Principles of Economics Asia Pacific 7Th Edition Gans Test Bank Full Chapter PDF

Principles Of Economics Asia Pacific
7th Edition Gans Test Bank

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CHAPTER 9 – Application: International trade
TRUE/FALSE
1. Trade among nations is ultimately based on absolute advantage.
ANS: F PTS: 1 DIF: Easy TOP: The determinants of

trade
2. One of the important outcomes of international trade is that countries specialise in the output of
things they are best at.
ANS: T PTS: 1 DIF: Easy TOP: The world price and

comparative advantage
3. A country is likely to import a good if its domestic price is high, relative to the world price.
ANS: T PTS: 1 DIF: Easy TOP: The gains and losses of

an importing country
4. If the domestic price of a good is low relative to the world price, the country has a comparative
advantage in producing that good.

an exporting country
5. Without free trade, the import price of a good must be equal to the export price of a good.
ANS: F PTS: 1 DIF: Easy TOP: The gains and losses of

6. If Peru exports coffee to the rest of the world, Peruvian consumers of coffee are worse off as a
result of trade, but Peruvian producers of coffee are better off.
ANS: T PTS: 1 DIF: Moderate TOP: The gains and losses of

7. If Australia imports toys from other countries, this means the world price of toys is lower than the
Australian price of toys.

8. If Colombia exports coffee to the rest of the world, Colombian coffee sellers benefit from higher
producer surplus. Colombian coffee buyers are worse off because of lower consumer surplus, but
total surplus in Colombia increases because of trade.

9. In general, if a country allows trade and becomes an importer of a good, domestic producers of the
good are worse off, domestic consumers of the good are better off, but the economic wellbeing of
the country increases.

10. In general, importing will always increase the wellbeing of a country if the world price of a good is
lower than the domestic price.

11. Suppose that Tonga, a small country, imports apples at the world price of $4 per kilogram. If
Tonga imposes a tariff of $1 per kilogram on imported apples, the price of apples in Tonga will
increase, but by less than $1, ceteris paribus.
ANS: F PTS: 1 DIF: Moderate TOP: The effects of a tariff
12. If a tariff is placed on clocks, the price of both domestic and imported clocks will rise by the
amount of the tariff.
ANS: T PTS: 1 DIF: Easy TOP: The effects of a tariff
13. Suppose France imposes a tariff on imported US computers. The tariff will raise the price of
computers and will make both French producers and consumers of computers worse off.
14. The decrease in total surplus that results from a tariff or quota is called the gains from trade.
ANS: F PTS: 1 DIF: Easy TOP: The effects of a tariff
15. If a small country imposes a tariff on an imported good, domestic sellers will gain producer
surplus, the government will gain tariff revenue and domestic consumers will gain consumer
surplus.
16. Suppose that Australia imposes a tariff on imported computer chips. If the increase in producer
surplus is $100 million, the increase in tariff revenue is $200 million and the reduction in consumer
surplus is $500 million, then the deadweight loss of the tariff is $200 million.
ANS: T PTS: 1 DIF: Moderate TOP: The effects of a tariff
17. Tariffs cause deadweight loss because they move the price of an imported product closer to the
equilibrium price without trade, thus reducing the gains from trade.
ANS: T PTS: 1 DIF: Easy TOP: The effects of a tariff
18. Import quotas increase the domestic price of the product to at least the world price.
ANS: T PTS: 1 DIF: Easy TOP: The effects of an import

quota
19. Import quotas and tariffs both cause the quantity of imports to fall.
ANS: T PTS: 1 DIF: Easy TOP: The effects of an import

quota
20. An import quota increases domestic producer surplus and the surplus of import licence holders,
reduces domestic consumer surplus, and creates deadweight loss.
ANS: T PTS: 1 DIF: Moderate TOP: The effects of an import

quota
21. If an import tariff is imposed on a good produced exclusively for export, the tariff will reduce the
quantity of the good produced.
ANS: F PTS: 1 DIF: Moderate TOP: The effects of an import

tariff
22. A quota can potentially cause an even larger deadweight loss than a tariff.
ANS: T PTS: 1 DIF: Moderate TOP: The effects of an import

quota
23. If country A produces all goods at a cheaper price than country B, country B will specialise in
producing the goods for which it has comparative advantage.
ANS: T PTS: 1 DIF: Easy TOP: The jobs argument
24. Benefits from free trade include increased variety of goods and increased competition.
ANS: T PTS: 1 DIF: Easy TOP: FYI: Other benefits of

