Question 1

Figure 9-7
The following diagram shows the domestic demand and domestic supply curves in a market.  ​
-Refer to Figure 9-7. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

Accepted Answer

The answer of Figure 9-7
The following diagram shows the domestic...

Question 2

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Accepted Answer

The answer of Suppose in the country of Jumanji that...

Question 3

Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?

Accepted Answer

The answer of Suppose in the country of Nash that...

Question 4

​If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

Accepted Answer

The answer of ​If we know that Canada exports maple...

Question 5

Figure 9-7
The following diagram shows the domestic demand and domestic supply curves in a market.  ​
-Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Accepted Answer

The answer of Figure 9-7
The following diagram shows the domestic...

Question 6

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

Accepted Answer

The answer of Suppose in the country of Nash that...

Question 7

A country has a comparative advantage in a product if the world price is _____ than that country's domestic price without trade.

Accepted Answer

The answer of A country has a comparative advantage in...

Question 8

​Imposing a tariff on the import of a good is preferable to a quota because a tariff produces revenue for the government, while a quota never produces any revenue for a government.

Accepted Answer

The answer of ​Imposing a tariff on the import of...

Question 9

Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Accepted Answer

The answer of Suppose the world price of coffee is...

Question 10

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Accepted Answer

The answer of Suppose the world price of coffee is...

Question 11

​There are only increases in total surplus when a country exports a good, since more units of the country's output of that good are produced.

Accepted Answer

Total surplus can increase both from exporting and importing goods. Exporting allows countries to specialize in the production of goods for which they have a comparative advantage, increasing total surplus. Importing allows countries to acquire goods more cheaply or of higher quality than could be produced domestically, also increasing total surplus.

Question 12

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Accepted Answer

The answer of Suppose in the country of Jumanji that...

Question 13

Figure 9-7
The following diagram shows the domestic demand and domestic supply curves in a market.  ​
-Refer to Figure 9-7. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Accepted Answer

The answer of Figure 9-7
The following diagram shows the domestic...

Question 14

​Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

Accepted Answer

Both tariffs and quotas can create deadweight losses by reducing the quantity of trade. A quota restricts the quantity directly, while a tariff does so by increasing the price, both leading to inefficiencies in the market.

Question 15

​We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

Accepted Answer

International trade allows countries to specialize in the production of goods and services in which they have a comparative advantage, leading to increased efficiency and higher overall well-being. While there may be losses for certain sectors, the gains from trade typically outweigh these losses, benefiting the economy as a whole.

Question 16

When markets open up to international trade, we know that total surplus will rise.
​

Accepted Answer

Opening markets to international trade allows countries to specialize in producing goods for which they have a comparative advantage, leading to more efficient global production and an increase in total surplus, which is the sum of consumer and producer surplus.

Question 17

Figure 9-7
The following diagram shows the domestic demand and domestic supply curves in a market.  ​
-Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers produce?

Accepted Answer

The answer of Figure 9-7
The following diagram shows the domestic...

Question 18

​Since a tariff can increase employment in an industry, the result is a net increase in total surplus.

Accepted Answer

While a tariff can protect jobs in the industry it targets by making imported goods more expensive and thus less competitive, it generally leads to a net decrease in total surplus. This is because tariffs also lead to higher prices for consumers and can provoke retaliatory measures from other countries, potentially harming other sectors of the economy and reducing efficiency by not allowing the market to allocate resources to their most productive uses.

Question 19

​The small country assumption is made in developing models of international trade because it applies to US markets.

Accepted Answer

The small country assumption is made to simplify the analysis by assuming that the country cannot influence world prices through its own actions in international trade, not because it specifically applies to US markets, which are considered large.

Question 20

A tax on an imported good is called a ______ .

Accepted Answer

The answer of A tax on an imported good is...

Quiz 9: Application: International Trade

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?

If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

A country has a comparative advantage in a product if the world price is _____ than that country's domestic price without trade.

Imposing a tariff on the import of a good is preferable to a quota because a tariff produces revenue for the government, while a quota never produces any revenue for a government.

Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

There are only increases in total surplus when a country exports a good, since more units of the country's output of that good are produced.

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

When markets open up to international trade, we know that total surplus will rise.

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, how many units will domestic consumers demand, and how many units will domestic producers produce?

Since a tariff can increase employment in an industry, the result is a net increase in total surplus.

The small country assumption is made in developing models of international trade because it applies to US markets.

A tax on an imported good is called a ______ .

Quiz 9: Application: International Trade

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. ​ -Refer to Figure 9-7. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

Suppose in the country of Jumanji that the price of wheat with no trade allowed is above the world price of wheat. If Jumanji allows free trade, will Jumanji be an importer or an exporter of wheat?

Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?

​If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. ​ -Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Suppose in the country of Nash that the price of oranges is $8 per bushel with no trade allowed. If the world price of oranges is $10 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of oranges?

A country has a comparative advantage in a product if the world price is _____ than that country's domestic price without trade.

​Imposing a tariff on the import of a good is preferable to a quota because a tariff produces revenue for the government, while a quota never produces any revenue for a government.

Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

​There are only increases in total surplus when a country exports a good, since more units of the country's output of that good are produced.

Suppose in the country of Jumanji that the price of coffee with no trade allowed is below the world price of coffee. If Jumanji allows free trade, will Jumanji be an importer or an exporter of coffee?

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. ​ -Refer to Figure 9-7. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

​Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

​We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

When markets open up to international trade, we know that total surplus will rise. ​

​Since a tariff can increase employment in an industry, the result is a net increase in total surplus.

​The small country assumption is made in developing models of international trade because it applies to US markets.

A tax on an imported good is called a ______ .

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade.

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. Suppose the world price in this market is $7. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Imposing a tariff on the import of a good is preferable to a quota because a tariff produces revenue for the government, while a quota never produces any revenue for a government.

There are only increases in total surplus when a country exports a good, since more units of the country's output of that good are produced.

Figure 9-7 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-7. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade.

When markets open up to international trade, we know that total surplus will rise.

Since a tariff can increase employment in an industry, the result is a net increase in total surplus.

The small country assumption is made in developing models of international trade because it applies to US markets.