International Trade

Refer to Figure 9-3. The increase in total surplus in China when trade is allowed is a. $400. b. $500. c. $600. d. $750.

B

Refer to Figure 9-15. Producer surplus with trade and without a tariff is a. G. b. C + G. c. A + C + G. d. A + B + C + G.

A

Refer to Figure 9-5. If this country allows free trade in wagons, a. consumers will gain and producers will lose. b. consumers will lose and producers will gain. c. both consumers and producers will gain. d. both consumers and producers will lose.

A

Refer to Figure 9-5. With trade, producer surplus is a. $80. b. $150. c. $210. d. $245.

A

Refer to Figure 9-15. Producer surplus with the tariff is a. G. b. C + G. c. A + C + G. d. A + B + C + G.

B

Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to a. B. b. E. c. D + F. d. B + D + E + F.

C

Refer to Figure 9-3. With trade, producer surplus in China is a. $800. b. $1,200. c. $1,800. d. $2,700.

D

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, 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.

A

If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price, a. the country will be an exporter of the good. b. the country will be an importer of the good. c. the country will be neither an exporter nor an importer of the good. d. Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.

A

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price, a. the country will be an exporter of the good. b. the country will be an importer of the good. c. the country will be neither an exporter nor an importer of the good. d. Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.

B

Refer to Figure 9-15. Consumer surplus with the tariff is a. A. b. A + B. c. A + C + G. d. A + B + C + D +E + F.

B

Refer to Figure 9-15. The amount of government revenue created by the tariff is a. B. b. E. c. D + F. d. B + D + E + F.

B

Refer to Figure 9-15. With the tariff, the quantity of saddles imported is a. Q3 - Q1. b. Q3 - Q2. c. Q4 - Q1. d. Q4 - Q2.

B

Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are a. P1 and Q1. b. P1 and Q4. c. P2 and Q2. d. P2 and Q3.

B

Refer to Figure 9-3. Relative to a no-trade situation, which of the following comes with trade? a. Consumer surplus increases by $1,800 and producer surplus increases by $1,600. b. Consumer surplus decreases by $1,000 and producer surplus increases by $1,500. c. Consumer surplus decreases by $1,000 and producer surplus increases by $1,750. d. Total surplus increases by $400.

B

Refer to Figure 9-5. The horizontal line at the world price of wagons represents the a. demand for wagons from the rest of the world. b. supply of wagons from the rest of the world. c. level of inefficiency in the domestic market caused by trade. d. surplus in the domestic wagon market.

B

Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by a. $60. b. $75. c. $135. d. $210.

B

Refer to Figure 9-5. Without trade, producer surplus amounts to a. $210. b. $245. c. $450. d. $455.

B

Assume, for Singapore, that the domestic price of soybeans without international trade is higher than the world price of soybeans. This suggests that, in the production of soybeans, a. Singapore has a comparative advantage over other countries and Singapore will import soybeans. b. Singapore has a comparative advantage over other countries and Singapore will export soybeans. c. other countries have a comparative advantage over Singapore and Singapore will import soybeans. d. other countries have a comparative advantage over Singapore and Singapore will export soybeans.

C

Refer to Figure 9-3 If China were to abandon a no-trade policy in favor of a free-trade policy, a. Chinese producers of pencil sharpeners would become worse off. b. Chinese consumers of pencil sharpeners would become better off. c. total surplus in the Chinese economy would increase. d. All of the above are correct.

C

Refer to Figure 9-15. For the saddle market, area B represents a. government's revenue from the tariff. b. the deadweight loss of the tariff. c. the increase in producer surplus, relative to the free-trade situation, as a result of the tariff. d. None of the above is correct.

D

Refer to Figure 9-15. For the saddle market, area E represents a. government's revenue from the tariff. b. producer surplus after the tariff becomes effective. c. the decrease in consumer surplus, relative to the free-trade situation, as a result of the tariff. d. the decrease in total surplus, relative to the free-trade situation, as a result of the tariff.

A

Refer to Figure 9-3. With no international trade, a. the equilibrium price is $12 and the equilibrium quantity is 300. b. the equilibrium price is $16 and the equilibrium quantity is 200. c. the equilibrium price is $16 and the equilibrium quantity is 300. d. the equilibrium price is $16 and the equilibrium quantity is 450.

A

When a country that imports a particular good imposes an import quota on that good, 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.

B

Refer to Figure 9-5. The increase in total surplus resulting from trade is a. $60, since producer surplus increases by $180 and consumer surplus falls by $240. b. $60, since consumer surplus increases by $180 and producer surplus falls by $240. c. $75, since consumer surplus increases by $240 and producer surplus falls by $165. d. $75, since consumer surplus increases by $300 and producer surplus falls by $225.

C

Refer to Figure 9-5. Without trade, consumer surplus amounts to a. $210.50. b. $245.50. c. $367.50. d. $607.50.

C

Spain is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Spain imposes a $5 tariff on chips. As a result, a. Spanish consumers of chips and Spanish producers of chips both gain. b. Spanish consumers of chips gain and Spanish producers of chips lose. c. Spanish consumers of chips lose and Spanish producers of chips gain. d. Spanish consumers of chips and Spanish producers of chips both lose.

C

Suppose Iran imposes a tariff on lumber. For the tariff to have any effect, it must be the case that a. Iran is an exporter of lumber. b. the domestic quantity of lumber supplied exceeds the domestic quantity of lumber demanded at the world price without the tariff. c. the world price without the tariff is less than the price of lumber without trade. d. the world price without the tariff is greater than the price of lumber without trade.

C

1. A tariff is a a. limit on how much of a good can be exported. b. limit on how much of a good can be imported. c. tax on an exported good. d. tax on an imported good.

D

If the United States imports televisions and the U.S. government imposes a tariff on televisions, then a. total surplus in the American television market decreases. b. producer surplus in the American television market increases. c. U.S. imports of foreign televisions decrease. d. All of the above are correct.

D

Refer to Figure 9-15. A result of the tariff is that, relative to the free-trade situation, the quantity of saddles imported decreases by a. Q2 - Q1. b. Q3 - Q2. c. Q4 - Q3. d. Q4 - Q3 + Q2 - Q1.

D

Refer to Figure 9-15. Consumer surplus with trade and without a tariff is a. A. b. A + B. c. A + C + G. d. A + B + C + D + E + F.

D

Refer to Figure 9-15. With the tariff, the domestic price and domestic quantity demanded are a. P1 and Q1. b. P1 and Q4. c. P2 and Q2. d. P2 and Q3.

D

Refer to Figure 9-3. With trade, China will a. import 100 pencil sharpeners. b. import 250 pencil sharpeners. c. export 150 pencil sharpeners. d. export 250 pencil sharpeners.

D

Refer to Figure 9-5. With trade, consumer surplus is a. $245. b. $362.50. c. $367.50. d. $607.50.

D

Refer to Figure 9-5. With trade, the price of wagons in this country is a. $8, with 70 wagons produced in this country, 20 of which are exported. b. $8, with 90 wagons produced in this country, 50 of which are exported. c. $5, with 40 wagons produced in this country and another 30 wagons imported. d. $5, with 40 wagons produced in this country and another 50 wagons imported.

D

Refer to Figure 9-5. With trade, this country a. exports 20 wagons. b. exports 50 wagons. c. imports 30 wagons. d. imports 50 wagons.

D

Refer to Figure 9-5. With trade, total surplus is a. $245. b. $367.50. c. $607.50. d. $687.50.

D

Refer to Figure 9-5. Without trade, total surplus amounts to a. $122.50. b. $245. c. $367.50. d. $612.50.

D

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

D