Question 1

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 2

Figure 9-11 
-Refer to Figure 9-11. Producer surplus in this market after trade is

Accepted Answer

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

Question 3

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

Question 4

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

Accepted Answer

A)  cause these factories to pay the U.S. minimum wage.
B)  increase the rate of technological advance in poor countries so that they can afford to pay higher wages.
C)  increase poverty in poor countries and benefit U.S. firms which compete with these imports.
D)  harm U.S. firms which compete with these imports.E) B) and C)
F) A) and B)

Question 5

Scenario 9-2
For a small country called Boxland, the equation of the domestic demand curve for cardboard is

QD=200−2PQ ^ { D } = 200 - 2 PQD=200−2P  ,
where  QDQ ^ { D }QD  represents the domestic quantity of cardboard demanded, in tons, and  PPP  represents the price of a ton of cardboard.For Boxland, the equation of the domestic supply curve for cardboard is

QS=−60+3PQ ^ { S } = - 60 + 3 PQS=−60+3P  ,
where  QsQ ^ { s }Qs  represents the domestic quantity of cardboard supplied, in tons, and  PPP  again represents the price of a ton of cardboard.
-Refer to Scenario 9-2. Suppose the world price of cardboard is $60. Then, relative to the no-trade situation, international trade in cardboard

Accepted Answer

A)  benefits Boxlandian consumers by $750 and harms Boxlandian producers by $660.
B)  harms Boxlandian consumers by $736 and harms Boxlandian producers by $598.
C)  harms Boxlandian consumers by $704 and benefits Boxlandian producers by $864.
D)  harms Boxlandian consumers by $804 and benefits Boxlandian producers by $984. E) B) and C)
F) All of the above

Question 6

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

Accepted Answer

A)  312.5.
B)  367.0.
C)  467.5.
D)  495.0.E) A) and D)
F) B) and C)

Question 7

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 price of peaches in the United States

Accepted Answer

A)  will be greater than the world price.
B)  will be equal to the world price.
C)  will be less than the world price.
D)  could be greater than, equal to, or less than the world price; this cannot be determined.E) A) and B)
F) All of the above

Question 8

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 C)
F) All of the above

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

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) B) and C)
F) C) and D)

Question 11

Figure 9-17 
-Refer to Figure 9-17. Without trade, total surplus is

Accepted Answer

A)  $600.
B)  $1,200.
C)  $1,800.
D)  $2,250.E) B) and D)
F) B) and C)

Question 12

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) B) and D)
F) A) and B)

Question 13

What are the arguments in favor of trade restrictions, and what are the counterarguments? According to most economists, do any of these arguments really justify trade restrictions? Explain.

Accepted Answer

Arguments mentioned in the text include ...

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

Question 15

Figure 9-13 
-Refer to Figure 9-13. Consumer surplus after trade is

Accepted Answer

A)  $3,600.
B)  $5,400.
C)  $7,200.
D)  $8,100.E) A) and B)
F) A) and C)

Question 16

Assume the nation of Cropland does not trade with the rest of the world. By comparing the world price of corn to the price of corn in Cropland, we can determine whether

Accepted Answer

A)  consumer surplus exceeds producer surplus in Cropland.
B)  Cropland has an absolute advantage in producing corn.
C)  Cropland has a comparative advantage in producing corn.
D)  All of the above are correct.E) B) and C)
F) A) and B)

Question 17

Workers displaced by trade eventually find jobs in

Accepted Answer

A)  another country.
B)  the government sector.
C)  the industries in which the country has a comparative advantage.
D)  a different company in the same industry.E) A) and B)
F) A) and C)

Question 18

When the nation of Duxembourg allows trade and becomes an importer of software,

Accepted Answer

A)  residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises.
B)  residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls.
C)  residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises.
D)  residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls.E) A) and B)
F) A) and C)

Question 19

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Accepted Answer

A)  foreign competitors that can produce quality textile goods at low cost.
B)  lower prices of goods that are substitutes for clothing.
C)  a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good.
D)  the fact that the minimum wage in the U.S. has failed to keep pace with the cost of living.E) None of the above
F) B) and C)

Question 20

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

Exam 9: Application: International Trade

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

Correct Answer
verified

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

Correct Answer
verified

When the nation of Duxembourg allows trade and becomes an importer of software,

Correct Answer
verified

Workers displaced by trade eventually find jobs in

Correct Answer
verified

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 Answer
verified

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 price of peaches in the United States

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Assume the nation of Cropland does not trade with the rest of the world. By comparing the world price of corn to the price of corn in Cropland, we can determine whether

Correct Answer
verified

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Correct Answer
verified

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

Correct Answer
verified

What are the arguments in favor of trade restrictions, and what are the counterarguments? According to most economists, do any of these arguments really justify trade restrictions? Explain.

Correct Answer
verified
Arguments mentioned in the text include ...
View Answer

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

Correct Answer
verified

Figure 9-11 -Refer to Figure 9-11. Producer surplus in this market after trade is

Correct Answer
verified

Figure 9-17 -Refer to Figure 9-17. Without trade, total surplus is

Correct Answer
verified

Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 9: Application: International Trade

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to

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 the nation of Duxembourg allows trade and becomes an importer of software,

Correct AnswerverifiedShow Answer

Workers displaced by trade eventually find jobs in

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

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 price of peaches in the United States

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Assume the nation of Cropland does not trade with the rest of the world. By comparing the world price of corn to the price of corn in Cropland, we can determine whether

Correct AnswerverifiedShow Answer

An important factor in the decline of the U.S. textile industry over the past 100 or so years is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are the arguments in favor of trade restrictions, and what are the counterarguments? According to most economists, do any of these arguments really justify trade restrictions? Explain.

Correct AnswerverifiedArguments mentioned in the text include ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 9-11 -Refer to Figure 9-11. Producer surplus in this market after trade is

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17. Without trade, total surplus is

Correct AnswerverifiedShow Answer

Figure 9-13 -Refer to Figure 9-13. Consumer surplus after trade is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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Arguments mentioned in the text include ...
View Answer

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