ECON 2333 - Quiz 4
-Refer to Figure 9-12.With trade,producer surplus is A)$900. B)$1,100. C)$1,500. D)$2,000.
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-Refer to Figure 9-14.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.
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-Refer to Figure 9-3.With trade,Jamaica A)imports 150 calculators. B)imports 250 calculators. C)exports 100 calculators. D)exports 250 calculators.
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-Refer to Figure 9-8.Total surplus in this market before trade is A)A + B. B)A + B + C. C)A + B + C + D. D)B + C + D.
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-Refer to Figure 9-12.Consumer surplus after trade is A)$3,600. B)$5,400. C)$7,200. D)$8,100.
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-Refer to Figure 9-8.Total surplus in this market after trade is A)A + B. B)A + B + C. C)A + B + C + D. D)B + C + D.
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Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-7.When the country for which the figure is drawn allows international trade in cars, A)consumer surplus increases by the area B. B)producer surplus decreases by the area B + D. C)total surplus increases by the area D. D)All of the above are correct.
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If the United States imposes a tariff on automobiles,then A)total surplus in the American automobile market decreases. B)producer surplus in the American automobile market increases. C)U.S.imports of foreign automobiles decrease. D)All of the above are correct.
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If the world price of textiles is higher than Vietnam's domestic price of textiles without trade,then Vietnam A)should import textiles. B)has a comparative advantage in textiles. C)should produce just enough textiles to meet its domestic demand. D)should refrain altogether from producing textiles.
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The price of a good that prevails in a world market is called the A)absolute price. B)relative price. C)comparative price. D)world price.
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The price of cotton that prevails in international markets is called the A)export price of cotton. B)import price of cotton. C)comparative-advantage price of cotton. D)world price of cotton.
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-Refer to Figure 9-1.This country A)has a comparative advantage in baskets. B)should export baskets. C)is a price taker in the world economy. D)All of the above are correct.
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-Refer to Figure 9-11.Consumer surplus after trade is A)$1,600. B)$2,400. C)$3,200. D)$3,600.
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-Refer to Figure 9-14.Producer surplus with the tariff is A)G. B)C + G. C)A + C + G. D)A + B + C + G.
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-Refer to Figure 9-4.Without trade,total surplus amounts to A)$122.50. B)$245. C)$367.50. D)$612.50.
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If the demand curve and the supply curve for a good are straight lines,then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by A)the area of one triangle. B)the area of one rectangle. C)the combined areas of two different triangles. D)the combined areas of two different rectangles.
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When a country allows international trade and becomes an importer of a good, A)domestic producers of the good become better off. B)domestic consumers of the good become worse off. C)the gains of the winners exceed the losses of the losers. D)All of the above are correct.
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When a country allows trade and becomes an exporter of a good, A)consumer surplus and producer surplus both increase. B)consumer surplus and producer surplus both decrease. C)consumer surplus increases and producer surplus decreases. D)consumer surplus decreases and producer surplus increases.
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A tariff on a product makes A)domestic sellers better off and domestic buyers worse off. B)domestic sellers worse off and domestic buyers worse off. C)domestic sellers better off and domestic buyers better off. D)domestic sellers worse off and domestic buyers better off.
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An import quota A)is preferable to a tariff since an import quota does not create a deadweight loss. B)is a tax on imported goods. C)reduces the welfare of domestic consumers. D)reduces the welfare of domestic producers.
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Figure 9-1 -Refer to Figure 9-1.Without trade,producer surplus is A)$210. B)$245. C)$455. D)$490.
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Figure 9-15. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-15.Government revenue raised by the tariff is represented by the area A)E. B)B + E. C)D + E + F. D)B + D + E + F.
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Within a country,the domestic price of a product will equal the world price if A)trade restrictions are imposed on the product. B)the country allows free trade. C)the country chooses to import, but not export, the product. D)the country chooses to export, but not import, the product.
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-Refer to Figure 9-10.Consumer surplus in this market after trade is A)a. B)C + B. C)A + B + D. D)B + C + D.
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-Refer to Figure 9-10.Consumer surplus in this market before trade is A)a. B)B + C. C)A + B + D. D)C.
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-Refer to Figure 9-10.Producer surplus in this market after trade is A)C. B)C + B. C)A + B + D. D)B + C + D.
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-Refer to Figure 9-10.Producer surplus in this market before trade is A)C. B)B + C. C)A + B + D. D)B + C + D.
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-Refer to Figure 9-10.Producer surplus plus consumer surplus in this market after trade is A)A + B. B)A + B + C. C)B + C + D. D)A + B + C + D.
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-Refer to Figure 9-10.Producer surplus plus consumer surplus in this market before trade is A)A + B. B)A + B + C. C)A + B + C + D. D)B + C + D.
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-Refer to Figure 9-10.The change in total surplus in this market because of trade is A)A, and this area represents a loss of total surplus. B)B, and this area represents a gain in total surplus. C)C, and this area represents a loss of total surplus. D)D, and this area represents a gain in total surplus.
