micro chapter 9

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began -:importing televisions and the price of a television in Paraguay decreased to $300. -importing televisions and the price of a television in Paraguay remained at $350. -exporting televisions and the price of a television in Paraguay decreased to $300. -exporting televisions and the price of a television in Paraguay remained at $350.

importing televisions and the price of a television in Paraguay decreased to $300.

Refer to Figure 9-6. The tariff -decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. -increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F -.creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. -increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

increases producer surplus by the area C, decreases consumer surplus by the area C + D + E + F, and decreases total surplus by the area D + F.

Refer to Figure 9-3. When the tariff is imposed, domestic consumers -lose surplus of $400. -lose surplus of $450. -gain surplus of $50. -gain surplus of $800.

lose surplus of $450.

Refer to Figure 9-3. With trade and without a tariff, -the domestic price is equal to the world price. -roses are sold at $4 in this market. -there is a shortage of 400 roses in this market. -this country imports 200 roses.

the domestic price is equal to the world price.

Refer to Figure 9-3. The size of the tariff on roses is Question options: -$4. -$3. -$2. -$1.

$1

Refer to Figure 9-3. Without trade, the equilibrium price of roses is -$4 and the equilibrium quantity is 300 roses. -$3 and the equilibrium quantity is 200 roses. -$3 and the equilibrium quantity is 400 roses. -$2 and the equilibrium quantity is 500 roses.

$4 and the equilibrium quantity is 300 roses.

For a small country called Boxland, the equation of the domestic demand curve for cardboard is QD = 380 − 2P, where QD 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 QS = -60 + 3P, where QS represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. Refer to Scenario 9-1. Suppose the world price of cardboard is $139 and international trade is allowed. Then Boxland's consumers demand -102 tons of cardboard and Boxland's producers supply 357 tons of cardboard. -102 tons of cardboard and Boxland's producers supply 204 tons of cardboard. -204 tons of cardboard and Boxland's producers supply 357 tons of cardboard. -204 tons of cardboard and Boxland's producers supply 204 tons of cardboard.

102 tons of cardboard and Boxland's producers supply 357 tons of cardboard.

Refer to Figure 9-4. Total surplus in this market after trade is -A + B -A + B + C. -A + B + C + D. -B + C + D.

A + B + C + D.

Refer to Figure 9-4. Total surplus in this market before trade is -A + B. -A + B + C. -A + B + C + D. -B + C + D.

A + B + C.

Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach? -A multilateral approach can reduce trade restrictions abroad as well as at home. -A multilateral approach has the potential to result in freer trade. -A multilateral approach requires the agreement of two or more nations. -A multilateral approach may have political advantages.

A multilateral approach requires the agreement of two or more nations.

Refer to Figure 9-6. The deadweight loss created by the tariff is represented by the area -B. -D + F. -D + E + F. -B + D + E + F.

D+F

Refer to Figure 9-6. Government revenue raised by the tariff is represented by the area -E. B + E. -D + E + F. -B + D + E + F.

E

Assume, for India, that the domestic price of copper without international trade is lower than the world price of copper. This suggests that, in the production of copper, -India has a comparative advantage over other countries and India will import copper. -India has a comparative advantage over other countries and India will export copper. -other countries have a comparative advantage over India and India will import copper. -other countries have a comparative advantage over India and India will export copper.

India has a comparative advantage over other countries and India will export copper.

When a country allows trade and becomes an exporter of silk, which of the following is not a consequence? -The price paid by domestic consumers of silk increases. -The price received by domestic producers of silk increases. -The price paid by domestic consumers of silk decreases. -The gains of domestic producers of silk exceed the losses of domestic consumers of silk

The price paid by domestic consumers of silk decreases.

Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers -gain $200 of producer surplus. -gain $150 of producer surplus. -gain $50 of producer surplus -.gain $100 of producer surplus.

gain $150 of producer surplus