Question Details

(Solved) Chpt 9 International Trade Multiple Choice Identify the choice


I need help with page two, question 2. All work must be shown. These are the questions, the diagram is attached. Page 2.

a. According to the graph, equilibrium price and quantity before trade would be

b. According to the graph, the price and quantity demanded after trade would be

c. According to the graph, domestic production and domestic consumption after tradewould be

d. According to the graph, consumer surplus before trade would be

e. According to the graph, consumer surplus after trade would be

f. According to the graph, producer surplus before trade would be

g. According to the graph, total surplus after trade would beh. According to the graph, how many units of this product would be exported after trade is allowed?


Chpt 9 International Trade

 

Multiple Choice

 

Identify the choice that best completes the statement or answers the question.

 

____

 


 

1. For any country, if the world price of zinc is higher than the domestic price of zinc without trade, that country

 

should

 

a. export zinc, since that country has a comparative advantage in zinc.

 

b. import zinc, since that country has a comparative advantage in zinc.

 

c. neither export nor import zinc, since that country cannot gain from trade.

 

d. neither export nor import zinc, since that country already produces zinc at a low cost

 

compared to other countries.

 


 

____

 


 

2. Suppose Puerto Rico has a comparative advantage over other countries in producing sugar, but other countries

 

have an absolute advantage over Puerto Rico in producing sugar. If trade in sugar is allowed, Puerto Rico

 

a. will import sugar.

 

b. will export sugar.

 

c. will either export sugar or export sugar, but it is not clear from the given information.

 

d. would have nothing to gain either from exporting or importing sugar.

 


 

____

 


 

3. Trade raises the economic well-being of a nation in the sense that

 

a. the gains of the winners exceed the losses of the losers.

 

b. everyone in an economy gains from trade.

 

c. since countries can choose what products to trade, they will pick those products that are

 

most beneficial to society.

 

d. the nation joins the international community when it begins to engage in trade.

 

Figure 9-2

 


 

____

 


 

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

 

a. $210.

 

b. $245.

 

c. $455.

 

d. $490.

 


 

____

 


 

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

 

a. import 40 baskets.

 

b. import 70 baskets.

 

c. export 35 baskets.

 

d. export 65 baskets.

 


 

____

 


 

6. Refer to Figure 9-2. This country

 

a. has a comparative advantage in baskets.

 

b. should export baskets.

 

c. is a price taker in the world economy.

 

d. All of the above are correct.

 

Figure 9-6

 


 

____

 


 

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

 

a. $200.

 

b. $400.

 

c. $500.

 

d. $600.

 


 

____

 


 

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

 

a. lose by $500.

 

b. lose by $900.

 

c. gain by $500.

 

d. gain by $900.

 

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars.

 


 

____

 


 

9. Refer to Figure 9-8. The country for which the figure is drawn

 

a. has a comparative advantage relative to other countries in the production of cars and it

 

will export cars.

 

b. has a comparative advantage relative to other countries in the production of cars and it

 

will import cars.

 

c. has a comparative disadvantage relative to other countries in the production of cars and it

 

will export cars.

 

d. has a comparative disadvantage relative to other countries in the production of cars and it

 

will import cars.

 

Figure 9-12

 

Price

 

28

 

26

 

24

 

22

 

20

 

18

 

16

 

14

 

12

 

10

 

8

 

6

 

4

 

2

 


 

Domestic Supply

 


 

World Price

 


 

Domestic Demand

 

200

 


 

400

 


 

600

 


 

800

 


 

1000

 


 

1200

 


 

1400

 


 

Quantity

 


 

____ 10. Refer to Figure 9-12. With trade, the domestic price and domestic quantity demanded are

 

a. $18 and 400.

 

b. $18 and 800.

 


 

c. $14 and 400.

 

d. $14 and 600.

 

Figure 9-14. On the diagram below, Q represents the quantity of computers and P represents the price of

 

computers.

 


 

____ 11. Refer to Figure 9-14. When the country for which the figure is drawn allows international trade in

 

computers,

 

a. consumer surplus for domestic computer consumers decreases.

 

b. the demand for computers by domestic computer consumers decreases.

 

c. the losses of the domestic losers outweigh the gains of the domestic winners.

 

d. domestic computer producers sell fewer computers.