international trade
25. Free trade causes job losses in industries in which a country does not have a comparative
advantage but it also causes job gains in industries in which the country has a comparative
advantage.
ANS: T PTS: 1 DIF: Moderate TOP: The jobs argument
26. Sometimes countries suffer a net loss of jobs due to free trade, because they do not have a
comparative advantage in producing anything.
ANS: F PTS: 1 DIF: Moderate TOP: The jobs argument
27. Australia should always be a net exporter of wheat.
ANS: F PTS: 1 DIF: Moderate TOP: The national security

argument
28. Economists like the infant industry argument because it is easy to implement in practice.
ANS: F PTS: 1 DIF: Easy TOP: The infant industry

argument
29. Many economists oppose the infant industry argument because it is difficult to remove.
ANS: T PTS: 1 DIF: Easy TOP: The infant industry

argument
30. In practice, it has proven to be extraordinarily difficult for governments to pick the right infant
industries to protect.
ANS: T PTS: 1 DIF: Easy TOP: The infant industry

argument
31. If Japan subsidised the production of rice and then exported the rice to Australia at artificially low
prices, then the Australian economy would be worse off.
ANS: F PTS: 1 DIF: Moderate TOP: The arguments for

restricting trade
32. A multilateral approach to free trade has the potential to increase the gains from trade more than a
unilateral approach does, because the multilateral approach can reduce trade restrictions abroad as
well as at home.
ANS: T PTS: 1 DIF: Moderate TOP: Case study: Trade

agreements and the World Trade Organization
33. The Closer Economic Relations agreement between New Zealand and Australia is designed to
ensure both Australia and New Zealand can exercise their own comparative advantage.
ANS: T PTS: 1 DIF: Moderate TOP: The winners and losers

from trade
MULTIPLE CHOICE
1. When goods that are produced in China are sold to Australia, the goods are:
A. exported by Australia and imported by China
B. imported by Australia and exported by China
C. exported by Australia and exported by China
D. imported by Australia and imported by China
ANS: B PTS: 1 DIF: Easy TOP: The determinants of

trade
2. Indonesia and Australia engage in international trade because:

A. Indonesia has absolute advantage over Australia in producing all goods
B. both Indonesia and Australia have absolute advantage in producing some goods
C. both Indonesia and Australia have comparative advantage in producing some goods
D. Australia has comparative advantage over Indonesia in producing all goods
ANS: C PTS: 1 DIF: Moderate TOP: The winners and losers

from trade
3. When Ford and General Motors import automobile parts from Mexico at prices below those they
must pay in the US:
A. workers who assemble Ford and General Motors vehicles become worse off
B. US consumers, taken as a group, become worse off
C. Mexican consumers, taken as a group, become worse off
D. American companies that manufacture automobile parts become worse off
ANS: D PTS: 1 DIF: Moderate TOP: The gains and losses of

4. The main justification for imposing restrictions on free international trade is:
A. to protect foreign producers
B. to support foreign consumers
C. to protect domestic producers
D. to support domestic consumers
ANS: C PTS: 1 DIF: Easy TOP: The winners and losers

from trade
5. If a country allows trade and the price of a good falls as a result:

A. the domestic price is higher than the world price and the country will import the good
B. the domestic price is lower than the world price and the country will import the good
C. the domestic price is higher than the world price and the country will export the good
D. the domestic price is lower than the world price and the country will export the good
ANS: A PTS: 1 DIF: Easy TOP: The gains and losses of

6. If a country allows trade and the domestic price of a good is lower than the world price:
A. the country will become an exporter of the good.
B. the country will become an importer of the good
C. the country will neither export nor import the good
D. additional information about demand is needed to determine whether the country will
export or import the good

7. A country is deemed to have a comparative advantage in a product if:

A. the world price is lower than its domestic price
B. the world price is higher than its domestic price
C. the world price is equal to its domestic price
D. none of the above
ANS: B PTS: 1 DIF: Easy TOP: The gains and losses of

