Question 1

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. The tariff results in a net loss to society equal to area(s)

Accepted Answer

The tariff results in a net loss to society equal to the areas of deadweight loss, which are represented by the triangles DBE and FCG. These areas represent the efficiency loss in the market due to the tariff, as it leads to a reduction in the quantity of goods traded and an increase in the price, causing losses in consumer and producer surplus that are not offset by any gains.

Question 2

Exhibit 33-11 -Refer to Exhibit 33-11. If the world price (P_W) is operational in the market, then U.S. imports equal

Accepted Answer

The answer of Exhibit 33-11
​
 
-Refer to Exhibit 33-11. If...

Question 3

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. In the no specialization-no trade case, suppose country X produces and consumes 100 units of good A and 20 units of good B. Country Y produces and consumes 20 units of good A and 60 units of good B. If the two countries specialize and trade, and the actual amounts traded are 125 units of good A for 25 units of good B, how many more units of good A will country X consume by specializing and trading?

Accepted Answer

Country X will consume 125 units of good A after specialization and trade, which is 25 units more than the 100 units it consumed before.

Question 4

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Accepted Answer

The opportunity cost of producing one unit of good B in country X is determined by the slope of the production possibility frontier (PPF). Without the specific exhibit (Exhibit 33-9), we cannot directly calculate or visualize the slope. However, given the context of opportunity cost in economics, it generally refers to what is foregone to produce an additional unit of another good. If the correct answer is E (10), it implies that to produce one more unit of good B, country X has to give up 10 units of good A. This is a conceptual understanding based on the principle of opportunity cost in economics.

Question 5

Exhibit 33-11 -Refer to Exhibit 33-11. A tariff raises the price in the market from P_W to P_{W + T}. As a result, U.S. domestic sales rise from __________.

Accepted Answer

A tariff increases the domestic price, leading to an increase in domestic production from Q1 to Q3 as domestic producers supply more at the higher price.

Question 6

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. Which of the following statements is true?

Accepted Answer

Comparative advantage is determined by which country can produce a good at a lower opportunity cost. Without seeing Exhibit 33-9, we can infer that if both statements A and B are true, it means each country has a comparative advantage in different goods, suggesting specialization and trade would benefit both. Statement C logically follows from A, as it suggests specialization based on comparative advantage. Thus, all statements are consistent with the principles of comparative advantage in international trade.

Question 7

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. A quota is imposed and imports are Q₄ - Q₃. Importers gain revenues equal to the area __________.

Accepted Answer

Importers gain revenues equal to the area GHJK because this area represents the difference between the world price and the domestic price over the quantity of imports allowed by the quota.

Question 8

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. In the no specialization-no trade case, suppose country X produces and consumes 100 units of good A and 20 units of good B. Country Y produces and consumes 20 units of good A and 60 units of good B. If the two countries specialize and trade, and the actual amounts traded are 125 units of good A for 25 units of good B, how many more units of good B will country X consume by specializing and trading?

Accepted Answer

Country X initially consumes 20 units of good B. After specializing and trading, it trades away 125 units of good A to receive 25 units of good B. This means Country X now consumes its original 20 units of good B plus the 25 units it received from trade, totaling 45 units of good B. Therefore, the increase in consumption of good B for Country X is 25 units (45-20), which is an increase of 5 more units than its initial consumption.

Question 9

A tariff is imposed on strawberries. The tariff will ___________ the price of strawberries in the domestic market, _____________ the quantity of strawberries imported in the domestic market, and ____________ consumers' surplus.

Accepted Answer

A tariff on strawberries will raise the price of strawberries in the domestic market because the cost of importing them becomes higher. This, in turn, will lower the quantity of strawberries imported as the higher prices reduce demand or make domestic alternatives more competitive. Finally, the increase in prices reduces consumers' surplus because consumers are paying more for strawberries or consuming less of them.

Question 10

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Accepted Answer

The answer of Exhibit 33-9
​
 
-Refer to Exhibit 33-9. For...

Question 11

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Accepted Answer

The answer of Exhibit 33-9
​
 
-Refer to Exhibit 33-9. For...

Question 12

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Accepted Answer

The answer of Exhibit 33-9
​
 
-Refer to Exhibit 33-9. For...

Question 13

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. As a result of the tariff, producers' surplus __________ by the area __________.

Accepted Answer

The answer of Exhibit 33-11 -Refer to Exhibit 33-11. P_W...

Question 14

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. With the imposition of a quota that limits imports to Q₄ - Q₃, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

Accepted Answer

The net loss from the quota is represented by the deadweight loss areas, which are typically the triangles that represent lost consumer and producer surplus not offset by gains to others. In this case, LGK + JHI are the deadweight loss areas.

Question 15

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. In the no specialization-no trade case, suppose country X produces and consumes 100 units of good A and 20 units of good B. Country Y produces and consumes 20 units of good A and 60 units of good B. If the two countries specialize and trade, and the actual amounts traded are 125 units of good A for 25 units of good B, how many more units of good A will country Y consume by specializing and trading?

Accepted Answer

Country Y will consume 105 more units of good A by specializing and trading. In the no specialization-no trade case, country Y consumes 20 units of good A. After specialization and trade, country Y consumes 125 units of good A (20 units produced domestically plus 105 units imported). Therefore, country Y consumes 105 more units of good A by specializing and trading.

Question 16

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q₄ - Q₃, price will rise to

Accepted Answer

The quota reduces the supply of imports, shifting the supply curve to the left. This causes the price to rise to P1.

Question 17

Exhibit 33-10
 
-Refer to Exhibit 33-10. Who has the comparative advantage when it comes to mowing lawns?