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-Refer to Figure 9-11.Consumer surplus before trade is A)$1,600. B)$2,400. C)$3,200. D)$3,600.
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-Refer to Figure 9-11.Equilibrium price and equilibrium quantity without trade are A)$18 and 400. B)$18 and 800. C)$14 and 400. D)$14 and 600.
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-Refer to Figure 9-11.Producer surplus after trade is A)$4,800. B)$5,600. C)$6,400. D)$7,000.
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-Refer to Figure 9-11.Producer surplus before trade is A)$3,600. B)$4,400. C)$5,200. D)$6,600.
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-Refer to Figure 9-11.With trade allowed,this country A)exports 200 units of the good. B)exports 400 units of the good. C)imports 200 units of the good. D)exports 800 units of the good.
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-Refer to Figure 9-11.With trade,domestic production and domestic consumption,respectively,are A)600 and 400. B)800 and 400. C)400 and 600. D)400 and 800.
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-Refer to Figure 9-11.With trade,the domestic price and domestic quantity demanded are A)$18 and 400. B)$18 and 800. C)$14 and 400. D)$14 and 600.
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-Refer to Figure 9-12.Consumer surplus before trade is A)$1,600. B)$,2400. C)$3,200. D)$3,600.
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-Refer to Figure 9-12.Producer surplus before trade is A)$3,600. B)$4,400. C)$5,200. D)$6,600.
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-Refer to Figure 9-12.The price and domestic quantity demanded after trade are A)$8 and 300. B)$8 and 900. C)$14 and 900. D)$14 and 600.
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-Refer to Figure 9-12.With trade,domestic production and domestic consumption,respectively,are A)600 and 600. B)600 and 300. C)300 and 900. D)600 and 900.
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-Refer to Figure 9-12.With trade,the country A)exports 200 units of the good. B)exports 400 units of the good. C)imports 400 units of the good. D)imports 600 units of the good.
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-Refer to Figure 9-14.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.
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-Refer to Figure 9-14.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.
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-Refer to Figure 9-14.Consumer surplus with the tariff is A)a. B)A + B. C)A + C + G. D)A + B + C + D +E + F.
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-Refer to Figure 9-14.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.
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-Refer to Figure 9-14.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.
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-Refer to Figure 9-14.Producer surplus with trade and without a tariff is A)G. B)C + G. C)A + C + G. D)A + B + C + G.
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-Refer to Figure 9-14.The amount of government revenue created by the tariff is A)B. B)E. C)D + F. D)B + D + E + F.
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-Refer to Figure 9-14.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.
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-Refer to Figure 9-14.With the tariff,the quantity of saddles imported is A)Q₃ - Q₁. B)Q₃ - Q₂. C)Q₄ - Q₁. D)Q₄ - Q₂.
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-Refer to Figure 9-2.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.
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-Refer to Figure 9-2.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.
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-Refer to Figure 9-2.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.
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-Refer to Figure 9-2.With trade,China will A)import 100 pencil sharpeners. B)import 250 pencil sharpeners. C)export 150 pencil sharpeners. D)export 250 pencil sharpeners.
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-Refer to Figure 9-2.With trade,producer surplus in China is A)$800. B)$1,200. C)$1,800. D)$2,700.
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-Refer to Figure 9-3.Consumer surplus in Jamaica without trade is A)$375. B)$2,000. C)$2,250. D)$8,700.
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-Refer to Figure 9-3.The change in total surplus in Jamaica because of trade is A)$625, and this is an increase in total surplus. B)$750, and this is an increase in total surplus. C)$625, and this is a decrease in total surplus. D)$750, and this is a decrease in total surplus.
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-Refer to Figure 9-3.Which of the following statements is accurate? A)Consumer surplus with trade is $3,200. B)Producer surplus with trade is $375. C)The gains from trade amount to $800. D)The gains from trade are represented on the graph by the area bounded by the points (0, $12), (300, $12), (300, $7) and (0, $7).
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-Refer to Figure 9-4.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.
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-Refer to Figure 9-4.If this country allows free trade in wagons, A)consumers will gain more than producers will lose. B)producers will gain more than consumers will lose. C)producers and consumers will both gain equally. D)producers and consumers will both lose equally.
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-Refer to Figure 9-4.With trade,this country A)exports 20 wagons. B)exports 50 wagons. C)imports 30 wagons. D)imports 50 wagons.
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-Refer to Figure 9-4.With trade,total surplus is A)$245. B)$367.50. C)$607.50. D)$687.50.
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-Refer to Figure 9-5.The amount of deadweight loss caused by the tariff equals A)$100. B)$200. C)$400. D)$500.
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-Refer to Figure 9-5.The amount of revenue collected by the government from the tariff is A)$200. B)$400. C)$500. D)$600.
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-Refer to Figure 9-5.When a tariff is imposed in the market,domestic producers A)gain by $100. B)gain by $200. C)gain by $300. D)lose by $100.
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-Refer to Figure 9-8.Consumer surplus in this market after trade is A)a. B)A + B. C)A + B + D. D)C.
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-Refer to Figure 9-8.Consumer surplus in this market before trade is A)a. B)A + B. C)A + B + D. D)C.