8. The world price is:

A. the price that arises in the world market through supply and demand
B. the lowest price for which a producer will supply a good
C. the price at which a domestic producer will sell a good in an economy without trade
D. the price that gives the domestic market a comparative advantage
ANS: A PTS: 1 DIF: Easy TOP: The world price and

comparative advantage
9. A quota is:
A. a type of tax imposed on imports
B. a physical limit on the quantity of internationally traded goods
C. a physical limit on the tax level on internationally traded goods
D. a tool to encourage imports into a country
ANS: B PTS: 1 DIF: Easy TOP: The effects of an import

quota
10. When a quota is imposed on a market, the:

A. supply curve (above the world price) shifts to the right by the amount of the quota
B. supply curve (above the world price) shifts to the left by the amount of the quota
C. demand curve (above the world price) shifts to the right by the amount of the quota
D. demand curve (above the world price) shifts to the left by the amount of the quota
ANS: A PTS: 1 DIF: Moderate TOP: The effects of an import

quota
11. A tariff and an import quota will both:

A. increase the quantity of imports and raise domestic price
B. increase the quantity of imports and lower domestic price
C. reduce the quantity of imports and raise domestic price
D. reduce the quantity of imports and lower domestic price
ANS: C PTS: 1 DIF: Moderate TOP: The effects of an import

quota
12. Suppose a country becomes more open to trade and imports increase. This means that:
A. everyone in the country benefits from trade
B. the losses of the losers is less than the gains of the winners
C. the losses of the losers exceed the gains of the winners
D. everyone in the country loses from the trade
ANS: B PTS: 1 DIF: Easy TOP: Figure 9.5: How free

trade affects welfare in an importing country
13. When a country allows trade and becomes an importer of a good, which of the following is NOT
true?
A. the gains of domestic consumers exceed the losses of domestic producers
B. the losses of domestic producers exceed the gains of domestic consumers
C. the price paid by domestic consumers of the good decreases
D. the price received by domestic producers of the good decreases
ANS: B PTS: 1 DIF: Easy TOP: Figure 9.5: How free

14. When a country allows trade and becomes an exporter of a good:

A. both domestic producers and domestic consumers are better off
B. domestic producers are better off and domestic consumers are worse off
C. domestic producers are worse off and domestic consumers are better off
D. both domestic producers and domestic consumers are worse off

15. If France has a comparative advantage in producing cheese and it allows trade:
A. everyone in the country benefits
B. everyone in the country loses
C. the gains of the producers exceed the losses of the consumers
D. the losses of the consumers exceed the gains of the producers
ANS: C PTS: 1 DIF: Easy TOP: The gains and losses of

16. When a country allows trade and becomes an exporter of a good, consumer surplus:
A. and producer surplus will increase
B. and producer surplus will decrease
C. will increase and producer surplus will decrease
D. will decrease and producer surplus will increase

17. When a country allows free trade:

A. the domestic price will be greater than the world price
B. the domestic price will be lower than the world price
C. the domestic price will equal the world price
D. it does not matter what the world price is, the domestic price is the prevailing price

Graph 9-1
This graph refers to the market for beef in Japan.
18. According to Graph 9-1, if trade in beef is allowed, Japan:

A. will become an importer of beef
B. will become an exporter of beef
C. could become either an importer of beef or an exporter of beef
D. will neither import nor export beef
ANS: A PTS: 1 DIF: Moderate TOP: The gains and losses of

19. According to Graph 9-1, if the world price rose to $6 and trade in beef is allowed, the price of beef
in Japan will be:
A. $5 per pound
B. $2 per pound
C. between $2 per pound and $5 per pound
D. $6 per pound

20. According to Graph 9-1, if trade in beef is allowed, Japanese beef:

A. consumers and Japanese beef producers will gain
B. consumers and Japanese beef producers will lose
C. consumers will gain, and Japanese beef producers will lose
D. producers will gain, and Japanese beef consumers will lose
ANS: C PTS: 1 DIF: Moderate TOP: The gains and losses of

21. Which one of the According to Graph 9-1, if trade in beef is allowed, Japanese:
A. consumer surplus will increase and producer surplus will decrease
B. consumer surplus will decrease and producer surplus will increase
C. producer surplus and consumer surplus will increase
D. producer surplus and consumer surplus will be unaffected
ANS: A PTS: 1 DIF: Moderate TOP: How free trade affects

welfare in an importing country
Graph 9-2
This graph refers to the market for saddles in Argentina.