 

____ 12. A tariff on a product

 

a. is a direct quantitative restriction on the amount of a good that can be imported.

 

b. increases the domestic quantity supplied.

 

c. increases domestic consumer surplus.

 

d. All of the above are correct.

 

Figure 9-15

 


 

____ 13. Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are

 

a. P1 and Q1.

 

b. P1 and Q4.

 

c. P2 and Q2.

 

d. P2 and Q3.

 

____ 14. Refer to Figure 9-15. Producer surplus with the tariff is

 

a. G.

 

b. C + G.

 

c. A + C + G.

 

d. A + B + C + G.

 

____ 15. Both tariffs and import quotas

 

a. increase the quantity of imports and raise the domestic price of the good.

 

b. increase the quantity of imports and lower the domestic price of the good.

 

c. decrease the quantity of imports and raise the domestic price of the good.

 

d. decrease the quantity of imports and lower the domestic price of the good.

 

____ 16. When the nation of Isoland opens up its steel market to international trade, that change

 

a. creates winners and losers, regardless of whether Isoland ends up exporting or importing

 

steel.

 

b. results in a decrease in total surplus, regardless of whether Isoland ends up exporting or

 

importing steel.

 

c. creates winners, but no losers, if Isoland ends up exporting steel.

 

d. creates losers, but no winners, if Isoland ends up importing steel.

 

____ 17. Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts

 

to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8

 

million bottles per year, then we can conclude that

 

a. the quantity of wine demanded by France, with the tariff, is 18 million bottles per year.

 

b. the quantity of wine demanded by France, without the tariff, would be 24 million bottles

 

per year.

 

c. the amount of the deadweight loss is 24 million euros per year.

 

d. the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay

 


 

without the tariff.

 

____ 18. When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a

 

particular good,

 

a. consumer surplus increases and total surplus increases in the market for that good.

 

b. consumer surplus increases and total surplus decreases in the market for that good.

 

c. consumer surplus decreases and total surplus increases in the market for that good.

 

d. consumer surplus decreases and total surplus decreases in the market for that good.

 

____ 19. When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

 

a. consumer surplus increases and total surplus increases in the market for that good.

 

b. consumer surplus increases and total surplus decreases in the market for that good.

 

c. consumer surplus decreases and total surplus increases in the market for that good.

 

d. consumer surplus decreases and total surplus decreases in the market for that good.

 

____ 20. Congressman Smith cites the ?jobs argument? when he argues in favor of restrictions on trade; he argues that

 

everything can be produced at lower cost in other countries. The likely flaw in Congressman Smith?s

 

reasoning is that he ignores the fact that

 

a. there is no evidence that any worker ever lost his or her job because of free trade.

 

b. unemployment of labor is not a serious problem relative to other economic problems.

 

c. the gains from trade are based on comparative advantage.

 

d. the gains from trade are based on absolute advantage.

 

____ 21. Countries that restrict foreign trade are likely to

 

a. forgo the additional surplus that trade allows, but will probably enjoy economies of scale.

 

b. forgo the additional surplus that trade allows, but will be compensated by a higher rate of

 

technological change.

 

c. forgo the additional surplus that trade allows, but will have a lower rate of unemployment.

 

d. have more firms with domestic market power.

 

True/False

 

Indicate whether the statement is true or false.

 

____ 22. If the world price of a good is greater than the domestic price in a country that can engage in international

 

trade, then that country becomes an importer of that good.

 

____ 23. If Argentina exports oranges to the rest of the world, Argentina's producers of oranges are worse off, and

 

Argentina's consumers of oranges are better off, as a result of trade.

 

____ 24. If a country?s domestic price of a good is lower than the world price, then that country has a comparative

 

advantage in producing that good.

 

____ 25. Suppose the Ivory Coast, a small country, imports wheat at the world price of $4 per bushel. If the Ivory Coast

 

imposes a tariff of $1 per bushel on imported wheat, then, other things equal, the price of wheat in Ivory

 

Coast will increase, but by less than $1.

 

____ 26. The greater the elasticities of supply and demand, the smaller are the gains from trade.

 

____ 27. Suppose Ecuador imposes a tariff on imported bananas. If the increase in producer surplus is $50 million, the

 

reduction in consumer surplus is $150 million, and the deadweight loss of the tariff is $30 million, then the

 

tariff generates $130 million in revenue for the government.