Accepted Answer

The answer of Exhibit 33-10
 
-Refer to Exhibit 33-10. Who...

Question 18

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. Tariff revenues equal the area

Accepted Answer

Tariff revenues are represented by the area between the world price (P_W) and the world price plus tariff (P_{W + T}), over the quantity of imports. This is the area EBCF.

Question 19

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area

Accepted Answer

The answer of Exhibit 33-11 -Refer to Exhibit 33-11. P_W...

Question 20

Exhibit 33-9
​
 
-Refer to Exhibit 33-9. In the no specialization-no trade case, suppose country X produces and consumes 100 units of good A and 20 units of good B. Country Y produces and consumes 20 units of good A and 60 units of good B. If the two countries specialize and trade, and the actual amounts traded are 125 units of good A for 25 units of good B, how many more units of good B will country Y consume by specializing and trading?

Accepted Answer

The answer of Exhibit 33-9
​
 
-Refer to Exhibit 33-9. In...

Quiz 33: International Trade

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. The tariff results in a net loss to society equal to area(s)

Exhibit 33-11 -Refer to Exhibit 33-11. If the world price (P_W) is operational in the market, then U.S. imports equal

Exhibit 33-9 -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Exhibit 33-11 -Refer to Exhibit 33-11. A tariff raises the price in the market from P_W to P_{W + T}. As a result, U.S. domestic sales rise from __________.

Exhibit 33-9 -Refer to Exhibit 33-9. Which of the following statements is true?

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. A quota is imposed and imports are Q₄ - Q₃. Importers gain revenues equal to the area __________.

A tariff is imposed on strawberries. The tariff will _____ the price of strawberries in the domestic market, _ the quantity of strawberries imported in the domestic market, and ______ consumers' surplus.

Exhibit 33-9 -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Exhibit 33-9 -Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Exhibit 33-9 -Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. As a result of the tariff, producers' surplus by the area .

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. With the imposition of a quota that limits imports to Q₄ - Q₃, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q₄ - Q₃, price will rise to

Exhibit 33-10 -Refer to Exhibit 33-10. Who has the comparative advantage when it comes to mowing lawns?

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. Tariff revenues equal the area

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area

Quiz 33: International Trade

Exhibit 33-11 ​ -Refer to Exhibit 33-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. The tariff results in a net loss to society equal to area(s)

Exhibit 33-11 ​ -Refer to Exhibit 33-11. If the world price (PW) is operational in the market, then U.S. imports equal

Exhibit 33-9 ​ -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Exhibit 33-11 ​ -Refer to Exhibit 33-11. A tariff raises the price in the market from PW to PW + T. As a result, U.S. domestic sales rise from __________.

Exhibit 33-9 ​ -Refer to Exhibit 33-9. Which of the following statements is true?

Exhibit 33-12 ​ -Refer to Exhibit 33-12. PW is the price that exists in a free world market. A quota is imposed and imports are Q4 - Q3. Importers gain revenues equal to the area __________.

A tariff is imposed on strawberries. The tariff will ___________ the price of strawberries in the domestic market, _____________ the quantity of strawberries imported in the domestic market, and ____________ consumers' surplus.

Exhibit 33-9 ​ -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Exhibit 33-9 ​ -Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Exhibit 33-9 ​ -Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Exhibit 33-11 ​ -Refer to Exhibit 33-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. As a result of the tariff, producers' surplus __________ by the area __________.

Exhibit 33-12 ​ -Refer to Exhibit 33-12. PW is the price that exists in a free world market. With the imposition of a quota that limits imports to Q4 - Q3, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

Exhibit 33-12 ​ -Refer to Exhibit 33-12. PW is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q4 - Q3, price will rise to

Exhibit 33-10 -Refer to Exhibit 33-10. Who has the comparative advantage when it comes to mowing lawns?

Exhibit 33-11 ​ -Refer to Exhibit 33-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. Tariff revenues equal the area

Exhibit 33-11 ​ -Refer to Exhibit 33-11. PW is the price that exists in the market before a tariff is imposed and PW + T is the price that exists in the market after a tariff is imposed. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. The tariff results in a net loss to society equal to area(s)

Exhibit 33-11 -Refer to Exhibit 33-11. If the world price (P_W) is operational in the market, then U.S. imports equal

Exhibit 33-9 -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Exhibit 33-11 -Refer to Exhibit 33-11. A tariff raises the price in the market from P_W to P_{W + T}. As a result, U.S. domestic sales rise from __________.

Exhibit 33-9 -Refer to Exhibit 33-9. Which of the following statements is true?

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. A quota is imposed and imports are Q₄ - Q₃. Importers gain revenues equal to the area __________.

A tariff is imposed on strawberries. The tariff will _____ the price of strawberries in the domestic market, _ the quantity of strawberries imported in the domestic market, and ______ consumers' surplus.

Exhibit 33-9 -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Exhibit 33-9 -Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

Exhibit 33-9 -Refer to Exhibit 33-9. For country Y, the opportunity cost of producing one unit of good A is __________ unit(s) of good B.

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. As a result of the tariff, producers' surplus by the area .

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. With the imposition of a quota that limits imports to Q₄ - Q₃, consumers lose more than producers and importers gain. The result of the quota is a (net) loss represented by the area(s)

Exhibit 33-12 -Refer to Exhibit 33-12. P_W is the price that exists in a free world market. If the U.S. imposes a quota to reduce imports to Q₄ - Q₃, price will rise to

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. Tariff revenues equal the area

Exhibit 33-11 -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. Because of the tariff, consumers' surplus falls and producers' surplus rises by the area