22. According to Graph 9-2, the equilibrium price and the equilibrium quantity of saddles in Argentina
before trade would be:
A. P1, Q2
B. P1, Q1
C. P0, Q0
D. P0, Q1

23. According to Graph 9-2, the price and quantity demanded of saddles in Argentina after trade would
be:
A. P1, Q2
B. P1, Q1
C. P0, Q0
D. P0, Q1
ANS: B PTS: 1 DIF: Moderate TOP: The gains and losses of

24. According Graph 9-2, the quantity of saddles exported from Argentina is:
A. Q0 minus Q1
B. Q2 minus Q1
C. Q2 minus Q0
D. Q0

Graph 9-3
25. In Graph 9-3, the free-trade price and quantity demanded would be:
A. P1, Q1
B. P1, Q4
C. P2, Q2
D. P2, Q3
ANS: B PTS: 1 DIF: Difficult TOP: The effects of an import

quota
26. In Graph 9-3, the equilibrium price and quantity after the quota would be:
A. P1, Q1
B. P1, Q4
C. P2, Q2
D. P2, Q3
ANS: D PTS: 1 DIF: Difficult TOP: The effects of an import

quota
27. In Graph 9-3, after the quota, imports would be equal to:
A. Q4 minus Q1
B. Q3 minus Q2
C. Q3 minus Q1
D. Q2 minus Q1

quota
28. In Graph 9-3, after the quota, deadweight loss would be equal to:
A. E
B. B
C. D + F
D. B + D + E + F
ANS: C PTS: 1 DIF: Difficult TOP: The effects of an import

quota
29. In Graph 9-3, area G represents:

A. consumer surplus under free trade
B. producer surplus under free trade
C. a surplus for import licence holders
D. producer surplus before trade

quota
Graph 9-4
This graph refers to the market for kiwifruit in New Zealand.
30. According to Graph 9-4, consumer surplus in New Zealand before trade the trade in kiwifruit is:
A. A
B. A + B
C. A + B + D
D. C

31. According to Graph 9-4, consumer surplus in New Zealand after the trade in kiwifruit is:
A. A
B. A + B
C. A + B + C
D. C
ANS: A PTS: 1 DIF: Moderate TOP: Figure 9.3: How free

trade affects welfare in an exporting country
32. According to Graph 9-4, producer surplus in New Zealand before trade is:
A. A
B. A + B
C. C + B + D
D. C
ANS: D PTS: 1 DIF: Easy TOP: Figure 9.3: How free

33. According to Graph 9-4, producer surplus in New Zealand after trade is:
A. A
B. A + B
C. C + B + D
D. C
ANS: C PTS: 1 DIF: Moderate TOP: Figure 9.3: How free
34. According to Graph 9-4, total surplus in New Zealand before the trade in kiwifruit is:
A. A + B
B. A + B + C
C. A + B + C + D
D. B + C + D

35. According to Graph 9-4, total surplus in New Zealand after the trade in kiwifruit is:
A. A + B
B. A + B + C
C. A + B + C + D
D. B + C + D
ANS: C PTS: 1 DIF: Moderate TOP: Figure 9.3: How free

36. According to Graph 9-4, the change in total surplus in New Zealand because of the trade in
kiwifruit is:
A. A
B. B
C. C
D. D
ANS: D PTS: 1 DIF: Moderate TOP: Figure 9.3: How free

Graph 9-5
This graph refers to the market for oil in Spain.

37. According to Graph 9-5, the price and quantity of oil in Spain before trade would be:
A. P0, Q0
B. P1, Q1
C. P1, Q2
D. P1, Q0

38. According to Graph 9-5, the price of oil and the quantity demanded in Spain after trade would be:
A. P1, Q1
B. P1, Q2
C. P1, Q0
D. P0, Q0

39. According to Graph 9-5, the quantity of oil imported into Spain is:
A. Q0
B. Q1
C. Q2
D. Q2 minus Q1

Graph 9-6
40. According to Graph 9-6, equilibrium price and quantity before trade would be:
A. $20, 2000
B. $20, 2400
C. $10, 2000
D. $10, 2400
ANS: D PTS: 1 DIF: Easy TOP: The gains and losses of
41. According to Graph 9-6, the price and domestic quantity demanded after trade would be:
A. $20, 2000
B. $20, 2800
C. $10, 2000
D. $10, 2800
ANS: A PTS: 1 DIF: Moderate TOP: The gains and losses of

42. According to Graph 9-6, domestic production and domestic consumption after trade would be:
A. 2400, 2000
B. 2800, 2000
C. 2000, 2400
D. 2000, 2800

