Question 1

Figure 9-15
 
-Refer to Figure 9-15.With the tariff,the quantity of saddles imported is

Accepted Answer

A)   Q3 - Q1.
B)   Q3 - Q2.
C)   Q4 - Q1.
D)   Q4 - Q2.E) None of the above
F) B) and C)

Question 2

A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

Accepted Answer

A) True 
 B)False

Question 3

At present,the United States uses a system of quotas to limit the amount of sugar imported into the country.Which of the following statements is most likely true?

Accepted Answer

A)   The quotas are probably the result of lobbying from U.S. consumers of sugar. The quotas increase consumer surplus for the United States, reduce producer surplus for the United States, and harm foreign sugar producers.
B)   The quotas are probably the result of lobbying from U.S. producers of sugar. The quotas increase producer surplus for the United States, reduce consumer surplus for the United States, and harm foreign sugar producers.
C)   The quotas are probably the result of lobbying from foreign producers of sugar. The quotas reduce producer surplus for the United States, increase consumer surplus for the United States, and benefit foreign sugar producers.
D)   U.S. lawmakers did not need to be lobbied to impose the quotas because total surplus for the United States is higher with the quotas than without them.E) B) and C)
F) C) and D)

Question 4

Most economists support the infant-industry argument because it is so easy to implement in practice.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

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

Question 6

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

Question 7

Figure 9-1
The figure illustrates the market for wool in Scotland.
 
-Refer to Figure 9-1.With trade,Scotland will

Accepted Answer

A)   export 11 units of wool.
B)   export 5 units of wool.
C)   import 15 units of wool.
D)   import 6 units of wool.E) B) and C)
F) A) and D)

Question 8

Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

Accepted Answer

A) True 
 B)False

Question 9

Figure 9-6
 
-Refer to Figure 9-6.Without trade,the equilibrium price of carnations is

Accepted Answer

A)   $8 and the equilibrium quantity is 300.
B)   $6 and the equilibrium quantity is 200.
C)   $6 and the equilibrium quantity is 400.
D)   $4 and the equilibrium quantity is 500.E) C) and D)
F) All of the above

Question 10

When a country allows trade and becomes an exporter of a good,

Accepted Answer

A)   domestic producers gain and domestic consumers lose.
B)   domestic producers lose and domestic consumers gain.
C)   domestic producers and domestic consumers both gain.
D)   domestic producers and domestic consumers both lose.E) A) and C)
F) A) and D)

Question 11

Which of the following arguments for trade restrictions is often advanced?

Accepted Answer

A)   Trade restrictions make all Americans better off.
B)   Trade restrictions increase economic efficiency.
C)   Trade restrictions are necessary for economic growth.
D)   Trade restrictions are sometimes necessary for national security.E) None of the above
F) A) and D)

Question 12

Suppose Guatemala has an absolute advantage over other countries in producing sugar,but other countries have a comparative advantage over Guatemala in producing sugar.If trade in sugar is allowed,Guatemala

Accepted Answer

A)   will import sugar.
B)   will export sugar.
C)   will either export sugar or export sugar, but it is not clear from the given information.
D)   would have nothing to gain either from exporting or importing sugar.E) None of the above
F) All of the above

Question 13

When the nation of Mooseland first permitted trade with other nations,domestic producers of sugar experienced a decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million.We can conclude that

Accepted Answer

A)   Mooseland became an exporter of sugar.
B)   the overall economic well-being of participants in the sugar market in Mooseland fell because of trade.
C)   consumer surplus in Mooseland increased by $7 million.
D)   the opening of trade caused the domestic demand curve for sugar in Mooseland to shift to the right.E) A) and B)
F) A) and C)

Question 14

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.
 
-Refer to Figure 9-16.The area C + D + E + F represents

Accepted Answer

A)   the decrease in consumer surplus caused by the tariff.
B)   the decrease in total surplus caused by the tariff.
C)   the deadweight loss of the tariff minus government revenue raised by the tariff.
D)   the deadweight loss of the tariff plus government revenue raised by the tariff.E) A) and B)
F) A) and C)

Question 15

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

Accepted Answer

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

Question 16

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) None of the above
F) B) and C)

Question 17

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) C) and D)

Question 18

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

Accepted Answer

A)   the U.S. has a comparative advantage over other countries and the U.S. will export pineapples.
B)   the U.S. has a comparative advantage over other countries and the U.S. will import pineapples.
C)   other countries have a comparative advantage over the U.S. and the U.S. will export pineapples.
D)   other countries have a comparative advantage over the U.S. and the U.S. will import pineapples.E) B) and C)
F) A) and B)

Question 19

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

Question 20

Suppose England exports cars to Australia and imports cheese from Mexico.This situation suggests that

Accepted Answer

A)   England has a comparative advantage relative to Mexico in producing cheese, and Australia has a comparative advantage relative to England in producing cars.
B)   England has a comparative advantage relative to Australia in producing cars, and Mexico has a comparative advantage relative to England in producing cheese.
C)   England has an absolute advantage relative to Mexico in producing cheese, and Australia has an absolute advantage relative to England in producing cars.
D)   England has an absolute advantage relative to Australia in producing cars, and Mexico has an absolute advantage relative to England in producing cheese.E) A) and C)
F) All of the above

Exam 9: Application: International Trade.

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,

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When a country allows trade and becomes an exporter of a good,

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

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Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16.The area C + D + E + F represents

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

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Figure 9-1 The figure illustrates the market for wool in Scotland. -Refer to Figure 9-1.With trade,Scotland will

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Suppose Guatemala has an absolute advantage over other countries in producing sugar,but other countries have a comparative advantage over Guatemala in producing sugar.If trade in sugar is allowed,Guatemala

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Figure 9-15 -Refer to Figure 9-15.With the tariff,the quantity of saddles imported is

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When the nation of Mooseland first permitted trade with other nations,domestic producers of sugar experienced a decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million.We can conclude that

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Which of the following arguments for trade restrictions is often advanced?

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At present,the United States uses a system of quotas to limit the amount of sugar imported into the country.Which of the following statements is most likely true?

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

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A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

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

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Most economists support the infant-industry argument because it is so easy to implement in practice.

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Suppose England exports cars to Australia and imports cheese from Mexico.This situation suggests that

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Figure 9-6 -Refer to Figure 9-6.Without trade,the equilibrium price of carnations is

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

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Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.

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