Question 1

One should be especially wary of the national-security argument for restricting trade when that argument is made by

Accepted Answer

A)   representatives of industry.
B)   representatives of the defense establishment.
C)   members of households.
D)   foreign government officials.E) B) and C)
F) C) and D)

Question 2

When a country that imported 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 D)
F) A) and C)

Question 3

If the Korean steel industry subsidizes the steel that it sells to the United States,the

Accepted Answer

A)   United States should protect its domestic steel industry from this unfair competition.
B)   harm done to U.S.steel producers from this unfair competition exceeds the gain to U.S.consumers of cheap Korean steel.
C)   harm done to U.S.steel producers is less than the benefit that accrues to U.S.consumers of steel.
D)   United States should subsidize the products it sells to Korea.E) B) and C)
F) All of the above

Question 4

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 5

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter 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) C) and D)
F) None of the above

Question 6

Import quotas and tariffs both cause the quantity of imports to fall.

Accepted Answer

A) True 
 B)False

Question 7

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 D)
F) A) and B)

Question 8

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 C)

Question 9

Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel.The world price of peaches is $52 per bushel.The U.S.is a price-taker in the market for peaches.
-Refer to Scenario 9-1.If trade in peaches is allowed,the

Accepted Answer

A)   price paid by American consumers of peaches is unchanged relative to the no-trade situation.
B)   total well-being of American producers of peaches is diminished relative to the no-trade situation.
C)   total well-being of American consumers of peaches is enhanced relative to the no-trade situation.
D)   total well-being of the United States is enhanced relative to the no-trade situation.E) A) and B)
F) All of the above

Question 10

The General Agreement on Tariffs and Trade (GATT) was initiated in response to

Accepted Answer

A)   in increase in exports of low-priced goods from developing countries to developed countries.
B)   the replacement of manufacturing jobs with service jobs in developed countries.
C)   economic dislocations caused by the North American Free Trade Agreement (NAFT
A)  in the 1990s.
D)   high tariffs imposed during the Great Depression of the 1930s.E) B) and C)
F) A) and D)

Question 11

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Accepted Answer

A)   this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade.
B)   this is an indication that the nation has a comparative advantage in producing soybeans.
C)   the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off.
D)   All of the above are correct.E) B) and C)
F) C) and D)

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,then it will be an exporter of peaches if and only if the world price of peaches is

Accepted Answer

A)   above $2.
B)   below $4.
C)   above $4.
D)   below $7.E) None of the above
F) B) and D)

Question 13

Figure 9-15 1 and Q1. B)  P1 and Q4. C)  P2 and Q2. D)  P2 and Q3." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-15.With trade and without a tariff,the 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) B) and C)
F) C) and D)

Question 14

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

Accepted Answer

A)   The gains of domestic consumers of bottled water exceed the losses of domestic producers of bottled water.
B)   The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water.
C)   The price paid by domestic consumers of bottled water decreases.
D)   The price received by domestic producers of bottled water decreases.E) All of the above
F) B) and D)

Question 15

Figure 9-6 
-Refer to Figure 9-6.The size of the tariff on carnations is

Accepted Answer

A)   $8 per dozen.
B)   $6 per dozen.
C)   $4 per dozen.
D)   $2 per dozen.E) A) and D)
F) A) and C)

Question 16

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.With trade,China will

Accepted Answer

A)   import 100 pencil sharpeners.
B)   import 250 pencil sharpeners.
C)   export 150 pencil sharpeners.
D)   export 250 pencil sharpeners.E) B) and D)
F) None of the above

Question 17

Trade among nations is ultimately based on

Accepted Answer

A)   absolute advantage.
B)   strategic advantage.
C)   comparative advantage.
D)   technical advantage.E) A) and C)
F) A) and D)

Question 18

A common argument in favor of restricting international trade in good x is based on the premise that

Accepted Answer

A)   international trade reduces total surplus in countries that export good x.
B)   international trade reduces total surplus in countries that import good x.
C)   international trade is desirable only when countries with different domestic supplies of natural resources play by different rules when trading with one another.
D)   trade restrictions can be useful when one country bargains with its trading partners.E) C) and D)
F) A) and D)

Question 19

When a country that imports a particular good imposes a tariff 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) None of the above
F) B) and C)

Question 20

Figure 9-17 
-Refer to Figure 9-17.When the country moves from free trade to trade and a tariff,consumer surplus

Accepted Answer

A)   decreases by $576 and producer surplus does not change.
B)   decreases by $576 and producer surplus increases by $192.
C)   decreases by $792 and producer surplus does not change.
D)   decreases by $792 and producer surplus increases by $192.E) None of the above
F) A) and B)

Exam 9: Application: International Trade

Figure 9-6 -Refer to Figure 9-6.The size of the tariff on carnations is

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Figure 9-3.The domestic country is China. -Refer to Figure 9-3.With trade,China will

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

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A common argument in favor of restricting international trade in good x is based on the premise that

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Figure 9-17 -Refer to Figure 9-17.When the country moves from free trade to trade and a tariff,consumer surplus

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

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Import quotas and tariffs both cause the quantity of imports to fall.

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Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel.The world price of peaches is $52 per bushel.The U.S.is a price-taker in the market for peaches. -Refer to Scenario 9-1.If trade in peaches is allowed,the

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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

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

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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,then it will be an exporter of peaches if and only if the world price of peaches is

Correct AnswerverifiedShow Answer

Trade among nations is ultimately based on

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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

Figure 9-15 -Refer to Figure 9-15.With trade and without a tariff,the price and domestic quantity demanded are

Correct AnswerverifiedShow Answer

If the Korean steel industry subsidizes the steel that it sells to the United States,the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One should be especially wary of the national-security argument for restricting trade when that argument is made by

Correct AnswerverifiedShow Answer

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Correct AnswerverifiedShow Answer

The General Agreement on Tariffs and Trade (GATT) was initiated in response to

Correct AnswerverifiedShow Answer

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