43. According to Graph 9-6, consumer surplus before trade would be:
A. $20 000
B. $24 000
C. $40 000
D. $48 000
ANS: B PTS: 1 DIF: Moderate TOP: Figure 9.3: How free

44. According to Graph 9-6, consumer surplus after trade would be:
A. $10 000
B. $12 000
C. $20 000
D. $24 000

45. According to Graph 9-6, producer surplus before trade would be:
A. $8000
B. $9600
C. $16 000
D. $19 200

46. According to Graph 9-6, producer surplus after trade would be:
A. $21 600
B. $25 200
C. $43 200
D. $50 400
47. According to Graph 9-6, how many units of this product would be exported after trade is allowed?
A. 400
B. 800
C. 2400
D. 2800

Graph 9-7
48. According to Graph 9-7, equilibrium price and quantity before trade would be:
A. $19 400
B. $19 800
C. $15 400
D. $15 600
ANS: D PTS: 1 DIF: Easy TOP: The gains and losses of

49. According to Graph 9-7, the price and quantity demanded after trade would be:
A. $9300
B. $9900
C. $15 400
D. $15 600

50. According to Graph 9-7, domestic production and domestic consumption after trade would be:
A. 600, 600
B. 600, 300
C. 300, 900
D. 600, 900
ANS: C PTS: 1 DIF: Moderate TOP: The gains and losses of

51. According to Graph 9-7, consumer surplus before trade would be:
A. $1600
B. $2400
C. $3200
D. $3600

52. According to Graph 9-7, consumer surplus after trade would be:
A. $3600
B. $5400
C. $7200
D. $8100

53. According to Graph 9-7, producer surplus before trade would be:
A. $3600
B. $4400
C. $5200
D. $6600

54. According to Graph 9-7, producer surplus after trade would be:
A. $900
B. $1100
C. $1500
D. $2000

55. If the price of torches in Estonia is $100 and the world price is $150, how would producer surplus
change if Estonia opened to world trade?
A. it would rise by $50
B. it would rise by more than consumer surplus would fall
C. it wouldn’t change but consumer surplus would rise
D. it would change by the same amount as consumer surplus

Graph 9-8
56. In Graph 9-8, the free-trade price and quantity demanded would be:
A. P1, Q1
B. P1, Q4
C. P2, Q2
D. P2, Q3

57. In Graph 9-8, the domestic price and quantity demanded after the tariff would be:
A. P1, Q1
B. P1, Q4
C. P2, Q2
D. P2, Q3
ANS: D PTS: 1 DIF: Difficult TOP: The effects of a tariff
58. In Graph 9-8, consumer surplus with free trade would be:
A. A
B. A + B
C. A + C + G
D. A + B + C + D + E + F
ANS: D PTS: 1 DIF: Difficult TOP: Figure 9.5: How free

59. In Graph 9-8, producer surplus with free trade would be:
A. G
B. C + G
C. A + C + G
D. A + B + C + G
ANS: A PTS: 1 DIF: Difficult TOP: Figure 9.5: How free
60. In Graph 9-8, consumer surplus after the tariff would be:
A. A
B. A + B
C. A + C + G
D. A + B + C + D +E + F
ANS: B PTS: 1 DIF: Difficult TOP: The effects of a tariff
61. In Graph 9-8, producer surplus after the tariff would be:
A. G
B. C + G
C. A + C + G
D. A + B + C + G
ANS: B PTS: 1 DIF: Difficult TOP: The effects of a tariff
62. In Graph 9-8, as a result of the tariff, government tariff revenue would be:
A. E
B. B
C. D + F
D. B + D + E + F
ANS: A PTS: 1 DIF: Difficult TOP: The effects of a tariff
63. In Graph 9-8, as a result of the tariff, deadweight loss would be:
A. E
B. B
C. D + F
D. B + D + E + F
ANS: C PTS: 1 DIF: Difficult TOP: The effects of a tariff
64. Which of the following is NOT a function of the World Trade Organization?
A. enforcing the multilateral approach to free trade
B. administration of trade agreements
C. provision of a forum for negotiations between member countries
D. handling of disputes arising among member countries
ANS: A PTS: 1 DIF: Easy TOP: The national security

argument
65. Which of the following is NOT an argument for restricting trade?

