Econ Quiz 9

For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then Boxland's gains from international trade in cardboard amount to

122.50

When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country cannot experience significant gains or losses by trading with other countries. cannot have a significant comparative advantage over other countries. cannot affect world prices by trading with other countries. All of the above are correct.

cannot affect world prices by trading with other countries.

When a country allows international trade and becomes an exporter of a good, domestic producers of the good become better off. domestic consumers of the good become worse off. the gains of the winners exceed the losses of the losers. All of the above are correct.

All of the above are correct.

Consider a country that imports a good from abroad. Which of the followment statements is TRUE? The greater the elasticity of demand, the greater the gains from trade If demand is perfectly inelastic, there are no gains from trade. If demand is perfectly inelastic, consumers do not benefit from trade. All of the above are true.

The greater the elasticity of demand, the greater the gains from trade

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? The sum of consumer surplus and producer surplus for domestic traders of steel increases. The quantity of steel demanded by domestic consumers increases. Domestic producers of steel receive a higher price for steel. The losses of the losers exceed the gains of the winners.

The sum of consumer surplus and producer surplus for domestic traders of steel increases.

Which of the following arguments for trade restrictions is often advanced? Trade restrictions make all Americans better off. Trade restrictions increase economic efficiency. Trade restrictions are necessary for economic growth. Trade restrictions are sometimes necessary for national security.

Trade restrictions are sometimes necessary for national security.

For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.

A tariff on a product makes domestic sellers better off and domestic buyers worse off. domestic sellers worse off and domestic buyers worse off. domestic sellers better off and domestic buyers better off. domestic sellers worse off and domestic buyers better off.

domestic sellers better off and domestic buyers worse off.

Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to cause these factories to pay the U.S. minimum wage. increase the rate of technological advance in poor countries so that they can afford to pay higher wages. increase poverty in poor countries and benefit U.S. firms which compete with these imports. harm U.S. firms which compete with these imports.

increase poverty in poor countries and benefit U.S. firms which compete with these imports.

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.