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-Refer to Figure 9-8.Producer surplus in this market after trade is A)a. B)A + B. C)B + C + D. D)C.
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-Refer to Figure 9-8.Producer surplus in this market before trade is A)a. B)A + B. C)B + C + D. D)C.
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-Refer to Figure 9-8.The change in total surplus in this market because of trade is A)D, and this area represents a loss of total surplus because of trade. B)D, and this area represents a gain in total surplus because of trade. C)B + D, and this area represents a loss of total surplus because of trade. D)B + D, and this area represents a gain in total surplus because of trade.
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A major difference between tariffs and import quotas is that A)tariffs create deadweight losses, but import quotas do not. B)tariffs help domestic consumers, and import quotas help domestic producers. C)tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import. D)All of the above are correct.
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A quota is A)a tax placed on imports. B)a limit on the quantity of imports. C)a tax on exports to other countries. D)an excess of exports over imports.
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A tariff A)lowers the domestic price of the exported good below the world price. B)keeps the domestic price of the exported good the same as the world price. C)raises the domestic price of the imported good above the world price. D)lowers the domestic price of the imported good below the world price.
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A tariff is a tax placed on A)an exported good and it lowers the domestic price of the good below the world price. B)an exported good and it ensures that the domestic price of the good stays the same as the world price. C)an imported good and it lowers the domestic price of the good below the world price. D)an imported good and it raises the domestic price of the good above the world price.
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A tariff on a product A)enhances the economic well-being of the domestic economy. B)increases the domestic quantity supplied. C)increases the domestic quantity demanded. D)results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.
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A tariff on a product A)is a direct quantitative restriction on the amount of a good that can be imported. B)increases the domestic quantity supplied. C)increases domestic consumer surplus. D)All of the above are correct.
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Aquilonia has decided to end its policy of not trading with the rest of the world.When it ends its trade restrictions,it discovers that it is importing incense,exporting steel,and neither importing nor exporting rugs.We can conclude that Aquilonia's new free-trade policy has A)increased consumer surplus and producer surplus in the incense market. B)increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. C)decreased consumer surplus in both the steel and rug markets. D)decreased consumer surplus in the steel market and increased total surplus in the incense market.
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Both tariffs and import quotas A)increase the quantity of imports and raise the domestic price of the good. B)increase the quantity of imports and lower the domestic price of the good. C)decrease the quantity of imports and raise the domestic price of the good. D)decrease the quantity of imports and lower the domestic price of the good.
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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.As a result, A)Danish consumers of chips and Danish producers of chips both gain. B)Danish consumers of chips gain and Danish producers of chips lose. C)Danish consumers of chips lose and Danish producers of chips gain. D)Danish consumers of chips and Danish producers of chips both lose.
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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? A)More Danish-produced chips are sold in Denmark. B)More foreign-produced chips are sold in Denmark. C)Danish consumers of chips become better off. D)Total surplus in the Danish chip market increases.
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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? A)The price of chips in Denmark increases to $19; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases. B)The price of chips in Denmark increases to $17; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases. C)The price of chips in Denmark increases to $17; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark increases. D)The price of chips in Denmark increases to $15; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases.
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Figure 9-1 -Refer to Figure 9-1.With free trade,consumer surplus is A)$45. B)$80. C)$210. D)$245.
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Figure 9-1 -Refer to Figure 9-1.With free trade,producer surplus is A)$80.00. B)$210.00. C)$245.50. D)$472.50.
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Figure 9-1 -Refer to Figure 9-1.With free trade,this country will A)import 40 baskets. B)import 70 baskets. C)export 35 baskets. D)export 65 baskets.
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Figure 9-1 -Refer to Figure 9-1.Without trade,consumer surplus is A)$210. B)$245. C)$455. D)$490.
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Figure 9-13. On the diagram below, Q represents the quantity of computers and P represents the price of computers. -Refer to Figure 9-13.A result of this country allowing international trade in computers is as follows: A)The well-being of domestic computer producers is now higher in that they now sell more computers at a higher price per computer. B)The effect on the well-being of domestic computer consumers is unclear in that they now buy more computers, but at a higher price per computer. C)The effect on the well-being of the country is unclear in that domestic producer surplus increases, while the effect on domestic consumer surplus is unclear. D)All of the above are correct.
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Figure 9-13. On the diagram below, Q represents the quantity of computers and P represents the price of computers. -Refer to Figure 9-13.As a result of international trade in computers being allowed,which of the following statements is correct for the country for which the figure is drawn? A)Consumer surplus for domestic computer consumers decreases. B)The demand for computers by domestic computer consumers decreases. C)The losses of the domestic losers outweigh the gains of the domestic winners. D)Domestic computer producers sell fewer computers.
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Figure 9-13. On the diagram below, Q represents the quantity of computers and P represents the price of computers. -Refer to Figure 9-13.The country for which the figure is drawn A)has a comparative advantage relative to other countries in the production of computers and it will export computers. B)has a comparative advantage relative to other countries in the production of computers and it will import computers. C)has a comparative disadvantage relative to other countries in the production of computers and it will export computers. D)has a comparative disadvantage relative to other countries in the production of computers and it will import computers.
