Question 1

When markets open up to international trade, we know that consumer surplus will rise.
​

Accepted Answer

A) True 
 B)False

Question 2

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 3

The imposition of a tariff on imported wine will increase the domestic price of wine, decrease the quantity of wine imported, and increase the quantity of wine produced domestically.

Accepted Answer

A) True 
 B)False

Question 4

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Accepted Answer

A) True 
 B)False

Question 5

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

Accepted Answer

A) True 
 B)False

Question 6

The rules established under the General Agreement on Tariffs and Trade (GATT) are enforced by an international body called the World Trade Organization (WTO).

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

NAFTA is an example of a multilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Question 9

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

Accepted Answer

Nash will ...

Question 10

According to the principle of comparative advantage, all countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best.

Accepted Answer

A) True 
 B)False

Question 11

When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?

Accepted Answer

A)  Domestic producers become worse off, and domestic consumers become better off.
B)  The price received by domestic producers of bottled water increases.
C)  The price paid by domestic consumers of bottled water decreases.
D)  The price received by domestic producers of bottled water decreases.E) B) and C)
F) All of the above

Question 12

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Accepted Answer

A)  Moldova can only import goods; it cannot export goods.
B)  Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage.
C)  only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant.
D)  Moldova is a price taker.E) B) and C)
F) A) and B)

Question 13

Figure 9-6 
-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) A) and B)
F) All of the above

Question 14

If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.

Accepted Answer

A) True 
 B)False

Question 15

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 16

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 17

A country has a comparative advantage in a product if the world price is _____ than that country's domestic price without trade.

Accepted Answer

The answer of A country has a comparative advantage in...

Question 18

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

Accepted Answer

A)  $19,440.
B)  $23,280.
C)  $9,720.
D)  $3,000.E) B) and C)
F) A) and D)

Question 19

Figure 9-2  ​
-Refer to Figure 9-2. With trade, total surplus is

Accepted Answer

A)  $9,720.
B)  $3,000.
C)  $23,280.
D)  $19,440.E) All of the above
F) C) and D)

Question 20

Most economists view the United States as an ongoing experiment that raises serious doubts about the virtues of free trade.

Accepted Answer

A) True 
 B)False

Exam 9: Application: International Trade

A country has a comparative advantage in a product if the world price is _____ than that country's domestic price without trade.

Correct AnswerverifiedShow Answer

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

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 amounts to

Correct AnswerverifiedShow Answer

The imposition of a tariff on imported wine will increase the domestic price of wine, decrease the quantity of wine imported, and increase the quantity of wine produced domestically.

Correct AnswerverifiedShow Answer

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

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

If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.

Correct AnswerverifiedShow Answer

If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus.

Correct AnswerverifiedShow Answer

According to the principle of comparative advantage, all countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best.

Correct AnswerverifiedShow Answer

Most economists view the United States as an ongoing experiment that raises serious doubts about the virtues of free trade.

Correct AnswerverifiedShow Answer

When markets open up to international trade, we know that consumer surplus will rise. ​

Correct AnswerverifiedShow Answer

The rules established under the General Agreement on Tariffs and Trade (GATT) are enforced by an international body called the World Trade Organization (WTO).

Correct AnswerverifiedShow Answer

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel, then the domestic price of steel will increase as a result.

Correct AnswerverifiedShow Answer

When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?

Correct AnswerverifiedShow Answer

Figure 9-6 -When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,

Correct AnswerverifiedShow Answer

NAFTA is an example of a multilateral approach to achieving free trade.

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

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

Correct AnswerverifiedNash will ...View AnswerShow Answer

Figure 9-2 ​ -Refer to Figure 9-2. With trade, total surplus is

Correct AnswerverifiedShow Answer

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

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When markets open up to international trade, we know that consumer surplus will rise.

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Nash will ...
View Answer

Figure 9-2 -Refer to Figure 9-2. With trade, total surplus is

Correct Answer
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