Question 1

Honduras is an importer of goose-down pillows.The world price of these pillows is $50.Honduras imposes a $7 tariff on pillows.Honduras is a price-taker in the pillow market.As a result of the tariff,the price of goose-down pillows in Honduras

Accepted Answer

When a tariff is imposed, the price of the imported goods increases by the amount of the tariff. Therefore, the price of goose-down pillows in Honduras will increase to $57 ($50 + $7) due to the tariff. As Honduras is a price-taker in the market, it cannot influence the world price of $50. Due to the price increase, the quantity of goose-down pillows purchased in Honduras decreases. Thus, option B is the correct answer.

Question 2

Figure 9-15 
-Refer to Figure 9-15.As a result of the tariff,there is a deadweight loss that amounts to

Accepted Answer

The deadweight loss is the area of the triangle formed by points B, D, and F. Therefore, the deadweight loss amounts to the value of D + F.

Question 3

Figure 9-15 
-Refer to Figure 9-15.Consumer surplus with the tariff is

Accepted Answer

Consumer surplus with the tariff is the area A + B.

Question 4

Figure 9-15 
-Refer to Figure 9-15.With the tariff,the price paid and quantity demanded by domestic buyers are

Accepted Answer

With the tariff, the domestic price increases from P1 to P2, and the domestic quantity demanded decreases from Q1 to Q2. Therefore, the new price and quantity demanded by domestic buyers are P₂ and Q₃, respectively.

Question 5

Figure 9-15 
-Refer to Figure 9-15.Producer surplus with the tariff is

Accepted Answer

Producer surplus with the tariff is the area between the supply curve and the world price (MC) curve above the tariff level. In this case, it is the area C + G. Therefore, the correct answer is B. Options A, C, and D include additional areas that do not represent producer surplus.

Question 6

Turkey is an importer of wheat.The world price of a bushel of wheat is $7.Turkey imposes a $3-per-bushel tariff on wheat.Turkey is a price-taker in the wheat market.As a result of the tariff,

Accepted Answer

The tariff increases the price of imported wheat, making Turkish consumers worse off due to higher prices. However, it benefits Turkish producers by reducing foreign competition, allowing them to sell more at higher prices.

Question 7

Figure 9-15 
-Refer to Figure 9-15.For the saddle market,area E represents

Accepted Answer

Area E represents the government's revenue from the tariff, as it is the area between the domestic supply and demand curves over the quantity of imports after the tariff is imposed.

Question 8

Figure 9-15 
-Refer to Figure 9-15.The amount of government revenue created by the tariff is

Accepted Answer

The government revenue from a tariff is typically represented by the area of the rectangle formed by the tariff rate and the quantity of imports after the tariff is imposed. In this case, it is represented by area E.

Question 9

Figure 9-15 
-Refer to Figure 9-15.Producer surplus with trade and without a tariff is

Accepted Answer

Producer surplus with trade and without a tariff is the area between the supply curve and the world price line, which is shown as area G. Therefore, the correct answer is A.

Question 10

Figure 9-15 
-Refer to Figure 9-15.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Accepted Answer

The answer of Figure 9-15 
-Refer to Figure 9-15.A result...

Question 11

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. 
-Refer to Figure 9-16.The deadweight loss created by the tariff is represented by the area

Accepted Answer

The answer of Figure 9-16.The figure below illustrates a tariff.On...

Question 12

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. 
-Refer to Figure 9-16.The tariff

Accepted Answer

The answer of Figure 9-16.The figure below illustrates a tariff.On...

Question 13

Figure 9-15 
-Refer to Figure 9-15.Consumer surplus with trade and without a tariff is

Accepted Answer

The answer of Figure 9-15 
-Refer to Figure 9-15.Consumer surplus...