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Figure 9-13. On the diagram below, Q represents the quantity of computers and P represents the price of computers. -Refer to Figure 9-13.When the country for which the figure is drawn allows international trade in computers, A)consumer surplus changes from the area A + B + D to the area a. B)producer surplus changes from the area C to the area B + C + D. C)total surplus decreases by the area D. D)All of the above are correct.
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Figure 9-15. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-15.The deadweight loss created by the tariff is represented by the area A)B. B)D + F. C)D + E + F. D)B + D + E + F.
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Figure 9-15. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-15.The tariff A)decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. B)decreases producer surplus by the area C + D and decreases consumer surplus by the area D + E + F. C)increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. D)increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F.
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Figure 9-6. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-6.The equilibrium price and the equilibrium quantity of cheese in Wales before trade are A)P₁ and Q₂. B)P₁ and Q₁. C)P₀ and Q₀. D)P₀ and Q₁.
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Figure 9-6. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-6.Which of the following is a valid equation for Welsh consumer surplus with trade? A)Consumer surplus with trade = (1/2)(Q₀)(P₁ - P₀). B)Consumer surplus with trade = (1/2)(Q₀)(P₃ - P₀). C)Consumer surplus with trade = (1/2)(Q₁)(P₃ - P₁). D)None of the above is correct.
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Figure 9-6. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-6.Which of the following is a valid equation for Welsh producer surplus with trade? A)Producer surplus with trade = (1/2)P₀Q₀. B)Producer surplus with trade = (1/2)P₁Q₁. C)Producer surplus with trade = (1/2)P₁Q₂. D)None of the above is correct.
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Figure 9-6. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-6.Which of the following is a valid equation for the gains from trade? A)Gains from trade = (1/2)(P₁ - P₀)(Q₂ - Q₁). B)Gains from trade = (1/2)(P₁ - P₀)(Q₂ - Q₀) C)Gains from trade = (1/2)(P₁ - P₀)(Q₁ + Q₂). D)Gains from trade = (1/2)(Q₁)(P₃ - P₁).
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Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-7.In the country for which the figure is drawn,total surplus with international trade in cars A)is represented by the area A + B + C. B)is represented by the area A + B + D. C)is smaller than producer surplus without international trade in cars. D)is larger than total surplus without international trade in cars.
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Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-7.The country for which the figure is drawn A)has a comparative advantage relative to other countries in the production of cars and it will export cars. B)has a comparative advantage relative to other countries in the production of cars and it will import cars. C)has a comparative disadvantage relative to other countries in the production of cars and it will export cars. D)has a comparative disadvantage relative to other countries in the production of cars and it will import cars.
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Figure 9-7. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-7.The price corresponding to the horizontal dotted line on the graph represents the price of cars A)after trade is allowed. B)before trade is allowed. C)that maximizes total surplus when trade is allowed. D)that minimizes the well-being of domestic car producers when trade is allowed.
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Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.Kenya's gains from trade are represented by the area that is bounded by the points A)(0, P₀), (Q₀, P₀), (Q₂, P₁), and (0, P₁). B)(0, P₁), (0, P₂), (Q₀, P₀), and (Q₁, P₁). C)(Q₀, P₀), (Q₂, P₁), and (Q₁, P₁). D)(0, P₀), (0, P₂), and (Q₀, P₀).
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Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.The area bounded by the points (Q₀,P₀),(Q₂,P₁),and (Q₁,P₁)represents A)Kenya's gains from trade. B)the amount by which Kenya's gain in consumer surplus exceeds its loss in producer surplus due to trade. C)Kenya's gain in total surplus due to trade. D)All of the above are correct.
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Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.The area bounded by the points (Q₀,P₀),(Q₂,P₁),and (Q₁,P₁)represents A)Kenya's gains from trade. B)the amount by which Kenya's gain in producer surplus exceeds its loss in consumer surplus due to trade. C)Kenya's loss in total surplus due to trade. D)All of the above are correct.
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Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.The price and quantity of air conditioners in Kenya before trade is A)P₀ and Q₀. B)P₁ and Q₁. C)P₂ and Q₂. D)P₁ and Q₀.
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Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.When trade takes place,the quantity Q₂ - Q₁ is A)the number of air conditioners bought and sold in Kenya. B)the number of air conditioners produced in Kenya. C)the number of air conditioners exported by Kenya. D)the number of air conditioners imported by Kenya.
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Figure 9-9. The figure applies to the nation of Kenya and the good is air conditioners. -Refer to Figure 9-9.With trade,the equilibrium price of air conditioners and the equilibrium quantity of air conditioners demanded in Kenya are A)P₁ and Q₁. B)P₁ and Q₂. C)P₂ and Q₂. D)P₀ and Q₀.
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Import quotas and tariffs produce similar results.Which of the following is not one of those results? A)The domestic price of the good increases. B)Consumer surplus of domestic consumers increases. C)Producer surplus of domestic producers increases. D)A deadweight loss is experienced by the domestic country.
