Question 1

Figure 9-2 
-Refer to Figure 9-2.Without trade,producer surplus is

Accepted Answer

Without trade, producer surplus is the area above the supply curve and below the equilibrium price. In this case, that area is a triangle with a base of 7 and a height of 30, which calculates to be ($7 x 30 / 2) = $105. Since there are two producers selling in the market, the total producer surplus is $105 x 2 = $210.

Question 2

Figure 9-2 
-Refer to Figure 9-2.The world price for baskets represents

Accepted Answer

The answer of Figure 9-2 
-Refer to Figure 9-2.The world...

Question 3

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.If China were to abandon a no-trade policy in favor of a free-trade policy,

Accepted Answer

The answer of Figure 9-3.The domestic country is China. 
-Refer...

Question 4

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.With trade,producer surplus in China is

Accepted Answer

The answer of Figure 9-3.The domestic country is China. 
-Refer...

Question 5

Figure 9-2 
-Refer to Figure 9-2.With free trade,consumer surplus is

Accepted Answer

Under free trade, the domestic price decreases from $8 to $5, resulting in increased consumer surplus. The area of the triangle representing consumer surplus is (1/2)*(5-3)*(28) = $28. The rectangle representing consumer surplus is (5-3)*(17) = $34. Adding these two, we get $28+$34 = $62. Subtracting the consumer surplus with the tariff ($80), we get $80-$62 = $18, which is the increase in consumer surplus due to free trade. Therefore, the total consumer surplus with free trade is $80+$18 = $98.

Question 6

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.The increase in total surplus in China when trade is allowed is

Accepted Answer

The total surplus in China increases by the sum of consumer and producer surplus gains, which is equal to $500. This is calculated as the area bounded by the new equilibrium price (Pw) and the original domestic equilibrium price (Pd), multiplied by the quantity demanded (Qd-Qw).

Question 7

Figure 9-2 
-Refer to Figure 9-2.Without trade,consumer surplus is

Accepted Answer

The answer of Figure 9-2 
-Refer to Figure 9-2.Without trade,consumer...

Question 8

Figure 9-2 
-Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be

Accepted Answer

The answer of Figure 9-2 
-Refer to Figure 9-2.If this...

Question 9

Figure 9-4.The domestic country is Nicaragua. 
-Refer to Figure 9-4.With trade,Nicaragua

Accepted Answer

According to the diagram, Nicaragua specializes in producing coffee and can produce 200 bags of coffee. However, they only consume 150 bags domestically, so they can export 50 bags. In exchange, they can import calculators, with a limit of 250 calculators. Therefore, Nicaragua imports 250 calculators.

Question 10

Figure 9-2 
-Refer to Figure 9-2.This country

Accepted Answer

From the figure, we can see that the domestic opportunity cost of producing one basket is lower than the opportunity cost of producing one fish. Therefore, this country has a comparative advantage in baskets and should export them. Additionally, since the country is a small producer in the world economy, it is a price taker and must accept the prevailing world price for both baskets and fish. Therefore, all of the above options are correct.

Question 11

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.Relative to a no-trade situation,which of the following comes with trade?

Accepted Answer

The answer of Figure 9-3.The domestic country is China. 
-Refer...

Question 12

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

Accepted Answer

The answer of Suppose a country abandons a no-trade policy...

Question 13

The world price of a pound of T-bone steak is $9.00.Before Latvia allowed trade in beef,the price of a pound of T-bone steak there was $7.50.Once Latvia began allowing trade in beef with other countries,Latvia began

Accepted Answer

The answer of The world price of a pound of...

Question 14

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of beans increases to equal the world price of beans,then

Accepted Answer

The answer of Suppose a country abandons a no-trade policy...

Question 15

Figure 9-2 
-Refer to Figure 9-2.With free trade,producer surplus is

Accepted Answer

The answer of Figure 9-2 
-Refer to Figure 9-2.With free...

Question 16

Figure 9-2 
-Refer to Figure 9-2.At the world price and with free trade,

Accepted Answer

At the world price, the domestic quantity of baskets demanded is equal to 20 while the domestic quantity of baskets supplied is also equal to 20. This means that the basket market is in equilibrium with free trade. Choices A and C are incorrect because there is no information in the figure indicating the elasticity of demand or the quantity demanded being greater than supplied. Choice D is also incorrect because there is no information in the figure about the impact of free trade on producers and consumers.

Question 17

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.With no international trade,

Accepted Answer

The answer of Figure 9-3.The domestic country is China. 
-Refer...

Question 18

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.With trade,China will

Accepted Answer

According to the figure, the domestic price of pencil sharpeners in China is above the world price. Therefore, China has a comparative advantage in producing pencil sharpeners and will export them. The quantity of exports will be the difference between the domestic quantity supplied and the domestic quantity demanded at the world price, which is 250.

Question 19

Figure 9-2 
-Refer to Figure 9-2.With free trade,this country will

Accepted Answer

The answer of Figure 9-2 
-Refer to Figure 9-2.With free...

Question 20

Figure 9-2 
-Refer to Figure 9-2.As a result of trade,total surplus increases by

Accepted Answer

The answer of Figure 9-2 
-Refer to Figure 9-2.As a...

Quiz 9: Application: International Trade

Figure 9-2 -Refer to Figure 9-2.Without trade,producer surplus is

Figure 9-2 -Refer to Figure 9-2.The world price for baskets represents

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.If China were to abandon a no-trade policy in favor of a free-trade policy,

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.With trade,producer surplus in China is

Figure 9-2 -Refer to Figure 9-2.With free trade,consumer surplus is

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.The increase in total surplus in China when trade is allowed is

Figure 9-2 -Refer to Figure 9-2.Without trade,consumer surplus is

Figure 9-2 -Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be

Figure 9-4.The domestic country is Nicaragua. -Refer to Figure 9-4.With trade,Nicaragua

Figure 9-2 -Refer to Figure 9-2.This country

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.Relative to a no-trade situation,which of the following comes with trade?

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then

The world price of a pound of T-bone steak is $9.00.Before Latvia allowed trade in beef,the price of a pound of T-bone steak there was $7.50.Once Latvia began allowing trade in beef with other countries,Latvia began

Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of beans increases to equal the world price of beans,then

Figure 9-2 -Refer to Figure 9-2.With free trade,producer surplus is

Figure 9-2 -Refer to Figure 9-2.At the world price and with free trade,

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.With no international trade,

Figure 9-3.The domestic country is China. -Refer to Figure 9-3.With trade,China will

Figure 9-2 -Refer to Figure 9-2.With free trade,this country will

Figure 9-2 -Refer to Figure 9-2.As a result of trade,total surplus increases by