 


 

____ 28. Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium

 

without trade, thus reducing the gains from trade.

 

Short Answer

 

29. Use the graph to answer the following questions about CDs.

 


 

a.

 

b.

 

c.

 

d.

 

e.

 

f.

 

g.

 

h.

 

i.

 

j.

 

k.

 


 

What is the equilibrium price of CDs before trade?

 

What is the equilibrium quantity of CDs before trade?

 

What is the price of CDs after trade is allowed?

 

What is the quantity of CDs exported after trade is allowed?

 

What is the amount of consumer surplus before trade?

 

What is the amount of consumer surplus after trade?

 

What is the amount of producer surplus before trade?

 

What is the amount of producer surplus after trade?

 

What is the amount of total surplus before trade?

 

What is the amount of total surplus after trade?

 

What is the change in total surplus because of trade?

 


 

30. How does an import quota differ from an equivalent tariff?

 

31. Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an

 

advantage over the other?

 


 

32.

 

What are the arguments in favor of trade restrictions, and what are the counterarguments?

 

According to most economists, do any of these arguments really justify trade restrictions? Explain.

 


 

Chpt 9 International Trade

 

Answer Section

 

MULTIPLE CHOICE

 

1. ANS:

 

NAT:

 

TOP:

 

2. ANS:

 

NAT:

 

TOP:

 

3. ANS:

 

NAT:

 

TOP:

 

4. ANS:

 

NAT:

 

TOP:

 

5. ANS:

 

NAT:

 

TOP:

 

6. ANS:

 

NAT:

 

TOP:

 

7. ANS:

 

NAT:

 

TOP:

 

8. ANS:

 

NAT:

 

TOP:

 

9. ANS:

 

NAT:

 

TOP:

 

10. ANS:

 

NAT:

 

TOP:

 

11. ANS:

 

NAT:

 

TOP:

 

12. ANS:

 

NAT:

 

TOP:

 

13. ANS:

 

NAT:

 

TOP:

 

14. ANS:

 

NAT:

 

TOP:

 


 

A

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Exports | Comparative advantage

 

MSC: Applicative

 

B

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Comparative advantage | Absolute advantage

 

MSC:

 

A

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

International trade | Economic welfare

 

MSC:

 

B

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Consumer surplus

 

MSC: Applicative

 

D

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Exports

 

MSC: Applicative

 

D

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Exports | Comparative advantage

 

MSC: Applicative

 

B

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs | Government

 

MSC: Applicative

 

B

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs | Consumer surplus

 

MSC: Applicative

 

D

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Comparative advantage | Imports

 

MSC: Applicative

 

A

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

International trade | Equilibrium

 

MSC: Interpretive

 

A

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Exports | Economic Welfare

 

MSC: Applicative

 

B

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs

 

MSC: Interpretive

 

B

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Trade | Equilibrium

 

MSC: Interpretive

 

B

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs | Producer surplus

 

MSC: Applicative

 


 

9-1

 

9-1

 

Interpretive

 

9-2

 

Interpretive

 

9-2

 

9-2

 

9-2

 

9-2

 

9-2

 

9-2

 

9-2

 

9-2

 

9-2

 

9-2

 

9-2

 


 

15. ANS:

 

NAT:

 

TOP:

 

16. ANS:

 

NAT:

 

TOP:

 

17. ANS:

 

NAT:

 

TOP:

 

18. ANS:

 

NAT:

 

TOP:

 

19. ANS:

 

NAT:

 

TOP:

 

20. ANS:

 

NAT:

 

TOP:

 

21. ANS:

 

NAT:

 

TOP:

 


 

C

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs | Import quotas

 

MSC: Interpretive

 

A

 

PTS: 1

 

DIF: 1

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Gains from trade

 

MSC: Interpretive

 

A

 

PTS: 1

 

DIF: 3

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs

 

MSC: Analytical

 

A

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

International trade | Consumer surplus | Total surplus

 

MSC:

 

D

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

International trade | Consumer surplus | Total surplus

 

MSC:

 

C

 

PTS: 1

 

DIF: 1

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Trade restriction

 

MSC: Interpretive

 