Question 14

Figure 9-15 
-Refer to Figure 9-15.With the tariff,the quantity of saddles imported is

Accepted Answer

The tariff causes the price of saddles to rise from Pw to Pt. This leads to a decrease in quantity demanded from Qd to Qd1, and an increase in quantity supplied from Qs to Qs1. With the tariff, the quantity of saddles imported is the difference between the quantity demanded domestically (Qd1) and the quantity supplied domestically (Qs1) at the world price (Pw), which is Q₂ - Q₁. Therefore, the correct answer is B.

Question 15

When the nation of Brownland first permitted trade with other nations,domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.We can conclude that

Accepted Answer

When Brownland opened up to trade, the increase in producer surplus suggests that domestic producers were able to sell more wheat at higher prices, which is consistent with becoming an exporter. The increase in total surplus indicates that the gains from trade outweighed any losses to consumers.

Question 16

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. 
-Refer to Figure 9-16.The tariff

Accepted Answer

The answer of Figure 9-16.The figure below illustrates a tariff.On...

Question 17

Figure 9-15 
-Refer to Figure 9-15.With trade and without a tariff,the price and domestic quantity demanded are

Accepted Answer

With trade and without a tariff, the price is at the world price level, P1, and the domestic quantity demanded is Q4, where the demand curve intersects the world price line.

Question 18

When the nation of Mooseland first permitted trade with other nations,domestic producers of sugar experienced a decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million.We can conclude that

Accepted Answer

The decrease in producer surplus means that producers lost some profits, but the increase in total surplus means that consumers gained more than producers lost. Therefore, consumer surplus must have increased by more than $5 million (the decrease in producer surplus) in order for the total surplus to increase by $2 million.

Question 19

Figure 9-15 
-Refer to Figure 9-15.For the saddle market,area B represents

Accepted Answer

The answer of Figure 9-15 
-Refer to Figure 9-15.For the...

Question 20

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. 
-Refer to Figure 9-16.Government revenue raised by the tariff is represented by the area

Accepted Answer

The answer of Figure 9-16.The figure below illustrates a tariff.On...

Quiz 9: Application International Trade: The Winners and Losers From Trade

Honduras is an importer of goose-down pillows.The world price of these pillows is $50.Honduras imposes a $7 tariff on pillows.Honduras is a price-taker in the pillow market.As a result of the tariff,the price of goose-down pillows in Honduras

Figure 9-15 -Refer to Figure 9-15.As a result of the tariff,there is a deadweight loss that amounts to

Figure 9-15 -Refer to Figure 9-15.Consumer surplus with the tariff is

Figure 9-15 -Refer to Figure 9-15.With the tariff,the price paid and quantity demanded by domestic buyers are

Figure 9-15 -Refer to Figure 9-15.Producer surplus with the tariff is

Turkey is an importer of wheat.The world price of a bushel of wheat is $7.Turkey imposes a $3-per-bushel tariff on wheat.Turkey is a price-taker in the wheat market.As a result of the tariff,

Figure 9-15 -Refer to Figure 9-15.For the saddle market,area E represents

Figure 9-15 -Refer to Figure 9-15.The amount of government revenue created by the tariff is

Figure 9-15 -Refer to Figure 9-15.Producer surplus with trade and without a tariff is

Figure 9-15 -Refer to Figure 9-15.A result of the tariff is that,relative to the free-trade situation,the quantity of saddles imported decreases by

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. -Refer to Figure 9-16.The deadweight loss created by the tariff is represented by the area

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. -Refer to Figure 9-16.The tariff

Figure 9-15 -Refer to Figure 9-15.Consumer surplus with trade and without a tariff is

Figure 9-15 -Refer to Figure 9-15.With the tariff,the quantity of saddles imported is

When the nation of Brownland first permitted trade with other nations,domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.We can conclude that

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. -Refer to Figure 9-16.The tariff

Figure 9-15 -Refer to Figure 9-15.With trade and without a tariff,the price and domestic quantity demanded are

When the nation of Mooseland first permitted trade with other nations,domestic producers of sugar experienced a decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million.We can conclude that

Figure 9-15 -Refer to Figure 9-15.For the saddle market,area B represents

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price. -Refer to Figure 9-16.Government revenue raised by the tariff is represented by the area