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Import quotas and tariffs produce some common results.Which of the following is not one of those common results? A)total surplus in the domestic country falls. B)Producer surplus in the domestic country increases. C)The domestic country experiences a deadweight loss. D)Revenue is raised for the domestic government.
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In analyzing the gains and losses from international trade,to say that Moldova is a small country is to say that A)Moldova can only import goods; it cannot export goods. B)Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. C)only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. D)Moldova is a price taker.
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Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,U.S.producers of tomatoes A)will be better off. B)will be worse off. C)will be unaffected. D)will experience a decrease in their collective producer surplus.
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Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,the A)price paid by American consumers of tomatoes is unchanged relative to the no-trade situation. B)total well-being of American producers of tomatoes is diminished relative to the no-trade situation. C)total well-being of American consumers of tomatoes is enhanced relative to the no-trade situation. D)total well-being of the United States is enhanced relative to the no-trade situation.
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Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,the price of tomatoes in the United States A)will increase, and this will cause consumer surplus to decrease. B)will decrease, and this will cause consumer surplus to increase. C)will be unaffected, and consumer surplus will be unaffected as well. D)could increase or decrease or be unaffected; this cannot be determined.
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Suppose Haiti has a comparative advantage over other countries in producing sugar,but other countries have an absolute advantage over Haiti in producing sugar.If trade in sugar is allowed,Haiti A)will import sugar. B)will export sugar. C)will either export sugar or export sugar, but it is not clear from the given information. D)would have nothing to gain either from exporting or importing sugar.
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Suppose Mexico imposes a tariff on lumber.For the tariff to have any effect,it must be the case that A)Mexico is an exporter of lumber. B)the domestic quantity supplied exceeds the domestic quantity 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.
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Tariffs and quotas are different in the sense that A)tariffs cause deadweight losses, while quotas do not cause deadweight losses. B)tariffs raise revenue for the government, while quotas do not raise revenue for the government. C)tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers. D)tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers.
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Turkey is an importer of goose-down pillows.The world price of these pillows is $50.Turkey imposes a $7 tariff on pillows.Turkey is a price-taker in the pillow market.As a result of the tariff, A)Turkish consumers of pillows become worse off and Turkish producers of pillows become worse off. B)Turkish consumers of pillows become worse off and Turkish producers of pillows become better off. C)Turkish consumers of pillows become better off and Turkish producers of pillows become worse off. D)Turkish consumers of pillows become better off and Turkish producers of pillows become better off.
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Turkey is an importer of goose-down pillows.The world price of these pillows is $50.Turkey imposes a $7 tariff on pillows.Turkey is a price-taker in the pillow market.As a result of the tariff,the price of goose-down pillows in Turkey A)remains at $50 and the quantity of goose-down pillows purchased in Turkey decreases. B)increases to $57 and the quantity of goose-down pillows purchased in Turkey decreases. C)increases to a new price between $50 and $57 and the quantity of goose-down pillows purchased in Turkey decreases. D)increases to a new price above $57 and the quantity of goose-down pillows purchased in Turkey remains the same.
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When a country moves away from a free trade position and imposes a tariff on imports,this causes A)a decrease in total surplus in the market. B)a decrease in producer surplus in the market. C)an increase in consumer surplus in the market. D)a decrease in revenue to the government.
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A logical starting point from which the study of international trade begins is A)the recognition that not all markets are competitive. B)the recognition that government intervention in markets sometimes enhances the economic welfare of the society. C)the principle of absolute advantage. D)the principle of comparative advantage.
D
-Refer to Figure 9-5.Without trade,the equilibrium price of carnations is A)$8 and the equilibrium quantity is 300. B)$6 and the equilibrium quantity is 200. C)$6 and the equilibrium quantity is 400. D)$4 and the equilibrium quantity is 500.
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An important factor in the decline of the U.S.textile industry over the past 100 or so years is A)foreign competitors that could produce quality textile goods at low cost. B)lower prices of goods that are substitutes for clothing. C)a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good. D)the fact that the minimum wage in the U.S.has failed to keep pace with the cost of living.
A
-Refer to Figure 9-1.At the world price and with free trade, A)the domestic quantity of baskets demanded is greater than the domestic quantity of baskets supplied. B)the basket market is in equilibrium. C)the domestic demand for baskets is perfectly inelastic. D)both domestic producers of baskets and domestic consumers of baskets are better off than they were without free trade.
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-Refer to Figure 9-1.The world price for baskets represents A)the demand for baskets from the rest of the world. B)the supply of baskets from the rest of the world. C)the level of inefficiency in the domestic market caused by trade. D)the gap between domestic quantity demanded and domestic quantity supplied and the resulting shortage.
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-Refer to Figure 9-2.The increase in total surplus in China when trade becomes allowed is A)$400. B)$500. C)$600. D)$750.
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-Refer to Figure 9-4.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of wagon wheels within this country,given that wagons and wagon wheels are complements? A)The quantity of wagons that this country imports would increase. B)The quantity of wagons that this country imports would decrease, but the country would still be an importer of wagons. C)This country would switch from being an importer of wagons to an exporter of wagons. D)The domestic price without trade would move closer to the world price.
