Question 1

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) None of the above

Question 2

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

Accepted Answer

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

Question 3

Figure 9-11 
-Refer to Figure 9-11.Producer surplus in this market before trade is

Accepted Answer

A)   C.
B)   B + C.
C)   A + B + D.
D)   B + C + D.E) All of the above
F) A) and B)

Question 4

Figure 9-11 
-Refer to Figure 9-11.Producer surplus plus consumer surplus in this market after trade is

Accepted Answer

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

Question 5

Figure 9-10.The figure applies to Mexico and the good is rifles. 2 - Q1 is A)  the number of rifles bought and sold in Mexico. B)  the number of rifles produced in Mexico. C)  the number of rifles exported by Mexico. D)  the number of rifles imported by Mexico." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-10.When trade takes place,the quantity Q2 - Q1 is

Accepted Answer

A)   the number of rifles bought and sold in Mexico.
B)   the number of rifles produced in Mexico.
C)   the number of rifles exported by Mexico.
D)   the number of rifles imported by Mexico.E) All of the above
F) C) and D)

Question 6

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an importer of a particular good,

Accepted Answer

A)   consumer surplus increases and total surplus increases in the market for that good.
B)   consumer surplus increases and total surplus decreases in the market for that good.
C)   consumer surplus decreases and total surplus increases in the market for that good.
D)   consumer surplus decreases and total surplus decreases in the market for that good.E) None of the above
F) A) and D)

Question 7

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 8

In analyzing international trade,we often focus on a country whose economy is small relative to the rest of the world.We do so

Accepted Answer

A)   because it is impossible to analyze the gains and losses from international trade without making this assumption.
B)   because then we can assume that world prices of goods are unaffected by that country's participation in international trade.
C)   in order to rule out the possibility of tariffs or quotas.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 9

Figure 9-13 
-Refer to Figure 9-13.With trade,the country

Accepted Answer

A)   exports 200 units of the good.
B)   exports 400 units of the good.
C)   imports 400 units of the good.
D)   imports 600 units of the good.E) B) and C)
F) A) and D)

Question 10

Figure 9-5 
-Refer to Figure 9-5.The increase in total surplus resulting from trade is

Accepted Answer

A)   $60,since producer surplus increases by $180 and consumer surplus falls by $240.
B)   $60,since consumer surplus increases by $180 and producer surplus falls by $240.
C)   $75,since consumer surplus increases by $240 and producer surplus falls by $165.
D)   $75,since consumer surplus increases by $300 and producer surplus falls by $225.E) B) and C)
F) C) and D)

Question 11

The nation of Cranolia used to prohibit international trade,but now trade is allowed,and Cranolia is exporting furniture.Relative to the previous no-trade situation,buyers of furniture in Cranolia are now better off.

Accepted Answer

A) True 
 B)False

Question 12

A tariff on a product

Accepted Answer

A)   enhances the economic well-being of the domestic economy.
B)   increases the domestic quantity supplied.
C)   increases the domestic quantity demanded.
D)   results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.E) None of the above
F) A) and B)

Question 13

When a country that imports a particular good imposes an import quota on that good,

Accepted Answer

A)   consumer surplus increases and total surplus increases in the market for that good.
B)   consumer surplus increases and total surplus decreases in the market for that good.
C)   consumer surplus decreases and total surplus increases in the market for that good.
D)   consumer surplus decreases and total surplus decreases in the market for that good.E) A) and B)
F) A) and C)

Question 14

Figure 9-2 
-Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be

Accepted Answer

A)   $10 and 40 baskets will be sold domestically.
B)   $10 and 105 baskets will be sold domestically.
C)   $7 and 70 baskets will be sold domestically.
D)   $7 and 40 baskets will be sold domestically.E) B) and C)
F) All of the above

Question 15

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 D)
F) B) and C)

Question 16

When a country that imports a particular good imposes a tariff on that good,

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

Question 17

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

Question 18

When the nation of Brownland first permitted trade with other nations,domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.We can conclude that

Accepted Answer

A)   Brownland became an exporter of wheat.
B)   consumer surplus in Brownland increased by $3 million.
C)   the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left.
D)   this example is inconsistent with the economic theory of international trade.E) A) and B)
F) A) and C)

Question 19

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

Question 20

Japan imposes a $300 per ton tariff on imported steel,raising the price charged in Japan to $1,000.Using only this information,which of the following statements is correct?

Accepted Answer

A)   The world price for steel is $300.
B)   The world price for steel is $700.
C)   The world price for steel is $1,000.
D)   The world price for steel is $1,300.E) None of the above
F) B) and C)

Exam 9: Application: International Trade

A tariff on a product

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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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Figure 9-11 -Refer to Figure 9-11.Producer surplus plus consumer surplus in this market after trade is

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Figure 9-5 -Refer to Figure 9-5.The increase in total surplus resulting from trade is

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In analyzing international trade,we often focus on a country whose economy is small relative to the rest of the world.We do so

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Japan imposes a $300 per ton tariff on imported steel,raising the price charged in Japan to $1,000.Using only this information,which of the following statements is correct?

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Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.When trade takes place,the quantity Q2 - Q1 is

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Figure 9-11 -Refer to Figure 9-11.Producer surplus in this market before trade is

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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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When a country that imports a particular good imposes an import quota on that good,

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

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When a country that imports a particular good imposes a tariff on that good,

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When the nation of Brownland first permitted trade with other nations,domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.We can conclude that

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

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Figure 9-13 -Refer to Figure 9-13.With trade,the country

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When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an importer of a particular good,

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Figure 9-2 -Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be

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The nation of Cranolia used to prohibit international trade,but now trade is allowed,and Cranolia is exporting furniture.Relative to the previous no-trade situation,buyers of furniture in Cranolia are now better off.

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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

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

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Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.When trade takes place,the quantity Q₂ - Q₁ is

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