Question 1

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

Accepted Answer

The answer of Figure 9-7. The figure applies to the...

Question 2

Figure 9-6 
-Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Accepted Answer

The answer of Figure 9-6 
-Refer to Figure 9-6. The...

Question 3

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

Accepted Answer

The answer of The before-trade price of fish in Denmark...

Question 4

Figure 9-6 
-Refer to Figure 9-6. The size of the tariff on carnations is

Accepted Answer

The answer of Figure 9-6 
-Refer to Figure 9-6. The...

Question 5

Figure 9-5 
-Refer to Figure 9-5. If this country allows free trade in wagons,

Accepted Answer

With free trade, the domestic price of wagons will equal the world price, which is lower than the domestic price under autarky. Therefore, consumers will gain because they will be able to purchase wagons at a lower price. Producers, on the other hand, will lose because they will have to sell wagons at a lower price. However, the net gain to consumers will be greater than the net loss to producers, resulting in a net gain for the country as a whole.

Question 6

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

Accepted Answer

Since the world price of fish is lower than the before-trade price in Germany, Germany will become an importer of fish. The price of fish in Germany will then adjust to the world price of $6.00 per pound.

Question 7

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Accepted Answer

With trade, the Welsh price of cheese would equal the world price (PS1 = PW = $6) and the Welsh quantity of cheese demanded would equal the quantity supplied (QS1 = QD1 = 11). Therefore, the correct answer is B: P₁ and Q₁.

Question 8

Figure 9-6 
-Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

Accepted Answer

The answer of Figure 9-6 
-Refer to Figure 9-6. When...

Question 9

Figure 9-6 
-Refer to Figure 9-6. With trade and without a tariff,

Accepted Answer

In both scenarios, the domestic price is equal to the world price ($6), as shown by the intersection of the supply and demand curves. Therefore, there is no effect of the tariff on the domestic price or quantity demanded and supplied. Since there is no change in the equilibrium price or quantity, the answer is A.

Question 10

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. The equilibrium price and the equilibrium quantity of cheese in Wales before trade are

Accepted Answer

The answer of Figure 9-7. The figure applies to the...

Question 11

Figure 9-6 
-Refer to Figure 9-6. Before the tariff is imposed, this country

Accepted Answer

Before the tariff is imposed, the country imports 400 carnations (shown by the green arrow pointing to the right).

Question 12

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. Which of the following is a valid equation for Welsh consumer surplus with trade?

Accepted Answer

The equation for consumer surplus with trade is (1/2)(quantity consumed with trade)(maximum amount willing to pay with trade - market price with trade). From the figure, we can see that the quantity consumed with trade is Q₁ and the maximum amount willing to pay with trade is P₃. The market price with trade is P₁. Therefore, the valid equation for Welsh consumer surplus with trade is (1/2)(Q₁)(P₃ - P₁), which is option C.

Question 13

Figure 9-6 
-Refer to Figure 9-6. The imposition of a tariff on carnations

Accepted Answer

The imposition of a tariff on carnations causes the supply curve to shift leftward, leading to a decrease in the quantity imported. In this case, the decrease has been illustrated as being equal to 200 carnations.

Question 14

Figure 9-5 
-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 horses within this country, given that wagons and horses are complements?

Accepted Answer

If the price of horses decreases, demand for wagons (which are complements to horses) will increase, causing the quantity of wagons this country imports to increase.

Question 15

Figure 9-6 
-Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Accepted Answer

The answer of Figure 9-6 
-Refer to Figure 9-6. The...

Question 16

Figure 9-6 
-Refer to Figure 9-6. Without trade, the equilibrium price of carnations is

Accepted Answer

The answer of Figure 9-6 
-Refer to Figure 9-6. Without...

Question 17

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. Which of the following is a valid equation for Welsh producer surplus with trade?

Accepted Answer

The answer of Figure 9-7. The figure applies to the...

Question 18

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. With trade, Wales

Accepted Answer

With trade, Wales is able to produce cheese at a lower opportunity cost than the rest of the world and therefore, it exports cheese. The difference between the quantity of cheese produced by Wales (Q₁) and the quantity of cheese demanded by Wales (Q₂) is the quantity of cheese that is exported.

Question 19

Figure 9-6 
-Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Accepted Answer

When the tariff is imposed, the domestic price increases from Pd to Pt (the world price plus the tariff), causing a decrease in quantity demanded from Q1 to Q2. Domestic producers gain a surplus equal to the blue area (C+F), and the government gains a tariff revenue equal to area E. However, domestic consumers lose a surplus equal to the total shaded area (A+B+C+D+E+F), which is $900 in this case.

Question 20

Figure 9-5 
-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 wagons to an exporter of wagons?

Accepted Answer

The answer of Figure 9-5 
-Refer to Figure 9-5. Bearing...

Quiz 9: Application: International Trade

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

Figure 9-6 -Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

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

Figure 9-6 -Refer to Figure 9-6. The size of the tariff on carnations is

Figure 9-5 -Refer to Figure 9-5. If this country allows free trade in wagons,

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

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. With trade, the Welsh price of cheese and the Welsh quantity of cheese demanded are

Figure 9-6 -Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

Figure 9-6 -Refer to Figure 9-6. With trade and without a tariff,

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. The equilibrium price and the equilibrium quantity of cheese in Wales before trade are

Figure 9-6 -Refer to Figure 9-6. Before the tariff is imposed, this country

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for Welsh consumer surplus with trade?

Figure 9-6 -Refer to Figure 9-6. The imposition of a tariff on carnations

Figure 9-5 -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 horses within this country, given that wagons and horses are complements?

Figure 9-6 -Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Figure 9-6 -Refer to Figure 9-6. Without trade, the equilibrium price of carnations is

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. Which of the following is a valid equation for Welsh producer surplus with trade?

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. -Refer to Figure 9-7. With trade, Wales

Figure 9-6 -Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Figure 9-5 -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 wagons to an exporter of wagons?