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-Refer to Figure 9-4.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 wagons to an exporter of wagons? A)Incomes of domestic citizens increase, and wagons are a normal good. B)Within this country, the price of a substitute for wagons decreases. C)Within this country, the price of a complement to wagons decreases. D)Wages increase for domestic workers who produce wagons.
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-Refer to Figure 9-4.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.
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-Refer to Figure 9-4.Total surplus with trade exceeds total surplus without trade by A)$60. B)$75. C)$135. D)$210.
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-Refer to Figure 9-4.With trade,consumer surplus is A)$245. B)$362.50. C)$367.50. D)$607.50.
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-Refer to Figure 9-4.With trade,producer surplus is A)$80. B)$150. C)$210. D)$245.
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-Refer to Figure 9-4.With trade,the price of wagons in this country is A)$8, with 70 wagons being produced in this country, 20 of which are exported. B)$8, with 90 wagons being produced in this country, 50 of which are exported. C)$5, with 40 wagons being produced in this country and another 30 wagons being imported. D)$5, with 40 wagons being produced in this country and another 50 wagons being imported.
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-Refer to Figure 9-4.Without trade,consumer surplus amounts to A)$210.50. B)$245.50. C)$367.50. D)$607.50.
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-Refer to Figure 9-4.Without trade,producer surplus amounts to A)$210. B)$245. C)$450. D)$455.
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-Refer to Figure 9-5.Before the tariff is imposed,this country A)imports 200 carnations. B)imports 400 carnations. C)exports 200 carnations. D)exports 400 carnations.
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-Refer to Figure 9-5.The imposition of a tariff on carnations A)increases the number of carnations imported by 100. B)increases the number of carnations imported by 200. C)decreases the number of carnations imported by 200. D)decreases the number of carnations imported by 400.
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-Refer to Figure 9-5.The size of the tariff on carnations is A)$8 per dozen. B)$6 per dozen. C)$4 per dozen. D)$2 per dozen.
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-Refer to Figure 9-5.When the tariff is imposed,domestic consumers A)lose by $500. B)lose by $900. C)gain by $500. D)gain by $900.
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-Refer to Figure 9-5.With trade and without a tariff, A)the domestic price is equal to the world price. B)carnations are sold at $8 in this market. C)there is a shortage of 400 carnations in this market. D)this country imports 200 carnations.
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A country has a comparative advantage in a product if the world price is A)lower than that country's domestic price without trade. B)higher than that country's domestic price without trade. C)equal to that country's domestic price without trade. D)not subject to manipulation by organizations that govern international trade.
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A tax on an imported good is called a A)quota. B)tariff. C)supply tax. D)trade tax.
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After a country goes from disallowing trade in sugar with other countries to allowing trade in sugar with other countries, A)the domestic price of sugar will be greater than the world price of sugar. B)the domestic price of sugar will be lower than the world price of sugar. C)the domestic price of sugar will equal the world price of sugar. D)The world price of sugar does not matter; the domestic price of sugar prevails.
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Assume,for Canada,that the domestic price of steel without international trade is higher than the world price of steel.This suggests that,in the production of steel, A)Canada has a comparative advantage over other countries and Canada will import steel. B)Canada has a comparative advantage over other countries and Canada will export steel. C)other countries have a comparative advantage over Canada and Canada will import steel. D)other countries have a comparative advantage over Canada and Canada will export steel.
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Assume,for France,that the domestic price of tea without international trade is higher than the world price of tea.This suggests that A)other countries have a comparative advantage over France in producing tea. B)France has an absolute advantage over other countries in producing tea. C)France will export tea if international trade is allowed. D)French tea buyers will become worse off if international trade is allowed.
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Assume,for the U.S.,that the domestic price of beef without international trade is lower than the world price of beef.This suggests that,in the production of beef, A)the U.S.has a comparative advantage over other countries and the U.S.will export beef. B)the U.S.has a comparative advantage over other countries and the U.S.will import beef. C)other countries have a comparative advantage over the U.S.and the U.S.will export beef. D)other countries have a comparative advantage over the U.S.and the U.S.will import beef.
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Figure 9-1 -Refer to Figure 9-1.As a result of trade,total surplus increases by A)$80. B)$97.50. C)$162.50. D)$495.50.
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Figure 9-1 -Refer to Figure 9-1.If this country chooses to trade,the price of baskets in this country will be A)$10 and 40 baskets will be sold domestically. B)$10 and 105 baskets will be domestically. C)$7 and 70 baskets will be sold domestically. D)$7 and 40 baskets will be sold domestically.
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Figure 9-4 -Refer to Figure 9-4.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.
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Figure 9-6. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-6.With trade,Wales A)imports Q₂ - Q₁ units of cheese. B)exports Q₂ - Q₁ units of cheese. C)imports Q₂ - Q₀ units of cheese. D)exports Q₂ - Q₀ units of cheese.
