Question 1

According to the principle of comparative advantage,all countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best.

Accepted Answer

A) True 
 B)False

Question 2

Figure 9-1
The figure illustrates the market for wool in Scotland. 
-Refer to Figure 9-1.In the absence of trade,total surplus in Scotland is represented by the area

Accepted Answer

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

Question 3

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

Question 4

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach,because the multilateral approach can reduce trade restrictions abroad as well as at home.

Accepted Answer

A) True 
 B)False

Question 5

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an importer 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) A) and B)
F) C) and D)

Question 6

Figure 9-17

-Refer to Figure 9-17.Relative to the free-trade outcome,the imposition of the tariff

Accepted Answer

A)  decreases imports of the good by 16 units and increases domestic production of the good by 8 units.
B)  decreases imports of the good by 16 units and increases domestic production of the good by 16 units.
C)  decreases imports of the good by 24 units and increases domestic production of the good by 8 units.
D)  decreases imports of the good by 24 units and increases domestic production of the good by 24 units.E) B) and C)
F) All of the above

Question 7

For a small country called Boxland, the equation of the domestic demand curve for cardboard is
 QD=200−2PQ ^ { D } = 200 - 2 P QD=200−2P 	
where QDQ ^ { D }QD  represents the domestic quantity of cardboard demanded, in tons, and   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   again represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is 60 dollars.Then,if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

Accepted Answer

A)  domestic producers of cardboard become better off and domestic consumers of cardboard become better off.
B)  domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.
C)  domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
D)  domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off. E) A) and B)
F) A) and C)

Question 8

A major difference between tariffs and import quotas is that

Accepted Answer

A)  tariffs create deadweight losses,but import quotas do not.
B)  tariffs help domestic consumers,and import quotas help domestic producers.
C)  tariffs raise revenue for the government,but import quotas create surplus for those who get the licenses to import.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 9

An import quota

Accepted Answer

A)  is preferable to a tariff since an import quota does not create a deadweight loss.
B)  is a tax on imported goods.
C)  reduces the welfare of domestic consumers.
D)  reduces the welfare of domestic producers.E) A) and B)
F) A) and C)

Question 10

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Accepted Answer

A) True 
 B)False

Question 11

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods,but it is not correct for a nation that imports manufactured goods.

Accepted Answer

A) True 
 B)False

Question 12

Countries that restrict foreign trade are likely to

Accepted Answer

A)  forgo the additional surplus that trade allows,but will probably enjoy economies of scale.
B)  forgo the additional surplus that trade allows,but will be compensated by a higher rate of technological change.
C)  forgo the additional surplus that trade allows,but will have a lower rate of unemployment.
D)  have more firms with domestic market power.E) A) and C)
F) All of the above

Question 13

Which of the following statements is true?

Accepted Answer

A)  Free trade benefits a country when it exports but harms it when it imports.
B)  "Voluntary" limits on Canadian exports of hogs are better for the United States than U.S.tariffs placed on Canadian hog exports.
C)  Tariffs and quotas differ in that tariffs work like a tax and therefore impose deadweight losses,whereas quotas do not impose deadweight losses.
D)  Free trade benefits a country both when it exports and when it imports.E) C) and D)
F) B) and D)

Question 14

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Accepted Answer

A unilateral approach is when a country ...

Question 15

Figure 9-17

-Refer to Figure 9-17.With free trade,the country imports

Accepted Answer

A)  16 units of the good.
B)  24 units of the good.
C)  60 units of the good.
D)  64 units of the good.E) A) and D)
F) A) and B)

Question 16

Figure 9-15 3 - Q1. B) Q3 - Q2. C) Q4 - Q1. D) Q4 - Q2." class="answers-bank-image d-inline" rel="preload" >

-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) All of the above

Question 17

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 18

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 B)

Question 19

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Accepted Answer

A) True 
 B)False

Question 20

What is the fundamental basis for trade among nations?

Accepted Answer

A)  shortages or surpluses in nations that do not trade
B)  misguided economic policies
C)  absolute advantage
D)  comparative advantageE) A) and C)
F) A) and D)

Exam 9: Application: International Trade

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

Correct Answer
verified

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

Correct Answer
verified

A major difference between tariffs and import quotas is that

Correct Answer
verified

Figure 9-17 -Refer to Figure 9-17.With free trade,the country imports

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Countries that restrict foreign trade are likely to

Correct Answer
verified

Correct Answer
verified

According to the principle of comparative advantage,all countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best.

Correct Answer
verified

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Correct Answer
verified
A unilateral approach is when a country ...
View Answer

Figure 9-17 -Refer to Figure 9-17.Relative to the free-trade outcome,the imposition of the tariff

Correct Answer
verified

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

Correct Answer
verified

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach,because the multilateral approach can reduce trade restrictions abroad as well as at home.

Correct Answer
verified

An import quota

Correct Answer
verified

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Correct Answer
verified

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

Correct Answer
verified

What is the fundamental basis for trade among nations?

Correct Answer
verified

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods,but it is not correct for a nation that imports manufactured goods.

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.In the absence of trade,total surplus in Scotland is represented by the area

Correct Answer
verified

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Correct Answer
verified

Exam 9: Application: International Trade

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A major difference between tariffs and import quotas is that

Correct AnswerverifiedShow Answer

Figure 9-17 -Refer to Figure 9-17.With free trade,the country imports

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Countries that restrict foreign trade are likely to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to the principle of comparative advantage,all countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best.

Correct AnswerverifiedShow Answer

Characterize the two different approaches a nation can take to achieve free trade.Does one approach have an advantage over the other?

Correct AnswerverifiedA unilateral approach is when a country ...View AnswerShow Answer

Figure 9-17 -Refer to Figure 9-17.Relative to the free-trade outcome,the imposition of the tariff

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

A multilateral approach to free trade has greater potential to increase the gains from trade than a unilateral approach,because the multilateral approach can reduce trade restrictions abroad as well as at home.

Correct AnswerverifiedShow Answer

An import quota

Correct AnswerverifiedShow Answer

When a country abandons no-trade policies in favor of free-trade policies and becomes an importer of steel,then the domestic price of steel will increase as a result.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is the fundamental basis for trade among nations?

Correct AnswerverifiedShow Answer

"Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers." This statement is correct for a nation that exports manufactured goods,but it is not correct for a nation that imports manufactured goods.

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.In the absence of trade,total surplus in Scotland is represented by the area

Correct AnswerverifiedShow Answer

Economists agree that trade ought to be restricted if free trade means that domestic jobs might be lost because of foreign competition.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A unilateral approach is when a country ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified