EC 211 Chapter 9

Countries that restrict foreign trade are likely to

have more firms with domestic market power

Refer to Figure 9-2. If this country chooses to trade, the price of baskets in this country will be

$10 and 40 baskets will be sold domestically

Refer to Figure 9-19. With free trade, consumer surplus in the textile market amounts to

$405

Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is possible?

More Danish produced chips are sold in Denmark

Refer to Figure 9-15. With the tariff, the domestic price and domestic quantity demanded are Group of answer choices

P2 & Q3

Which of the following is the most accurate statement?

Protection in not necessary for an industry to grow

Import quotas and tariffs produce some common results. Which of the following is not one of those common results?

Revenue is raised for the domestic government

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of beans increases to equal the world price of beans, then

all of the above

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

confirmation of the virtues of free trade

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

consumer surplus increases and producer surplus decreases

Refer to Figure 9-5. With trade, this country

imports 50 wagons

Refer to Figure 9-5. Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country, given that wagons and horses are complements?

the quantity of wagons that this country imports would increase

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

$612.50

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

A

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

A multilateral approach requires the agreement of two or mire friends

Refer to Figure 9-11. Producer surplus plus consumer surplus in this market before trade is

A+B+C

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

A+B+C

Refer to Figure 9-1. Relative to the no-trade situation, trade with the rest of the world results in

Scotland consumers paying a higher price for wool

When a country allows trade and becomes an exporter of a good, which of the following is not a consequence?

The loss of domestic consumers of the good exceed the gains of the domestic producers of the good

Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

The number of rifles imported by Mexico

Turkey is an importer of wheat. The world price of a bushel of wheat is $7. Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff

Turkish consumers of wheat become worse off and Turkish producers of wheat become better off

If the United States threatens to impose a tariff on Honduran blueberries if Honduras does not remove agricultural subsidies, the United States will be

worse off if Honduras doesn't give in to the threat

Refer to Figure 9-5. With trade, the price of wagons in this country is

$5 with 40 wagons produced in this country and anther 50 wagons imported

Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

$625, and this is an increase in total surplus

Refer to Figure 9-5. With trade, producer surplus is

$80

Refer to Figure 9-13. With trade, producer surplus is

$900

Scenario 9-2 - For a small country called Boxland, the equation of the domestic demand curve forcardboard is Q^D=200-2P where Q^D represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. - For Boxland, the equation of the domestic supply curve for cardboard is D^S =-60+3P where Q^S represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard

benefits Boxlandian consumers by $721 & harms Boxlandian producers by $598.50

Refer to Figure 9-20. With trade, Vietnam will

export 1,500 units of rice

Refer to Figure 9-1. When trade in wool is allowed, producer surplus in Scotland

increase by the area B+D+G

A tariff on a product

increases the domestic quantity supplied