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Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. With trade and a tariff, consumer surplus is A) $75,000 and producer surplus is $27,000. B) $63,000 and producer surplus is $12,000. C) $75,000 and producer surplus is $12,000. D) $63,000 and producer surplus is $27,000. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. With trade and a tariff, consumer surplus is


A) $75,000 and producer surplus is $27,000.
B) $63,000 and producer surplus is $12,000.
C) $75,000 and producer surplus is $12,000.
D) $63,000 and producer surplus is $27,000.

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

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Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. -Refer to Figure 9-29. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus? -Refer to Figure 9-29. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

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Without trade, consu...

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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. In the absence of trade, the equilibrium price of coffee in Guatemala is A) $30. B) $90. C) $110. D) $140. -Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is


A) $30.
B) $90.
C) $110.
D) $140.

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

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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


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.

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

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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) None of the above
F) All of the above

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Figure 9-11 Figure 9-11 -Refer to Figure 9-11. 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. -Refer to Figure 9-11. 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.

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

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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 amount of revenue collected by the government from the tariff is A) $50. B) $100. C) $150. D) $200. -Refer to Figure 9-24. Suppose the government imposes a tariff of $10 per unit. The amount of revenue collected by the government from the tariff is


A) $50.
B) $100.
C) $150.
D) $200.

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

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Honduras is an importer of goose-down pillows. The world price of these pillows is $50. Honduras imposes a $7 tariff on pillows. Honduras is a price-taker in the pillow market. As a result of the tariff, the price of goose-down pillows in Honduras


A) remains at $50 and the quantity of goose-down pillows purchased in Honduras decreases.
B) increases to $57 and the quantity of goose-down pillows purchased in Honduras decreases.
C) increases to a new price between $50 and $57 and the quantity of goose-down pillows purchased in Honduras decreases.
D) increases to a new price above $57 and the quantity of goose-down pillows purchased in Honduras remains the same.

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

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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. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is A) $36 and the equilibrium quantity of cardboard is 74 tons. B) $44 and the equilibrium quantity of cardboard is 88 tons. C) $52 and the equilibrium quantity of cardboard is 96 tons. D) $60 and the equilibrium quantity of cardboard is 100 tons. 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. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is A) $36 and the equilibrium quantity of cardboard is 74 tons. B) $44 and the equilibrium quantity of cardboard is 88 tons. C) $52 and the equilibrium quantity of cardboard is 96 tons. D) $60 and the equilibrium quantity of cardboard is 100 tons. 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. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is A) $36 and the equilibrium quantity of cardboard is 74 tons. B) $44 and the equilibrium quantity of cardboard is 88 tons. C) $52 and the equilibrium quantity of cardboard is 96 tons. D) $60 and the equilibrium quantity of cardboard is 100 tons. 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. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is A) $36 and the equilibrium quantity of cardboard is 74 tons. B) $44 and the equilibrium quantity of cardboard is 88 tons. C) $52 and the equilibrium quantity of cardboard is 96 tons. D) $60 and the equilibrium quantity of cardboard is 100 tons. 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. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is A) $36 and the equilibrium quantity of cardboard is 74 tons. B) $44 and the equilibrium quantity of cardboard is 88 tons. C) $52 and the equilibrium quantity of cardboard is 96 tons. D) $60 and the equilibrium quantity of cardboard is 100 tons. 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. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is A) $36 and the equilibrium quantity of cardboard is 74 tons. B) $44 and the equilibrium quantity of cardboard is 88 tons. C) $52 and the equilibrium quantity of cardboard is 96 tons. D) $60 and the equilibrium quantity of cardboard is 100 tons. represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is


A) $36 and the equilibrium quantity of cardboard is 74 tons.
B) $44 and the equilibrium quantity of cardboard is 88 tons.
C) $52 and the equilibrium quantity of cardboard is 96 tons.
D) $60 and the equilibrium quantity of cardboard is 100 tons.

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

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When the nation of Mooseland first permitted trade with other nations, domestic producers of sugar experienceda decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million We can conclude that


A) Mooseland became an exporter of sugar.
B) the overall economic well-being of participants in the sugar market in Mooseland fell because of trade.
C) consumer surplus in Mooseland increased by $7 million.
D) the opening of trade caused the domestic demand curve for sugar in Mooseland to shift to the right.

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

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Figure 9-11 Figure 9-11 -Refer to Figure 9-11. 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. -Refer to Figure 9-11. 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.

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

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Which of the following arguments for trade restrictions is often advanced?


A) Trade restrictions make all Americans better off.
B) Trade restrictions increase economic efficiency.
C) Trade restrictions are necessary for economic growth.
D) Trade restrictions are sometimes necessary for national security.

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

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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. From the figure it is apparent that A) Guatemala will export coffee if trade is allowed. B) Guatemala will import coffee if trade is allowed. C) Guatemala has nothing to gain either by importing or exporting coffee. D) the world price will fall if Guatemala begins to allow its citizens to trade with other countries. -Refer to Figure 9-1. From the figure it is apparent that


A) Guatemala will export coffee if trade is allowed.
B) Guatemala will import coffee if trade is allowed.
C) Guatemala has nothing to gain either by importing or exporting coffee.
D) the world price will fall if Guatemala begins to allow its citizens to trade with other countries.

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

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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. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus? -Refer to Figure 9-27. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

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Figure 9-13 Figure 9-13 -Refer to Figure 9-13. 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. -Refer to Figure 9-13. 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.

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

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Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. Figure 9-25 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $10 per unit. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The amount of revenue collected by the government from the tariff is A) $50. B) $100. C) $150. D) $200. -Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The amount of revenue collected by the government from the tariff is


A) $50.
B) $100.
C) $150.
D) $200.

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

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Some time ago, the nation of Republica opened up its paper market to international trade. Which of the following results of this policy change is consistent with the notion that Republica has a comparative advantage over other countries in producing paper?


A) The price of paper in Republica decreased as a result of the policy change.
B) Republica began exporting paper as a result of the policy change.
C) The domestic demand curve for paper shifted to the right as a result of the policy change.
D) The domestic quantity of paper demanded increased as a result of the policy change.

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

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When a country takes a multilateral approach to free trade, it


A) removes trade restrictions on its own.
B) reduces its trade restrictions while other countries do the same.
C) does not remove trade restrictions no matter what other countries do.
D) is willing to trade with multiple countries at once.

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

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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. With free trade, this country will A) import 50 calculators. B) import 100 calculators. C) export 50 calculators. D) export 100 calculators. -Refer to Figure 9-2. With free trade, this country will


A) import 50 calculators.
B) import 100 calculators.
C) export 50 calculators.
D) export 100 calculators.

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

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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 exporter of pistachios.
B) that country has a comparative advantage in producing pistachios.
C) at the world price, the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country.
D) All of the above are correct.

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

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