On the diagram below,Q represents the quantity of computers and P represents the price of computers. -Refer to Figure 9-14.When the country for which the figure is drawn allows international trade in computers,

Correct AnswerverifiedShow Answer

When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Correct AnswerverifiedShow Answer

Figure 9-7.The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7.With trade,Wales

Correct AnswerverifiedShow Answer

If Belgium exports chocolate to the rest of the world,then Belgian chocolate producers benefit from higher producer surplus,Belgian chocolate consumers are worse off because of lower consumer surplus,and total surplus in Belgium increases because of the exports of chocolate.

Correct AnswerverifiedShow Answer

If the United States threatens to impose a tariff on German cars if Germany does not remove agricultural subsidies,the United States will be

Correct AnswerverifiedShow Answer

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

Suppose France subsidizes French wheat farmers,while Germany offers no subsidy to German wheat farmers.As a result of the French subsidy,sales of French wheat to Germany

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 AnswerverifiedShow Answer

Figure 9-5 -Refer to Figure 9-5.Without trade,total surplus amounts to

Correct AnswerverifiedShow Answer

Trade decisions are based on the principle of absolute advantage.

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Figure 9-8.On the diagram below,Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8.In the country for which the figure is drawn,total surplus with international trade in cars

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Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

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When a government imposes a tariff on a product,the domestic price will equal the world price.

Correct AnswerverifiedShow Answer

After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,

Correct AnswerverifiedShow Answer

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.If Isoland allows international trade and if the world price of peaches is $3,then

Correct AnswerverifiedShow Answer

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