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Exam 9: Application: International Trade

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Question 61

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Figure 9-9 The following diagram shows the domestic demand and domestic supply curves in a market. ​ -Refer to Figure 9-9. Suppose the world price in this market is $6. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

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Question 62

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In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

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Question 63

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Which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

Suppose the world price of coffee is $3 per pound and Brazil's domestic price of coffee without trade is $2 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?

Scenario 9-1 ​ For a small country called Boxland, the equation of the domestic demand curve for cardboard is Q^D = 210 − 2P, where Q^D represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is Q^S = -90 + 3P, where Q^S represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. -Refer to Scenario 9-1. Suppose the world price of cardboard is $82.5. Then, relative to the no-trade situation, international trade in cardboard produces which of the following results for Boxland?

When markets open up to international trade, we know that total surplus will rise. ​

Scenario 9-2 Suppose domestic demand and domestic supply in a market are given by the following equations: $\begin{array} { l } Q ^ { D } = 20 - P \\Q ^ { S } = P\end{array}$ ​ -Refer to Scenario 9-2. Suppose the world price in this market is $8 per unit. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported?

Figure 9-3 -Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers

The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

Scenario 9-2 Suppose domestic demand and domestic supply in a market are given by the following equations: $\begin{array} { l } Q ^ { D } = 20 - P \\Q ^ { S } = P\end{array}$ ​ -Refer to Scenario 9-2. Suppose the world price in this market is $8 per unit. If the country allows free trade, how much are consumer surplus, producer surplus, and producer surplus with trade?

Figure 9-10 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. ​ -Refer to Figure 9-10. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how many units will be imported?

Figure 9-1 ​ Uganda -Refer to Figure 9-1. From the figure it is apparent that

Figure 9-3 -Refer to Figure 9-3. The amount of deadweight loss caused by the tariff equals

Figure 9-8 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. ​ -Refer to Figure 9-8. With no trade allowed, what are the equilibrium price and equilibrium quantity in this market?

William and Jamal live in the country of Dumexia. As a result of Dumexia's legalization of international trade in bananas, William becomes better off and Jamal becomes worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

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.

Scenario 9-2 Suppose domestic demand and domestic supply in a market are given by the following equations: $\begin{array} { l } Q ^ { D } = 20 - P \\Q ^ { S } = P\end{array}$ ​ -Refer to Scenario 9-2. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus in this market?

Figure 9-6 -Zelzar has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?