A. the jobs argument
B. the national security argument
C. the infant industry argument
D. the efficiency argument
ANS: D PTS: 1 DIF: Moderate TOP: The arguments for

restricting trade
66. “Lower costs through economies of scale” refers to:
A. one of the reasons for restricting international trade
B. the advantage that can sometimes arise when companies can sell to international markets
C. the way in which big companies can dominate domestic markets when there is no trade
D. the increased variety of goods that can be accessed in a free-trade economy
ANS: B PTS: 1 DIF: Moderate TOP: Other benefits of

international trade
67. ‘Tariffs are needed to reduce imports during times of recession in order to increase domestic
output.’ This statement would be most closely associated with which argument for restricting
trade?
A. the jobs argument
B. the infant industry argument
C. the national security argument
D. the unfair competition argument
ANS: A PTS: 1 DIF: Moderate TOP: The jobs argument
68. When resources devoted to lobbying are included in the analysis of restrictions to international
trade:
A. deadweight losses may increase.
B. deadweight losses from fall
C. the welfare of domestic consumers will increase
D. domestic prices will equal world prices
ANS: A PTS: 1 DIF: Difficult TOP: Figure 9.5: How free

69. The infant industry argument:

A. is based on the belief that protecting industries when they are young will pay off later
B. is based on the belief that protecting industries producing goods and services for infants is
necessary if a country is to have healthy children
C. has the support of most economists
D. has proven to be correct in nearly all cases
ANS: A PTS: 1 DIF: Easy TOP: The infant industry

argument
70. Which of the following is NOT a claim policymakers often use to justify imposing a tariff?
A. protection is necessary in order for young industries to grow up and be successful
B. the threat of a trade restriction will encourage other countries to remove existing trade
restrictions
C. protection is sometimes necessary because many countries protect their industries
D. trade restrictions will cause wages in certain domestic industries to rise
ANS: D PTS: 1 DIF: Moderate TOP: The arguments for

restricting trade
SHORT ANSWER
1. Suppose that Australia and China do not trade with each other. If they then allow trade and
Australia becomes an exporter of mineral products to China, which group or groups in each
country are better off, and which are worse off?
ANS:
Mineral producers in Australia are better off and mineral producers in China are worse off.
Consumers of mineral products in Australia are worse off and consumers of mineral products in
China are better off.
PTS: 1 DIF: Moderate TOP: The winners and losers from trade
2. Suppose that China can produce every product at an absolutely lower cost than can Australia. Does
it pay for China to trade with Australia? Explain.
ANS:
Since international trade is based on comparative advantage and comparative advantage depends
on relative prices or opportunity cost, it is almost certain that Australia and China will each have
comparative advantage in the production of some goods; hence, it will pay for them to trade with
each other.
PTS: 1 DIF: Moderate TOP: The world price and comparative advantage
3. The before-trade domestic price of pepper in India is $15 per tonne. The world price of pepper is
$25 per tonne. India is a price taker in the pepper market. Given this information, answer the
following questions.
a. Will India import or export pepper?
b. What will the price of pepper be in India if free trade is allowed?
c. Who will benefit from free trade in this case?
d. Who will lose from free trade?
ANS:
a. India will export pepper because the world price is above the domestic price
b. the price of pepper in India will now be $25, the same as the world price
c. producers in India will benefit because of a higher price for pepper
d. consumers in India will lose because they will have to pay a higher price for their pepper
PTS: 1 DIF: Moderate TOP: The gains and losses of an exporting country
4. Suppose that a country that has been isolated from the rest of the world decides to open its borders
to international trade. The country produces chickens and soccer balls. On what basis can the
country decide which good to import and which good to export?
ANS:
The country should export the good in which it has a comparative advantage. Comparative
advantage is determined by looking at the domestic price relative to the world price. If the
domestic price is lower than the world price, the country has a comparative advantage and should
export the product. If the domestic price is higher than the world price, the country does not have a
comparative advantage and should import the product.
PTS: 1 DIF: Moderate TOP: The gains and losses of an exporting country
Graph 9-9
5. Using Graph 9-9, fill-in the answers for the following questions.
a. consumer surplus before trade would be area(s) _______________.
b. consumer surplus after trade would be area(s) _______________.
c. producer surplus before trade would be area(s) _______________.
d. producer surplus after trade would be area(s) _______________.
e. total surplus before trade would be area(s) ______________.
f. total surplus after trade would be area(s) ______________.
ANS:
a. A + B
b. A
c. C
d. C + B + D
e. A + B + C
f. A + B + C + D
PTS: 1 DIF: Moderate TOP: Figure 9.3: How free trade affects welfare in an
exporting country
Graph 9-10
6. Using Graph 9-10, fill-in the answers for the following questions.
a. consumer surplus before trade would be area(s) _______________.
b. consumer surplus after trade would be area(s) _______________.
c. producer surplus before trade would be area(s) _______________.
d. producer surplus after trade would be area(s) _______________.
e. total surplus before trade would be area(s) ______________.
f. total surplus after trade would be area(s) ______________.
ANS:
a. A
b. A + B + D
c. B + C
d. C
e. A + B + C
f. A + B + C + D
PTS: 1 DIF: Moderate TOP: Figure 9.5: How free trade affects welfare in an
importing country
7. The government of Ecuador is considering imposing a quota on quinoa imports. The Ecuadorian
price of quinoa is above the world price. What will be the effects of imposing an import quota on
quinoa? Who will make a profit out of this policy? Who will lose?
ANS:
A quota on the importing of quinoa will benefit the license holders and disadvantage Ecuadorian
consumers. The license holders will make a profit on each unit of quinoa imported equal to the
difference between the Ecuadorian price of quinoa and the world price. Consumers will lose out
because the quota will cause the price of quinoa in Ecuador to rise above the world price.
PTS: 1 DIF: Difficult TOP: The effects of an import quota
Graph 9-11
8. Using Graph 9-11, assume that the government imposes an import quota of 20 hammers. Answer
the following questions, given this information.
a. What is the equilibrium price and quantity of hammers after the quota is imposed?
b. What is the quantity of hammers imported before the quota?
c. What is the quantity of hammers imported after the quota?
d. What is the amount of consumer surplus before the quota?
e. What is the amount of consumer surplus after the quota?
f. What is the amount of producer surplus before the quota?
g. What is the amount of producer surplus after the quota?
h. What would be the amount of deadweight loss due to the quota?
ANS:
a. $7, 70
b. 66
c. 20
d. $384
e. $210
f. $45
g. $125
h. $46
9. What is the effect on the economic wellbeing of a nation if a tariff on imports is imposed? Why?
ANS:
A tariff reduces the economic wellbeing of a nation by effectively imposing a tax on imports and
moving the domestic market back closer to equilibrium without trade. As a result, the gains from
trade are reduced and there is a deadweight loss.
PTS: 1 DIF: Moderate TOP: The effects of a tariff

