Question 1

Figure 9-5 
-Refer to Figure 9-5.If this country allows free trade in wagons,

Accepted Answer

A)   consumers will gain more than producers will lose.
B)   producers will gain more than consumers will lose.
C)   producers and consumers will both gain equally.
D)   producers and consumers will both lose equally.E) B) and C)
F) A) and C)

Question 2

When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy,the result was that the country began to import automobiles.The change in policy improved the well-being of that nation in the sense that

Accepted Answer

A)   both producers of automobiles and consumers of automobiles in that nation became better off as a result.
B)   the gains to automobile producers in that nation exceeded the losses of the automobile consumers in that nation.
C)   the gains to automobile consumers in that nation exceeded the losses of the automobile producers in that nation.
D)   even though total surplus in that nation decreased,it was still true that consumer surplus and producer surplus increased.E) B) and C)
F) B) and D)

Question 3

Assume,for Singapore,that the domestic price of soybeans without international trade is higher than the world price of soybeans.This suggests that,in the production of soybeans,

Accepted Answer

A)   Singapore has a comparative advantage over other countries and Singapore will import soybeans.
B)   Singapore has a comparative advantage over other countries and Singapore will export soybeans.
C)   other countries have a comparative advantage over Singapore and Singapore will import soybeans.
D)   other countries have a comparative advantage over Singapore and Singapore will export soybeans.E) A) and B)
F) A) and C)

Question 4

When a country allows international trade and becomes an importer of a good,

Accepted Answer

A)   domestic producers of the good become better off.
B)   domestic consumers of the good become worse off.
C)   the gains of the winners exceed the losses of the losers.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 5

Figure 9-17 
-Refer to Figure 9-17.With free trade,total surplus is

Accepted Answer

A)   $600.
B)   $1,200.
C)   $1,800.
D)   $2,400.E) B) and D)
F) A) and D)

Question 6

When a country allows international trade and becomes an importer of a good,

Accepted Answer

A)   domestic producers of the good become better off.
B)   domestic consumers of the good become better off.
C)   the gains of the winners fall short of the losses of the losers.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 7

Figure 9-2 
-Refer to Figure 9-2.As a result of trade,total surplus increases by

Accepted Answer

A)   $80.
B)   $97.50.
C)   $162.50.
D)   $495.50.E) B) and C)
F) C) and D)

Question 8

Figure 9-4.The domestic country is Nicaragua. 
-Refer to Figure 9-4.Which of the following statements is accurate?

Accepted Answer

A)   Consumer surplus with trade is $3,200.
B)   Producer surplus with trade is $375.
C)   The gains from trade amount to $800.
D)   The gains from trade are represented on the graph by the area bounded by the points (0,$12) ,(300,$12) ,(300,$7) and (0,$7) .E) B) and C)
F) A) and B)

Question 9

The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

Accepted Answer

A) True 
 B)False

Question 10

If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

Accepted Answer

A)   the country will be an exporter of the good.
B)   the country will be an importer of the good.
C)   the country will be neither an exporter nor an importer of the good.
D)   Additional information is needed about demand to determine whether the country will be an exporter of the good,an importer of the good,or neither.E) B) and D)
F) B) and C)

Question 11

Figure 9-11 
-Refer to Figure 9-11.The change in total surplus in this market because of trade is

Accepted Answer

A)   A,and this area represents a loss of total surplus.
B)   B,and this area represents a gain in total surplus.
C)   C,and this area represents a loss of total surplus.
D)   D,and this area represents a gain in total surplus.E) A) and B)
F) None of the above

Question 12

Domestic producers of a good become worse off,and domestic consumers of a good become better off,when a country begins allowing international trade in that good and

Accepted Answer

A)   the country becomes an importer of the good as a result.
B)   the world price exceeds the domestic price of the good that prevailed before international trade was allowed.
C)   the country in question has a comparative advantage,relative to other countries,in producing the good.
D)   total surplus does not change as a result.E) A) and B)
F) B) and C)

Question 13

Figure 9-12 
-Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

Accepted Answer

A)   $27 and 400.
B)   $27 and 800.
C)   $21 and 400.
D)   $21 and 600.E) All of the above
F) A) and B)

Question 14

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

Accepted Answer

A)   $210.
B)   $245.
C)   $450.
D)   $455.E) A) and B)
F) A) and C)

Question 15

Some goods can be produced at low cost only if they are produced in large quantities.This phenomenon is called

Accepted Answer

A)   marginal cost of production.
B)   marginal benefit of size.
C)   economies of scale.
D)   economies of production.E) B) and C)
F) All of the above

Question 16

The small-economy assumption is necessary to analyze the gains and losses from international trade.

Accepted Answer

A) True 
 B)False

Question 17

Suppose a certain country imposes a tariff on a good.Which of the following results of the tariff is possible?

Accepted Answer

A)   Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
B)   Consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
C)   Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50.
D)   Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150.E) C) and D)
F) All of the above

Question 18

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

Question 19

Within a country,the domestic price of a product will equal the world price if

Accepted Answer

A)   trade restrictions are imposed on the product.
B)   the country allows free trade.
C)   the country chooses to import,but not export,the product.
D)   the country chooses to export,but not import,the product.E) All of the above
F) C) and D)

Question 20

About what percent of total world trade is accounted for by countries that belong to the World Trade Organization?

Accepted Answer

A)   54 percent
B)   72 percent
C)   89 percent
D)   97 percentE) A) and D)
F) C) and D)

Exam 9: Application: International Trade

Figure 9-17 -Refer to Figure 9-17.With free trade,total surplus is

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The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

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Figure 9-11 -Refer to Figure 9-11.The change in total surplus in this market because of trade is

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Figure 9-5 -Refer to Figure 9-5.If this country allows free trade in wagons,

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Figure 9-12 -Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

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Figure 9-4.The domestic country is Nicaragua. -Refer to Figure 9-4.Which of the following statements is accurate?

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Assume,for Singapore,that the domestic price of soybeans without international trade is higher than the world price of soybeans.This suggests that,in the production of soybeans,

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Within a country,the domestic price of a product will equal the world price if

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Some goods can be produced at low cost only if they are produced in large quantities.This phenomenon is called

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Domestic producers of a good become worse off,and domestic consumers of a good become better off,when a country begins allowing international trade in that good and

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The small-economy assumption is necessary to analyze the gains and losses from international trade.

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If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

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When a certain nation abandoned a policy of prohibiting international trade in automobiles in favor of a free-tree policy,the result was that the country began to import automobiles.The change in policy improved the well-being of that nation in the sense that

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

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When a country allows international trade and becomes an importer of a good,

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Figure 9-2 -Refer to Figure 9-2.As a result of trade,total surplus increases by

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About what percent of total world trade is accounted for by countries that belong to the World Trade Organization?

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When a country allows international trade and becomes an importer of a good,

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Suppose a certain country imposes a tariff on a good.Which of the following results of the tariff is possible?

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

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