D

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Trade policy MSC: Interpretive

 


 

9-2

 


 

F

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

International trade | Prices

 

MSC: Interpretive

 

F

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Trade | Economic welfare

 

MSC: Applicative

 

T

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Comparative advantage | Prices

 

MSC: Interpretive

 

F

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs | Prices

 

MSC: Interpretive

 

F

 

PTS: 1

 

DIF: 3

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Gains from trade | Price elasticities of demand and supply

 

Applicative

 

T

 

PTS: 1

 

DIF: 3

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs | Deadweight loss

 

MSC: Applicative

 

T

 

PTS: 1

 

DIF: 2

 

REF:

 

Analytic

 

LOC: Gains from trade, specialization and trade

 

Tariffs | Deadweight loss

 

MSC: Interpretive

 


 

9-1

 


 

9-2

 

9-2

 

9-2

 

Interpretive

 

9-2

 

Interpretive

 

9-3

 

9-3

 


 

TRUE/FALSE

 

22. ANS:

 

NAT:

 

TOP:

 

23. ANS:

 

NAT:

 

TOP:

 

24. ANS:

 

NAT:

 

TOP:

 

25. ANS:

 

NAT:

 

TOP:

 

26. ANS:

 

NAT:

 

TOP:

 

MSC:

 

27. ANS:

 

NAT:

 

TOP:

 

28. ANS:

 

NAT:

 

TOP:

 


 

SHORT ANSWER

 


 

9-2

 

9-2

 

9-2

 

9-2

 


 

9-2

 

9-2

 


 

29. ANS:

 

a. $12

 

b. 50

 

c. $15

 

d. 30

 

e. $250

 

f. $122.50

 

g. $250

 

h. $422.50

 

i. $500

 

j. $545

 

k. $45

 

PTS: 1

 

DIF: 2

 

REF: 9-2

 

NAT: Analytic

 

LOC: Gains from trade, specialization and trade

 

TOP: Exports | Economic welfare

 

MSC: Applicative

 

30. ANS:

 

Both the import quota and the tariff raise the domestic price of the good, reduce the welfare of domestic

 

consumers, increase the welfare of domestic producers, and cause deadweight losses. The only difference for

 

the economy is that the tariff raises revenue for the government, while the import quota creates surplus for

 

license holders.

 

PTS: 1

 

DIF: 2

 

REF: 9-2

 

NAT: Analytic

 

LOC: Gains from trade, specialization and trade

 

TOP: Tariffs | Import quotas

 

MSC: Interpretive

 

31. ANS:

 

A unilateral approach is when a country removes its trade restrictions on its own. A multilateral approach is

 

when a country removes its trade restrictions while other countries do the same. A multilateral approach has

 

two advantages. The first is that it has the potential to result in freer trade because it can reduce trade

 

restrictions abroad as well as at home. If international negotiations fail, however, the result could be more

 

restricted trade than under a unilateral approach. Also, the multilateral approach may have a political

 

advantage and can sometimes win political support when a unilateral reduction cannot.

 

PTS: 1

 

DIF: 2

 

REF: 9-3

 

NAT: Analytic

 

LOC: Gains from trade, specialization and trade

 

TOP: Trade policy

 

MSC: Interpretive

 

32. ANS:

 

Arguments mentioned in the text include the jobs argument, the national security argument, the infant

 

industry argument, the unfair competition argument, and the protection-as-a-bargaining-chip argument. These

 

arguments and counter-arguments are outlined in section 9-3 of the text. Most economists would dismiss the

 

jobs argument, the infant industry argument, and the unfair competition argument on strictly economic

 

grounds. The bargaining-chip argument carries high risks of economic harm if the threat doesn't work. The

 

national-security argument balances economic loss from trade restriction against the benefit of long-term

 

national survival, and is probably the argument that economists would most likely buy if it were clear that the

 

industry being protected was clearly crucial to national security.

 

PTS: 1

 

DIF: 2

 

REF: 9-3

 

LOC: Gains from trade, specialization and trade

 

MSC: Interpretive

 


 

NAT: Analytic

 

TOP: Trade policy

 


 

 


Solution details:

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Oct 15, 2019

EXPERT

Tutor

ANSWER RATING

YES, THIS IS LEGAL

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now