Question : 21) If the world price of a good below the : 1239209

21) If the world price of a good is below the no-trade domestic price, a country

A) will benefit from exporting the good.

B) will benefit from importing the good.

C) cannot benefit from trade.

D) has a comparative advantage in the production of that good.

E) will not engage in trade for that good.

22) Suevania opens its doors to trade with Barvania. Barvania has a comparative advantage in the production of machinery. Hence, once trade occurs Suevania’s consumers will buy ________ machinery and pay ________ before.

A) more; a higher price than

B) more; a lower price than

C) less; a higher price than

D) less; a lower price than

E) the same amount of; the same price as

23) If a nation imports a good that can be domestically produced, what happens to the quantity consumed of the good and why?

A) The quantity consumed increases because the market price decreases.

B) The quantity consumed decreases because the market price increases.

C) The quantity consumed remains constant because the price is unchanged.

D) The quantity consumed increases because the nation produces more of the good.

E) The quantity consumed decreases because the market price decreases.

24) A country will export a good if it

A) can sell the good to a foreigner at a higher price than the no-trade domestic price.

B) can sell the good to a foreigner at a lower price than the no-trade domestic price.

C) can dump the good on the world market.

D) has a high opportunity cost of production.

E) is impossible to import the good.

25) A country exports a good if

A) it has a high opportunity cost of production.

B) the world price of the good is below the country’s no-trade equilibrium price.

C) the world price of the good is above the country’s no-trade equilibrium price.

D) the quantity demanded of the good in the country is greater than the quantity supplied at the world price.

E) it cannot import the good.

26) A nation will export a good if its

A) no-trade, domestic price is equal to the world price.

B) no-trade, domestic price is less than the world price

C) no-trade, domestic price is greater than the world price.

D) no-trade, domestic quantity is less than the world quantity.

E) no-trade, domestic quantity is greater than the world quantity.

27) As a result of importing a good, domestic consumers ________ the quantity consumed and the price of the good ________.

A) increase; rises

B) increase; falls

C) decrease; rises

D) decrease; falls

E) increase; does not change

28) As a result of importing a good, domestic producers ________ the quantity produced and the price of the good ________.

A) increase; rises

B) increase; falls

C) decrease; rises

D) decrease; falls

E) decrease; does not change

29) The above figure shows the U.S. market for flip-flops. When there is no international trade, the U.S. price is ________ per flip-flop and the U.S. quantity is ________ flip-flops.

A) $12; 300,000

B) $14; 500,000

C) $12; 700,000

D) $14; 300,000

E) $14; 700,000

30) The above figure shows the U.S. market for flip-flops. With international trade, the equilibrium price in the United States is ________ and the United States ________ flip-flops.

A) $12; imports

B) $12; does not trade

C) $12; exports

D) $14; imports

E) $14; does not trade