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Figure 9-6. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-6.With trade,the Welsh price of cheese and the Welsh quantity of cheese demanded are A)P₁ and Q₂. B)P₁ and Q₁. C)P₀ and Q₀. D)P₃ and Q₁.
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For any country that allows free trade, A)domestic quantity demanded is equal to domestic quantity supplied at the world price. B)domestic quantity demanded is greater than domestic quantity supplied at the world price. C)both producers and consumers in that country gain when domestic products are exported, but both groups lose when foreign products are imported. D)the domestic price is equal to the world price.
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For any country,if the world price of computers is higher than the domestic price of computers without trade,that country should A)export computers, since that country has a comparative advantage in computers. B)import computers, since that country has a comparative advantage in computers. C)neither export nor import computers, since that country cannot gain from trade. D)neither export nor import computers, since that country already produces computers at a low cost compared to other countries.
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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.
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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.
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Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,the United States A)will become an importer of tomatoes. B)will become an exporter of tomatoes. C)may become either an importer or an exporter of tomatoes, but this cannot be determined. D)will experience increases in both consumer surplus and producer surplus.
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Scenario 9-1 The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $600 per ton. The U.S. is a price-taker in the tomatoes market. -Refer to Scenario 9-1.If trade in tomatoes is allowed,the price of tomatoes in the United States A)will be greater than the world price. B)will be equal to the world price. C)will be less than the world price. D)could be greater than, equal to, or less than the world price; this cannot be determined.
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Suppose Scotland goes from being an isolated country to being an exporter of wool.As a result, A)consumer surplus of Scottish consumers of wool increases. B)producer surplus of Scottish producers of wool increases. C)total surplus of Scottish wool consumers and producers remains constant. D)it is reasonable to infer that other countries have a comparative advantage over Scotland in wool production.
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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 A)that country becomes an exporter of beans. B)that country has a comparative advantage in producing beans. C)at the world price, the quantity of beans supplied in that country exceeds the quantity of beans demanded in that country. D)All of the above are correct.
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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 A)that country becomes an importer of pistachios. B)that country has a comparative advantage in producing pistachios. C)at the world price, the quantity of pistachios supplied in that country exceeds the quantity of pistachios demanded in that country. D)All of the above are correct.
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Suppose a country begins to allow international trade in steel.Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel? A)The sum of consumer surplus and producer surplus for domestic traders of steel increases. B)The quantity of steel demanded by domestic consumers increases. C)Domestic producers of steel receive a higher price for steel. D)The losses of the losers exceed the gains of the winners.
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Suppose the United States exports cars to France and imports cheese from Switzerland.This situation suggests that A)the United States has a comparative advantage relative to Switzerland in producing cheese, and France has a comparative advantage relative to the United States in producing cars. B)the United States has a comparative advantage relative to France in producing cars, and Switzerland has a comparative advantage relative to the United States in producing cheese. C)the United States has an absolute advantage relative to Switzerland in producing cheese, and France has an absolute advantage relative to the United States in producing cars. D)the United States has an absolute advantage relative to France in producing cars, and Switzerland has an absolute advantage relative to the United States in producing cheese.
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The before-trade price of fish in Greece is $3.00 per pound.The world price of fish is $5.00 per pound.Greece is a price-taker in the fish market.If Greece allows trade in fish,then Greece will become an A)importer of fish and the price of fish in Greece will be $3.00. B)importer of fish and the price of fish in Greece will be $5.00. C)exporter of fish and the price of fish in Greece will be $3.00. D)exporter of fish and the price of fish in Greece will be $5.00.
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The before-trade price of fish in Greece is $3.00 per pound.The world price of fish is $5.00 per pound.Greece is a price-taker in the fish market.If Greece begins to allow trade in fish,its consumers of fish will become A)better off, its producers of fish will become better off, and on balance the citizens of Greece will become better off. B)worse off, its producers of fish will become better off, and on balance the citizens of Greece will become better off. C)worse off, its producers of fish will become better off, and on balance the citizens of Greece will become worse off. D)better off, its producers of fish will become worse off, and on balance the citizens of Greece will become worse off.
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The world price of a pound of T-bone steak is $9.00.Before Guatemala allowed trade in beef,the price of a pound of T-bone steak there was $12.00.Once Guatemala began allowing trade in beef with other countries,Guatemala began A)exporting T-bone steak and the price per pound in Guatemala remained at $12.00. B)exporting T-bone steak and the price per pound in Guatemala decreased to $9.00. C)importing T-bone steak and the price per pound in Guatemala remained at $12.00. D)importing T-bone steak and the price per pound in Guatemala decreased to $9.00.
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The world price of a simple electronic calculator is $5.00.Before Singapore allowed trade in calculators,the price of a calculator there was $4.00.Once Singapore began allowing trade in calculators with other countries,Singapore began A)importing calculators and the price of a calculator in Singapore increased to $5.00. B)importing calculators and the price of a calculator in Singapore remained at $4.00. C)exporting calculators and the price of a calculator in Singapore increased to $5.00. D)exporting calculators and the price of a calculator in Singapore remained at $4.00.
