Micro. Quiz #9

Scenario 9-1. For a small country called Boxland, the equation of the demand curve for cardboard is QD = 380 - 2P, 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 Q^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 9-1. 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

Figure 9-4. Refer to Figure 9-4. Total surplus in this market before trade is

A + B + C

Figure 9-4. Refer to Figure 9-4. Total surplus in this market after trade is

A + B + C + D

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 more nations

Figure 9-6. Refer to Figure 9-6. The deadweight loss created by the tariff is represented by the area

D + F

Figure 9-6. Refer to Figure 9-6. Government revenue raised by the tariff is represented by the area -- WRONG

E

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 decreases

Figure 9-6. Refer to Figure 9-6. The tariff

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

Figure 9-3. Refer to Figure 9-3. With trade and without a tariff,

the domestic price is equal to the world price

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 export copper

Figure 9-3. Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers -- WRONG.

gain $150 of producer surplus

Figure 9-3. Refer to Figure 9-3. The size of the tariff on roses is

$1

Scenario 9-1. For a small country called Boxland, the equation of the domestic demand curve for cardboard is Q^D = 380 - 2P, where Q^D represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a tan of cardboard. For Boxland, the equation of the domestic supply curve for the cardboard is Q^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 9-1. Suppose the world price of cardboard is $139. Then, relative to the no-trade situation, international trade in cardboard

harms Boxlandian consumers by $7,803.00 and benefits Boxlandian producers by $14,305.50

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

Figure 9-3. Refer to Figure 9-3. Without trade, the equilibrium price of roses is

$4 and the equilibrium quantity is 300 roses.

Figure 9-3. Refer to Figure 9-3. When the tariff is imposed, domestic consumers

lose surplus of $450