10. Suppose that you are advising Russian policymakers on trade issues, and the issue of protection for
the Russian vodka industry comes up. You argue in favour of free trade but the policymakers are
convinced that some protection is needed. They are leaning in favour of an import quota. What will
you tell them about the relative effects of import quotas and equivalent tariffs on the wellbeing of
Russian vodka producers, Russian vodka consumers and the Russian government budget?
ANS:
A typical import quota has identical effects on Russian vodka producers (makes them better off)
and Russian vodka consumers (makes them worse off) as does an equivalent tariff. The effect on
the budget is different, however, since under the import quota there is no tariff revenue collected
by the government but an equivalent surplus accrues to the holders of the import licences. The
government could gain under an import quota if it charged a fee for the import licences equal to the
difference between the world price of vodka and the domestic price of vodka. Such a system would
make the import quota exactly like the tariff.
11. How does an import quota differ from an equivalent tariff?
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 licence holders.
PTS: 1 DIF: Moderate TOP: The effects of an import quota
12. When the free trade treaty CER was signed between New Zealand and Australia, opponents
claimed that New Zealand would suffer significant job losses to more efficient Australian
producers. Why would you not be surprised to learn that CER did not lift unemployment in either
country?
ANS:
In the short run, both Australia and New Zealand could expect to lose some jobs in industries
where there is no comparative advantage. Nonetheless, jobs were also created in industries where
there was a comparative advantage and over time, displaced workers were able to find alternative
employment.
PTS: 1 DIF: Difficult TOP: The infant industry argument
13. Serbia has a small but growing apple juice market. In the past, Serbia has not traded much apple
juice with other countries but now it is considering signing an agreement freeing up its apple juice
trade with Croatia. Some apple juice growers are worried about the effect that opening up trade
will have on their new industry and are meeting with the president to ask him to do something to
protect them. What argument might they make to the president? Do they have a good point?
ANS:
The apple farmers are making the infant industry argument to their President. They might propose
he levy a tariff or impose a quota on apple juice imports. The apple farmers want to protect their
industry from competition but many economists do not support this argument: if the industry
cannot stand up to competition then there is a question as to whether it will remain profitable in the
long run or stand up to other shocks. Also, it is very difficult for a government to choose the right
industries to protect, as many industries would want government help.
PTS: 1 DIF: Moderate TOP: The infant industry argument
14. What are the arguments in favour of trade restrictions and what are the counter-arguments?
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 on pp 196-200 of the text.
PTS: 1 DIF: Difficult TOP: The winners and losers from trade
15. Most economists argue that international trade increases social welfare. What are some of the other
benefits of international trade?
ANS:
Apart from an increase in consumer or producer surplus, there are a number of other benefits of
international trade. These include increased variety of goods, as different countries often produce
goods that are not exactly the same; lower costs through economies of scale when goods can be
produced in large quantities; increased competition when a countries allows competitors in from
elsewhere; and enhanced flow of ideas, as the transfer of technical advances can be shared around
the world.
PTS: 1 DIF: Difficult TOP: Other benefits of international trade
16. Suppose that Australia has a comparative advantage over the New Zealand in providing financial
services and New Zealand has a comparative advantage over Australia in producing milk products.
By reducing trade barriers, CER allowed both Australia and New Zealand to export more of the
products in which it enjoys a comparative advantage. Do all people in both countries benefit from
this free trade agreement? Explain.
ANS:
While overall economic wellbeing in both countries increases, not everyone benefits in the short
run. In particular, some workers in the New Zealand financial services become unemployed, and
some workers in the Australian dairy industry become unemployed. In the long run, displaced
workers will find employment in the industries that enjoy a comparative advantage.
PTS: 1 DIF: Difficult TOP: Figure 9.5: How free trade affects welfare in an
importing country
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The abdomen is full of oil, and is much prized as a delicacy by the
natives, who tell many strange legends about the creature, but the
philosopher may well find its structure more strange than fiction,
and the consideration of its morphology an intellectual feast.
The appearance of the thorax and of the thoracic limbs is
thoroughly Pagurid; the structure of the abdomen is highly peculiar.
From the ventral surface (Fig. 119) we can see at the tip of the tail
three small calcified plates, which represent the fifth and sixth terga
and the telson. Attached to the sixth segment are the much reduced
and rudimentary pleopods of that segment, and on the left hand side
of the body in the female are three well-developed pleopods of the
first, second, and third segments, which are used for carrying the
eggs. The extraordinary asymmetry of these limbs compared with the
complete symmetry of the abdomen itself is only explicable on the
hypothesis that these animals are descended from Hermit-crabs
which had lost the pleopods on the right side.
Fig. 119.—Birgus latro, ♀, × ⅙, ventral view. Ab, First pleopod; T,
last pereiopod.
These appendages are entirely absent in the male. The ventral