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Trade among nations is ultimately based on A)absolute advantage. B)strategic advantage. C)comparative advantage. D)technical advantage.
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Trade raises the economic well-being of a nation in the sense that A)the gains of the winners exceed the losses of the losers. B)everyone in an economy gains from trade. C)since countries can choose what products to trade, they will pick those products that are most beneficial to society. D)the nation joins the international community when it begins to engage in trade.
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When a country allows international trade and becomes an exporter of a good, A)domestic producers of the good become better off. B)domestic consumers of the good become worse off. C)the gains of the winners exceed the losses of the losers. D)All of the above are correct.
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When a country allows trade and becomes an exporter of a good, A)domestic producers gain and domestic consumers lose. B)domestic producers lose and domestic consumers gain. C)domestic producers and domestic consumers both gain. D)domestic producers and domestic consumers both lose.
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When a country allows trade and becomes an exporter of a good, A)the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good. B)the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good. C)the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good. D)the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good.
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When a country allows trade and becomes an exporter of a good,which of the following is not a consequence? A)The price paid by domestic consumers of the good increases. B)The price received by domestic producers of the good increases. C)The losses of domestic consumers of the good exceed the gains of domestic producers of the good. D)The gains of domestic producers of the good exceed the losses of domestic consumers of the good.
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When a country allows trade and becomes an importer of a good, A)both domestic producers and domestic consumers become better off. B)domestic producers become better off, and domestic consumers become worse off. C)domestic producers become worse off, and domestic consumers become better off. D)both domestic producers and domestic consumers become worse off.
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When a country allows trade and becomes an importer of a good, A)consumer surplus and producer surplus both increase. B)consumer surplus and producer surplus both decrease. C)consumer surplus increases and producer surplus decreases. D)consumer surplus decreases and producer surplus increases.
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When a country allows trade and becomes an importer of a good, A)everyone in the country benefits. B)the gains of the winners exceed the losses of the losers. C)the losses of the losers exceed the gains of the winners. D)everyone in the country loses.
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When a country allows trade and becomes an importer of bottled water,which of the following is not a consequence? A)The gains of domestic consumers of bottled water exceed the losses of domestic producers of bottled water. B)The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water. C)The price paid by domestic consumers of bottled water decreases. D)The price received by domestic producers of bottled water decreases.
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When a country allows trade and becomes an importer of steel, A)the losses of the domestic producers of steel exceed the gains of the domestic consumers of steel. B)the losses of the domestic consumers of steel exceed the gains of the domestic producers of steel. C)the gains of the domestic producers of steel exceed the losses of the domestic consumers of steel. D)the gains of the domestic consumers of steel exceed the losses of the domestic producers of steel.
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When a nation first begins to trade with other countries and the nation becomes an exporter of corn, A)this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade. B)this is an indication that the nation has a comparative advantage in producing corn. C)the nation's consumers of corn become worse off and the nation's producers of corn become better off. D)All of the above are correct.
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When a nation first begins to trade with other countries and the nation becomes an importer of soybeans, A)this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. B)this is an indication that the nation has a comparative advantage in producing soybeans. C)the nation's producers of soybeans become worse off and the nation's consumers of soybeans become better off. D)All of the above are correct.
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When the nation of Duxembourg allows trade and becomes an importer of software, A)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. B)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. C)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. D)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.
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When the nation of Econoland allows trade and becomes an exporter of televisions, A)residents of Econoland who produce televisions become worse off; residents of Econoland who buy televisions become better off; and the economic well-being of Econoland rises. B)residents of Econoland who produce televisions become worse off; residents of Econoland who buy televisions become better off; and the economic well-being of Econoland falls. C)residents of Econoland who produce televisions become better off; residents of Econoland who buy televisions become worse off; and the economic well-being of Econoland rises. D)residents of Econoland who produce televisions become better off; residents of Econoland who buy televisions become worse off; and the economic well-being of Econoland falls.
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When,in our analysis of the gains and losses from international trade,we assume that a particular country is small,we are A)assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries. B)assuming there is no demand for that country's domestically-produced goods by other countries. C)assuming international trade can benefit producers, but not consumers, in that country. D)making an assumption that is not necessary to analyze the gains and losses from international trade.
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When,in our analysis of the gains and losses of international trade,we assume that a country is small,we are in effect assuming that the country A)cannot experience significant gains or losses by trading with other countries. B)cannot have a significant comparative advantage over other countries. C)cannot affect world prices by trading with other countries. D)All of the above are correct.
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Which of the following statements is true? A)Free trade benefits a country when it exports but harms it when it imports. B)"Voluntary" limits on Canadian exports of hogs are better for the United States than U.S.tariffs placed on Canadian hog exports. C)Tariffs and quotas differ in that tariffs work like a tax and therefore impose deadweight losses, whereas quotas do not impose deadweight losses. D)Free trade benefits a country both when it exports and when it imports.
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With which of the Ten Principles of Economics is the study of international trade most closely connected? A)People face tradeoffs. B)Trade can make everyone better off. C)Governments can sometimes improve market outcomes. D)Prices rise when the government prints too much money.
B
