Application: International Trade 2305
72.
Refer to Figure 9-5. Without trade, consumer surplus amounts to
a. $810.
b. $1,620.
c. $3,240.
d. $6,480.
73.
Refer to Figure 9-5. Without trade, producer surplus amounts to
a. $810.
b. $1,620.
c. $3,240.
d. $6,480.
74.
Refer to Figure 9-5. Without trade, total surplus amounts to
a. $810.
b. $1,620.
c. $3,240.
d. $6,480.
75.
Refer to Figure 9-5. With trade, the price of tricycles in this country is
a.
$11, with 200 tricycles produced in this country and another 320 tricycles imported.
b.
$11, with 360 tricycles produced in this country and another 160 tricycles imported.
c.
$19, with 200 tricycles produced in this country and another 160 tricycles imported.
d.
$19, with 360 tricycles produced in this country and another 320 tricycles imported.
76.
Refer to Figure 9-5. With trade, consumer surplus is
a. $3,240.
b. $6,480.
c. $6,760.
d. $13,520.
77.
Refer to Figure 9-5. With trade, producer surplus is
a. $500.
b. $1,000.
c. $1,500.
d. $2,000.
78.
Refer to Figure 9-5. With trade, total surplus is
a. $3,240.
b. $6,480.
c. $7,760.
d. $15,520.
79.
Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by
a. $640.
b. $1,280.
c. $2,560.
d. $3,840.
80.
Refer to Figure 9-5. The increase in total surplus resulting from trade is
a.
$640, since consumer surplus increases by $1,760 and producer surplus falls by $1,120.
b.
$1,280, since consumer surplus increases by $3,520 and producer surplus falls by $2,240.
c.
$2,240, since consumer surplus increases by $3,240 and producer surplus falls by $1,000.
d.
$2,560, since consumer surplus increases by $7,040 and producer surplus falls by $4,480.
81.
Refer to Figure 9-5. If this country allows free trade in tricycles,
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.
82.
Refer to Figure 9-5. If this country allows free trade in tricycles,
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.
83.
Refer to Figure 9-5. Bearing in mind that this country is “small,” which of the following events
conceivably could cause the country to switch from being an importer of tricycles to an exporter
of tricycles?
a.
Incomes of domestic citizens increase, and tricycles are a normal good.
b.
Within this country, the price of a substitute for tricycles decreases.
c.
Within this country, the price of a complement to tricycles decreases.
d.
Wages increase for domestic workers who produce tricycles.
84.
Refer to Figure 9-5. Bearing in mind that this country is “small,” what would happen if there
were a decrease in
the price of tricycle helmets within this country, given that tricycles and tricycle helmets are
complements?
a.
The quantity of tricycles that this country imports would increase.
b.
The quantity of tricycles that this country imports would decrease, but the country would still be
an importer
of tricycles.
c.
This country would switch from being an importer of tricycles to an exporter of tricycles.
d.
The domestic price without trade would move closer to the world price.
2312 Application: International Trade
Figure 9-6
The figure illustrates the market for roses in a country.
85.
Refer to Figure 9-6. Without trade, the equilibrium price of roses is
a.
$4 and the equilibrium quantity is 300.
b.
$3 and the equilibrium quantity is 200.
c.
$3 and the equilibrium quantity is 400.
d.
$2 and the equilibrium quantity is 500.
86.
Refer to Figure 9-6. With trade and without a tariff,
a.
the domestic price is equal to the world price.
b.
roses are sold at $4 in this market.
c.
there is a shortage of 400 roses in this market.
d.
this country imports 200 roses.
87.
Refer to Figure 9-6. Before the tariff is imposed, this country
a.
imports 200 roses.
b.
imports 400 roses.
c.
exports 200 roses.
d.
exports 400 roses.
88.
Refer to Figure 9-6. The size of the tariff on roses is
a. $4.
b.
$2.
c.
$2.
d.
$1.
89.
Refer to Figure 9-6. The imposition of a tariff on roses
a.
increases the number of roses imported by 100.
b.
increases the number of roses imported by 200.
c.
decreases the number of roses imported by 200.
d.
decreases the number of roses imported by 400.
90.
Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is
a. $200.
b. $400.
c. $500.
d. $600.
91.
Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers
a.
gain $100 of producer surplus.
b.
gain $150 of producer surplus.
c.
gain $200 of producer surplus.
d.
gain $300 of producer surplus.
92.
Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals
a. $100.
b. $200.
c. $400.
d. $500.
93.
Refer to Figure 9-6. When the tariff is imposed, domestic consumers
a.
lose by $200.
b.
lose by $450.
c.
gain by $200.
d.
gain by $450.
94.
The before-trade price of fish in Germany is $8.00 per pound. The world price of fish is $6.00 per
pound. Germany
is a price-taker in the fish market. If Germany allows trade in fish, then Germany
will become an
a.
importer of fish and the price of fish in Germany will be $6.00.
b.
importer of fish and the price of fish in Germany will be $8.00.
c.
exporter of fish and the price of fish in Germany will be $6.00.
d.
exporter of fish and the price of fish in Germany will be $8.00.
95.
The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00
per pound.
Denmark is a price-taker in the fish market. If Denmark 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 Denmark
will become
better off.
b.
worse off, its producers of fish will become better off, and on balance the citizens of Denmark
will become
worse off.
c.
worse off, its producers of fish will become better off, and on balance the citizens of Denmark
will become
worse off.
d.
better off, its producers of fish will become worse off, and on balance the citizens of Denmark
will become
better off.
Figure 9-7. The figure applies to the nation of Wales and the good is cheese.
96.
Refer to Figure 9-7. 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.
97.
Refer to Figure 9-7. 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.
98.
Refer to Figure 9-7. 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.
99.
Refer to Figure 9-7. 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.
100.
Refer to Figure 9-7. 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.
101.
Refer to Figure 9-7. 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).
2322 Application: International Trade
Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price
of cars.
102.
Refer to Figure 9-8. 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.
103.
Refer to Figure 9-8. 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.
104.
Refer to Figure 9-8. 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.
105.
Refer to Figure 9-8. 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.
Figure 9-9