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Figure 9-9 Figure 9-9 -Refer to Figure 9-9. Producer surplus in this market before trade is A) A. B) A + B. C) B + C + D. D) d. -Refer to Figure 9-9. Producer surplus in this market before trade is


A) A.
B) A + B.
C) B + C + D.
D) d.

E) None of the above
F) A) and B)

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Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. Figure 9-24 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The deadweight loss caused by the tariff is A) $25. B) $50. C) $75. D) D) $100. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The deadweight loss caused by the tariff is


A) $25.
B) $50.
C) $75.
D)
D) $100.

E) C) and D)
F) D) and D)

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Figure 9-1 The figure illustrates the market for coffee in Guatemala. Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. When trade in coffee is allowed, consumer surplus in Guatemala A) increases by the area B + D. B) increases by the area C + F. C) decreases by the area B + D. D) decreases by the area D + G. -Refer to Figure 9-1. When trade in coffee is allowed, consumer surplus in Guatemala


A) increases by the area B + D.
B) increases by the area C + F.
C) decreases by the area B + D.
D) decreases by the area D + G.

E) A) and B)
F) None of the above

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Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. Figure 9-21 The following diagram shows the domestic demand and domestic supply for a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-21. With free trade, the domestic price and domestic quantity demanded are A) $30 and 1,200. B) $40 and 800. C) $30 and 800. D) $40 and 1,600. -Refer to Figure 9-21. With free trade, the domestic price and domestic quantity demanded are


A) $30 and 1,200.
B) $40 and 800.
C) $30 and 800.
D) $40 and 1,600.

E) A) and B)
F) All of the above

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Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade? -Refer to Figure 9-27. If the country allows free trade, how much are consumer surplus, producer surplus, and total surplus with trade?

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With trade, consumer...

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Figure 9-2 The figure illustrates the market for calculators in a country. Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, producer surplus is A) $423. B) $845. C) $1,690. D) $3,380. -Refer to Figure 9-2. Without trade, producer surplus is


A) $423.
B) $845.
C) $1,690.
D) $3,380.

E) All of the above
F) None of the above

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Scenario 9-2 -For a small country called Boxland, the equation of the domestic demand curve for cardboard is Scenario 9-2 -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 and international trade is allowed. Then Boxland's consumers demand A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. where Scenario 9-2 -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 and international trade is allowed. Then Boxland's consumers demand A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. Scenario 9-2 -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 and international trade is allowed. Then Boxland's consumers demand A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 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 Scenario 9-2 -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 and international trade is allowed. Then Boxland's consumers demand A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. where Scenario 9-2 -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 and international trade is allowed. Then Boxland's consumers demand A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. Scenario 9-2 -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 and international trade is allowed. Then Boxland's consumers demand A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard. B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard. C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard. D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard. 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 and international trade is allowed. Then Boxland's consumers demand


A) 110 tons of cardboard and Boxland's producers supply 75 tons of cardboard.
B) 110 tons of cardboard and Boxland's producers supply 96 tons of cardboard.
C) 96 tons of cardboard and Boxland's producers supply 75 tons of cardboard.
D) 96 tons of cardboard and Boxland's producers supply 96 tons of cardboard.

E) A) and D)
F) None of the above

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Relative to a situation in which domestic firms do not compete with foreign firms, firms in countries that engage in free trade


A) can realize economies of scale more fully.
B) have greater market power.
C) experience larger producer surplus.
D) All of the above are correct.

E) A) and B)
F) A) and C)

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For Country A, the world price of textiles exceeds the domestic equilibrium price of textiles. As a result, international trade allows sellers of textiles in Country A to experience greater producer surplus than they otherwise would experience.

A) True
B) False

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Figure 9-9 Figure 9-9 -Refer to Figure 9-9. Total surplus in this market before trade is A) A + B. B) A + B + C. C) A + B + C + D. D) B + C + D. -Refer to Figure 9-9. Total surplus in this market before trade is


A) A + B.
B) A + B + C.
C) A + B + C + D.
D) B + C + D.

E) None of the above
F) All of the above

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The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began


A) exporting almonds and the price per pound in Uruguay remained at $3.00.
B) exporting almonds and the price per pound in Uruguay increased to $4.50.
C) importing almonds and the price per pound in Uruguay remained at $3.00.
D) importing almonds and the price per pound in Uruguay increased to $4.50.

E) All of the above
F) A) and B)

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If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

A) True
B) False

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Figure 9-15 Figure 9-15 -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. -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.

E) A) and D)
F) B) and D)

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Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?


A) Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
B) Consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
C) Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50.
D) Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150.

E) None of the above
F) A) and B)

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Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The tariff A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F. B) 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. C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F. D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F. -Refer to Figure 9-16. The tariff


A) decreases producer surplus by the area C, decreases consumer surplus by the area C + D + E, and decreases total surplus by the area D + F.
B) 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.
C) creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F.
D) increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

E) C) and D)
F) All of the above

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Workers displaced by trade eventually find jobs in


A) another country.
B) the government sector.
C) the industries in which the country has a comparative advantage.
D) a different company in the same industry.

E) B) and D)
F) B) and C)

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Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is producer surplus? -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is producer surplus?

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With trade...

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Scenario 9-2 -For a small country called Boxland, the equation of the domestic demand curve for cardboard is Scenario 9-2 -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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. where Scenario 9-2 -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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. Scenario 9-2 -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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. 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 Scenario 9-2 -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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. where Scenario 9-2 -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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. Scenario 9-2 -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, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. 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, relative to the no-trade situation, international trade in cardboard


A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00.
B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50.
C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50.
D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00.

E) B) and C)
F) C) and D)

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If Honduras were to subsidize the production of wool blankets and sell them in Sweden at artificially low prices, the Swedish economy would be worse off.

A) True
B) False

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Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. -Refer to Figure 9-18. If Isoland allows international trade and if the world price of peaches is $5, then A) Isoland has a comparative advantage, relative to other countries, in producing peaches. B) Isoland will import peaches. C) consumer surplus with trade exceeds consumer surplus without trade. D) All of the above are correct. -Refer to Figure 9-18. If Isoland allows international trade and if the world price of peaches is $5, then


A) Isoland has a comparative advantage, relative to other countries, in producing peaches.
B) Isoland will import peaches.
C) consumer surplus with trade exceeds consumer surplus without trade.
D) All of the above are correct.

E) B) and C)
F) A) and C)

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