Question 1

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The size of the tariff on roses is

Accepted Answer

The answer of Figure 9-6
The figure illustrates the market for...

Question 2

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The imposition of a tariff on roses

Accepted Answer

Imposing a tariff on roses would increase the price of roses in the domestic market, which would decrease the quantity demanded of roses by domestic consumers. Furthermore, it would reduce the quantity of roses supplied by foreign producers due to the higher cost of exporting. As a result, the quantity of roses imported would decrease by 200 units, as shown in the figure.

Question 3

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Accepted Answer

The answer of Figure 9-6
The figure illustrates the market for...

Question 4

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. Without trade, the equilibrium price of roses is

Accepted Answer

The answer of Figure 9-6
The figure illustrates the market for...

Question 5

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-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?

Accepted Answer

The answer of Figure 9-5
The figure illustrates the market for...

Question 6

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. With trade, total surplus is

Accepted Answer

Total surplus in the absence of trade is the sum of producer surplus and consumer surplus, which is equal to the area of the triangle formed by the supply and demand curves up to the equilibrium quantity, shown as A + B + C in the diagram.

With trade, the price of tricycles decreases to the world price, resulting in an increase in consumer surplus (area A), and a decrease in producer surplus (area B). However, the gains in consumer surplus are greater than the losses in producer surplus, resulting in an overall increase in total surplus. The total surplus with trade is the sum of consumer surplus, producer surplus and the gains from trade, shown as A + E + F + G + H + I + J in the diagram.

Calculating the areas,
Total surplus without trade = 1/2 x 100 x (20 - 2) = $980
Total surplus with trade = 1/2 x (20 - 2) x (80 - 2) = $3,240
Therefore, the best choice is C, $7,760.

Question 7

Figure 9-6
The figure illustrates the market for roses in a country. 
-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
The figure illustrates the market for...

Question 8

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. With trade, the price of tricycles in this country is

Accepted Answer

The answer of Figure 9-5
The figure illustrates the market for...

Question 9

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. If this country allows free trade in tricycles,

Accepted Answer

The answer of Figure 9-5
The figure illustrates the market for...

Question 10

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. With trade and without a tariff,

Accepted Answer

Without a tariff, there is free trade and the domestic price will be equal to the world price. In the figure, the world price is shown as $4 and the domestic price, without a tariff, is also $4. Therefore, choice A is correct.

Question 11

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-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?

Accepted Answer

The answer of Figure 9-5
The figure illustrates the market for...

Question 12

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 equalize with the world price of $6.00 per pound because Germany is a price-taker and cannot charge a higher price. Therefore, the correct choice is A, importer of fish and the price of fish in Germany will be $6.00.

Question 13

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

Accepted Answer

The answer of Figure 9-6
The figure illustrates the market for...

Question 14

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Accepted Answer

With the imposition of the tariff, the price of roses increases from Pw to Pt. Domestic consumers were originally willing to buy 200,000 roses at a price of Pw, but now they must pay Pt. This results in a loss of consumer surplus equal to the triangle formed by the original demand curve, the new demand curve, and the Pt line, which is $450.

Question 15

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. With trade, consumer surplus is

Accepted Answer

With trade, the domestic price of tricycles decreases from $240 to $160, which results in an increase in consumer surplus from the triangle below the demand curve and above the domestic price (which is $240) to the triangle below the demand curve and above the world price (which is $160). The area of the new triangle is (1/2) x (80) x (60) = $2,400. Since there are 2 million consumers, the total increase in consumer surplus is $4,800 million. Adding the initial consumer surplus of $1,960 million, the total consumer surplus with trade is $6,760 million. Therefore, the answer is C.

Question 16

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. Before the tariff is imposed, this country

Accepted Answer

Before the tariff is imposed, the world price of roses is $10 per dozen, and the domestic price of roses is $15 per dozen. Since the domestic price is higher than the world price, this country is a net importer of roses. The quantity of roses imported is the difference between the quantity demanded (600 dozen) and the quantity supplied domestically (200 dozen), which is 400 dozen. Therefore, the best answer is B, which states that the country imports 400 roses.

Question 17

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

Accepted Answer

Total surplus without trade is the area of the triangle formed by the intersection of the supply and demand curves and the y-axis, which is equal to ½ x Base x Height = ½ x $32 x 40,000 = $640,000. 
Total surplus with trade is the sum of consumer surplus, producer surplus and government revenue, which is equal to [(48-16) x 20,000 + (48-32) x 20,000 + $32 x 20,000] = $1,920,000. 
Therefore, total surplus with trade exceeds total surplus without trade by $1,280,000 ($1,920,000 - $640,000).

Question 18

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. The increase in total surplus resulting from trade is

Accepted Answer

The increase in total surplus resulting from trade is the sum of the increase in consumer surplus and the decrease in producer surplus. In this case, consumer surplus increases from $3,200 to $6,720, which is a gain of $3,520. Producer surplus decreases from $4,240 to $2,000, which is a loss of $2,240. Therefore, the increase in total surplus is $3,520 + $2,240 = $1,280.

Question 19

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. With trade, producer surplus is

Accepted Answer

The answer of Figure 9-5
The figure illustrates the market for...

Question 20

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. If this country allows free trade in tricycles,

Accepted Answer

Free trade typically leads to lower prices and increased competition, which benefits consumers. Producers, on the other hand, may face greater competition and potentially lower profits. Therefore, consumers will gain more than producers will lose with free trade in tricycles.

Quiz 9: Application: International Trade

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The size of the tariff on roses is

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The imposition of a tariff on roses

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Without trade, the equilibrium price of roses is

Figure 9-5 The figure illustrates the market for tricycles in a country. -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?

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, total surplus is

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The amount of revenue collected by the government from the tariff is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, the price of tricycles in this country is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. With trade and without a tariff,

Figure 9-5 The figure illustrates the market for tricycles in a country. -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?

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 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. When a tariff is imposed in the market, domestic producers

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. When the tariff is imposed, domestic consumers

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, consumer surplus is

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. Before the tariff is imposed, this country

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Total surplus with trade exceeds total surplus without trade by

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. The increase in total surplus resulting from trade is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. With trade, producer surplus is

Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. If this country allows free trade in tricycles,