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Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. , where Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. represents the domestic quantity of cardboard demanded, in tons, and Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. , where Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. represents the domestic quantity of cardboard supplied, in tons, and Scenario 9-2 • For a small country called Boxland, the equation of the domestic demand curve for cardboard is , where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is , where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00. B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50. C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50. D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00. again represents the price of a ton of cardboard. -Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then, relative to the no-trade situation, international trade in cardboard


A) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $525.00.
B) benefits Boxlandian consumers by $721 and harms Boxlandian producers by $598.50.
C) benefits Boxlandian consumers by $672 and harms Boxlandian producers by $598.50.
D) harms Boxlandian consumers by $336 and harms Boxlandian producers by $525.00.

E) A) and B)
F) A) and C)

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If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be


A) better off regardless of how Colombia responds.
B) better off if Colombia removes the subsidies, and will be no worse off if it doesn't.
C) worse off if Colombia doesn't remove the subsidies in response to the threat.
D) worse off regardless of how Colombia responds.

E) A) and B)
F) A) and C)

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Figure 9-2 The figure illustrates the market for calculators in a country. Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. Without trade, consumer surplus is A) $423. B) $845. C) $1,690. D) $3,380. -Refer to Figure 9-2. Without trade, consumer surplus is


A) $423.
B) $845.
C) $1,690.
D) $3,380.

E) None of the above
F) All of the above

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​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. ​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -​Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is A) ​$4800. B) ​$2400. C) ​$600. D) ​$6000. -​Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is


A) ​$4800.
B) ​$2400.
C) ​$600.
D) ​$6000.

E) All of the above
F) A) and C)

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Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. Figure 9-18. On the diagram below, Q represents the quantity of peaches and P represents the price of peaches. The domestic country is Isoland. -Refer to Figure 9-18. If Isoland allows international trade and the world price of peaches is $5, then A) producer surplus will be smaller than it would be if Isoland banned trade. B) consumer surplus will be smaller than it would be if Isoland banned trade. C) the domestic quantity of peaches demanded will exceed the domestic quantity of peaches supplied. D) Isoland will be an importer of peaches. -Refer to Figure 9-18. If Isoland allows international trade and the world price of peaches is $5, then


A) producer surplus will be smaller than it would be if Isoland banned trade.
B) consumer surplus will be smaller than it would be if Isoland banned trade.
C) the domestic quantity of peaches demanded will exceed the domestic quantity of peaches supplied.
D) Isoland will be an importer of peaches.

E) All of the above
F) B) and D)

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Figure 9-4. The domestic country is Nicaragua. Figure 9-4. The domestic country is Nicaragua. -Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is A) $625, and this is an increase in total surplus. B) $750, and this is an increase in total surplus. C) $625, and this is a decrease in total surplus. D) $750, and this is a decrease in total surplus. -Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is


A) $625, and this is an increase in total surplus.
B) $750, and this is an increase in total surplus.
C) $625, and this is a decrease in total surplus.
D) $750, and this is a decrease in total surplus.

E) All of the above
F) A) and B)

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A tariff on a product


A) enhances the economic well-being of the domestic economy.
B) increases the domestic quantity supplied.
C) increases the domestic quantity demanded.
D) results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.

E) A) and C)
F) C) and D)

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Figure 9-27 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. Figure 9-27 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 9-27. Suppose the country imposes a $5 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus? -Refer to Figure 9-27. Suppose the country imposes a $5 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus?

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With trade and a tariff, consu...

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Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: Scenario 9-3 Suppose domestic demand and domestic supply in a market are given by the following equations: -Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus? -Refer to Scenario 9-3. Suppose the world price in this market is $8 per unit, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus?

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William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

A) True
B) False

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Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. Relative to the free-trade outcome, the imposition of the tariff A) decreases imports of the good by 300 units and increases domestic production of the good by 300 units. B) decreases imports of the good by 300 units and increases domestic production of the good by 600 units. C) decreases imports of the good by 600 units and increases domestic production of the good by 300 units. D) decreases imports of the good by 600 units and increases domestic production of the good by 600 units. -Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. Relative to the free-trade outcome, the imposition of the tariff


A) decreases imports of the good by 300 units and increases domestic production of the good by 300 units.
B) decreases imports of the good by 300 units and increases domestic production of the good by 600 units.
C) decreases imports of the good by 600 units and increases domestic production of the good by 300 units.
D) decreases imports of the good by 600 units and increases domestic production of the good by 600 units.

E) B) and C)
F) None of the above

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Domestic producers of a good become worse off, and domestic consumers of a good become better off, when a country begins allowing international trade in that good and


A) the country becomes an importer of the good as a result.
B) the world price exceeds the domestic price of the good that prevailed before international trade was allowed.
C) the country in question has a comparative advantage, relative to other countries, in producing the good.
D) total surplus does not change as a result.

E) A) and D)
F) None of the above

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The results of a 2008 Los Angeles Times poll suggest that the percentage of Americans who believe trade is harmful to the economy exceeds the percentage of Americans who believe trade is beneficial to the economy.

A) True
B) False

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Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that


A) Spain imports olive oil.
B) the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed.
C) consumer surplus in Spain would exceed producer surplus in Spain if trade with other countries were not allowed.
D) All of the above are correct.

E) None of the above
F) All of the above

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If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia


A) should import coffee.
B) has a comparative advantage in coffee and should export coffee.
C) should produce just enough coffee to satisfy domestic demand.
D) should produce no coffee domestically.

E) B) and C)
F) C) and D)

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A tariff increases the quantity of imports and moves the market farther from its equilibrium without trade.

A) True
B) False

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If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price, then it must be the case that


A) both consumer surplus and producer surplus increase.
B) consumer surplus increases and producer surplus decreases.
C) consumer surplus decreases and producer surplus increases.
D) both consumer surplus and producer surplus decrease.

E) C) and D)
F) All of the above

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

E) A) and B)
F) A) and C)

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Figure 9-29 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. Figure 9-29 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 9-29. If the country allows free trade, will the country import or export this good, and how many units will be imported/exported? -Refer to Figure 9-29. 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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With trade...

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Figure 9-17 Figure 9-17 -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff A) decreases imports of the good by 16 units and increases domestic production of the good by 8 units. B) decreases imports of the good by 16 units and increases domestic production of the good by 16 units. C) decreases imports of the good by 24 units and increases domestic production of the good by 8 units. D) decreases imports of the good by 24 units and increases domestic production of the good by 24 units. -Refer to Figure 9-17. Relative to the free-trade outcome, the imposition of the tariff


A) decreases imports of the good by 16 units and increases domestic production of the good by 8 units.
B) decreases imports of the good by 16 units and increases domestic production of the good by 16 units.
C) decreases imports of the good by 24 units and increases domestic production of the good by 8 units.
D) decreases imports of the good by 24 units and increases domestic production of the good by 24 units.

E) A) and B)
F) A) and C)

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