Microeconomics 9-1/9-2

Refer to Figure 9-23. With free trade, the domestic price and domestic quantity demanded are $90 and 5. $90 and 10. $120 and 5. $120 and 18.

$120 and 5.

When a country allows trade and becomes an importer of a good, consumer surplus and producer surplus both increase. consumer surplus and producer surplus both decrease. consumer surplus increases and producer surplus decreases. consumer surplus decreases and producer surplus increases.

Consumer surplus increases and producer surplus decreases.

Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland? It increases consumer surplus, decreases producer surplus, and increases total surplus. It increases consumer surplus, increases producer surplus, and increases total surplus. It increases consumer surplus, decreases producer surplus, and decreases total surplus. It decreases consumer surplus, increases producer surplus, and increases total surplus.

It increases consumer surplus, decreases producer surplus, and increases total surplus.

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

Vietnam has a comparative advantage over other countries and Vietnam will export textiles.

Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles? Incomes of domestic citizens increase, and tricycles are a normal good. Within this country, the price of a substitute for tricycles decreases. Within this country, the price of a complement to tricycles decreases. Wages increase for domestic workers who produce tricycles.

Within this country, the price of a substitute for tricycles decreases.

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that an import quota has no effect on consumer surplus, while a tariff decreases consumer surplus. an import quota has no effect on producer surplus, while a tariff decreases producer surplus. a tariff raises total surplus, while an import quota does not. a tariff raises revenue for that country's government, while an import quota does not.

a tariff raises revenue for that country's government, while an import quota does not.

Suppose a country abandons a no-trade policy in favor of a free-trade policy. If, as a result, the domestic price of pistachios decreases to equal the world price of pistachios, then that country becomes an exporter of pistachios. that country has a comparative advantage in producing pistachios. at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country. All of the above are correct.

at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country.

When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good, consumer surplus increases and total surplus increases in the market for that good. consumer surplus increases and total surplus decreases in the market for that good. consumer surplus decreases and total surplus increases in the market for that good. consumer surplus decreases and total surplus decreases in the market for that good.

consumer surplus increases and total surplus increases in the market for that good.

When a country allows trade and becomes an exporter of bicycles, domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country rises. domestic producers of bicycles are worse off, domestic consumers of bicycles are better off, and the economic well-being of the country falls. domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country rises. domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country falls.

domestic producers of bicycles are better off, domestic consumers of bicycles are worse off, and the economic well-being of the country rises.

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxes benefit the United States as a whole, because they generate revenue for the government. In addition, because the goods are priced below cost, the taxes do not harm domestic consumers. benefit the United States as a whole, because they generate revenue for the government and increase producer surplus. harm the United States as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue. harm the United States as a whole, because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue.

harm the United States as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue

Refer to Figure 9-19. With free trade, the country for which the figure is drawn will export 30 units of textiles. export 50 units of textiles. import 30 units of textiles. import 50 units of textiles.

import 50 units of textiles.

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

other countries have a comparative advantage over Mexico and Mexico will import beets.

When the nation of Duxembourg allows trade and becomes an importer of software, residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises. residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls. residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises. residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls.

residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises.

Domestic producers of a good become worse off, and domestic consumers of a good become better off, when a country begins allowing international trade in that good and the country becomes an importer of the good as a result. the world price exceeds the domestic price of the good that prevailed before international trade was allowed. the country in question has a comparative advantage, relative to other countries, in producing the good. total surplus does not change as a result.

the country becomes an importer of the good as a result.

Refer to Figure 9-16. The area C + D + E + F represents the decrease in consumer surplus caused by the tariff. the decrease in total surplus caused by the tariff. the deadweight loss of the tariff minus government revenue raised by the tariff. the deadweight loss of the tariff plus government revenue raised by the tariff.

the decrease in consumer surplus caused by the tariff.