Question 1

GATT is an example of a successful unilateral approach to achieving free trade.

Accepted Answer

A) True 
 B)False

Question 2

Assume, for Japan, that the domestic price of automobiles without international trade is lower than the world price of automobiles. This suggests that, in the production of automobiles,

Accepted Answer

A)   Japan has a comparative advantage over other countries and Japan will import automobiles.
B)   Japan has a comparative advantage over other countries and Japan will export automobiles.
C)   other countries have a comparative advantage over Japan and Japan will import automobiles.
D)   other countries have a comparative advantage over Japan and Japan will export automobiles.E) A) and B)
F) All of the above

Question 3

Figure 9-29
The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. 
-Refer to Figure 9-29. If the country allows free trade, how many units will domestic consumers demand and how many units will domestic producers supply?

Accepted Answer

With trade, domestic...

Question 4

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 5

Figure 9-27
The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-27. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

With trade...

Question 6

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, consumer surplus in the textile market amounts to

Accepted Answer

A)   $210.
B)   $320.
C)   $405.
D)   $910.E) None of the above
F) A) and B)

Question 7

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

Accepted Answer

A)   57 percent said free international trade helped the economy.
B)   26 percent said free international trade helped the economy.
C)   30 percent said free international trade hurt the economy.
D)   16 percent said free international trade hurt the economy.E) A) and B)
F) A) and C)

Question 8

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. Without trade, producer surplus is

Accepted Answer

A)   $423.
B)   $845.
C)   $1,690.
D)   $3,380.E) C) and D)
F) All of the above

Question 9

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

Accepted Answer

A)   better off regardless of how Colombia responds.
B)   better off if Colombia removes the subsidies, and will be no worse off if it doesn't.
C)   worse off if Colombia doesn't remove the subsidies in response to the threat.
D)   worse off regardless of how Colombia responds.E) A) and B)
F) A) and D)

Question 10

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Accepted Answer

Jumanji wi...

Question 11

The rules established under GATT are enforced by the

Accepted Answer

A)   governments of the nations that are involved in GATT.
B)   North American Free Trade Association.
C)   World Trade Organization.
D)   European Union.E) A) and B)
F) A) and C)

Question 12

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Accepted Answer

A)   other countries have an absolute advantage, relative to Isolani, in producing cars.
B)   Isolani has a comparative advantage, relative to other countries, in producing cars.
C)   if Isolani were to allow trade, it would import motorcycles.
D)   the world price of motorcycles exceeds the price of motorcycles in Isolani.E) A) and B)
F) B) and D)

Question 13

A tariff on a product makes

Accepted Answer

A)   domestic sellers better off and domestic buyers worse off.
B)   domestic sellers worse off and domestic buyers worse off.
C)   domestic sellers better off and domestic buyers better off.
D)   domestic sellers worse off and domestic buyers better off.E) B) and C)
F) A) and D)

Question 14

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 $5, then

Accepted Answer

A)   Isoland has a comparative advantage, relative to other countries, in producing peaches.
B)   Isoland will import peaches.
C)   consumer surplus with trade exceeds consumer surplus without trade.
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 15

President Bush imposed temporary tariffs on imported steel in 2002. The reasons for this trade restriction is most consistent with the

Accepted Answer

A)   national-security argument.
B)   infant-industry argument.
C)   unfair competition argument.
D)   protection-as-a-bargaining chip-argument.E) All of the above
F) None of the above

Question 16

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

Question 17

If a country is an exporter of a good, then it must be the case that

Accepted Answer

A)   the world price is less than its domestic price.
B)   consumer surplus is higher than a no trade situation.
C)   the world price is greater than its domestic price.
D)   they used an infant-industry argument to protect its producers.E) A) and D)
F) A) and B)

Question 18

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-27
The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. 
-Refer to Figure 9-27. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Accepted Answer

With trade, consumer...

Question 20

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. The world price for calculators represents

Accepted Answer

A)   the demand for calculators from the rest of the world.
B)   the supply of calculators from the rest of the world.
C)   the level of inefficiency in the domestic market caused by trade.
D)   the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage.E) B) and C)
F) A) and C)

Exam 9: Application: International Trade

Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Correct Answer
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With trade...
View Answer

A tariff on a product

Correct Answer
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Correct Answer
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With trade, domestic...
View Answer

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Correct Answer
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Jumanji wi...
View Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. The world price for calculators represents

Correct Answer
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A tariff on a product makes

Correct Answer
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In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

Correct Answer
verified

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 $5, then

Correct Answer
verified

Assume, for Japan, that the domestic price of automobiles without international trade is lower than the world price of automobiles. This suggests that, in the production of automobiles,

Correct Answer
verified

If a country is an exporter of a good, then it must be the case that

Correct Answer
verified

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, producer surplus is

Correct Answer
verified

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, consumer surplus in the textile market amounts to

Correct Answer
verified

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

Correct Answer
verified

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Correct Answer
verified

Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Correct Answer
verified
With trade, consumer...
View Answer

President Bush imposed temporary tariffs on imported steel in 2002. The reasons for this trade restriction is most consistent with the

Correct Answer
verified

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

Correct Answer
verified

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 Answer
verified

GATT is an example of a successful unilateral approach to achieving free trade.

Correct Answer
verified

The rules established under GATT are enforced by the

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Correct AnswerverifiedWith trade...View AnswerShow Answer

A tariff on a product

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWith trade, domestic...View AnswerShow Answer

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Correct AnswerverifiedJumanji wi...View AnswerShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. The world price for calculators represents

Correct AnswerverifiedShow Answer

A tariff on a product makes

Correct AnswerverifiedShow Answer

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

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 $5, then

Correct AnswerverifiedShow Answer

Assume, for Japan, that the domestic price of automobiles without international trade is lower than the world price of automobiles. This suggests that, in the production of automobiles,

Correct AnswerverifiedShow Answer

If a country is an exporter of a good, then it must be the case that

Correct AnswerverifiedShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, producer surplus is

Correct AnswerverifiedShow Answer

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, consumer surplus in the textile market amounts to

Correct AnswerverifiedShow Answer

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

Correct AnswerverifiedShow Answer

The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that

Correct AnswerverifiedShow Answer

Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

Correct AnswerverifiedWith trade, consumer...View AnswerShow Answer

President Bush imposed temporary tariffs on imported steel in 2002. The reasons for this trade restriction is most consistent with the

Correct AnswerverifiedShow Answer

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

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

GATT is an example of a successful unilateral approach to achieving free trade.

Correct AnswerverifiedShow Answer

The rules established under GATT are enforced by the

Correct AnswerverifiedShow Answer

Correct Answer
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With trade...
View Answer

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With trade, domestic...
View Answer

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Jumanji wi...
View Answer

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With trade, consumer...
View Answer

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