surface of the abdomen is curiously warty and rugose, and is very
soft and pulpy owing to the immense store of oil which it contains.
If we look at the dorsal surface of the abdomen we find that, unlike
that of the Hermit-crabs, it is completely protected by a number of
hard plates (Fig. 120, B). Beneath the carapace can be seen a number
of small plates belonging to the last thoracic segment; following
these there are four large plates (1–4) representing the terga of the
first four abdominal segments; the fifth, sixth, and the telson are, as
has been stated, carried on the under side of the abdomen, but they
are represented diagrammatically (5, 6, T) in the dorsal view. Besides
the large terga, there are a number of small plates laterally, usually
two to each segment, but they
show a tendency to subdivide and
increase in the largest specimens.
This condition of affairs is very
different to that in the naked
fleshy abdomen of an ordinary
Pagurid, but it can easily be
deduced from that of the genus
Cenobita, ordinary Hermit-crabs
found in the Indo-Pacific Oceans,
from which the Robber-crab has
evidently descended. In Cenobita
Fig. 120.—Dorsal view of abdomen, A, (Fig. 120, A) we see the same
of Cenobita, sp.; B, of Birgus latro. T, system of plates upon the dorsal
Telson; 1–6, 1st–6th abdominal surface of the abdomen, but they
segments.
are much smaller, and the lateral
plates are not so numerous;
indeed, the greater part of the abdomen remains fleshy and
uncalcified. The under surface of the abdomen shows the same
rugosity as is found in Birgus, and from a number of other
anatomical characters it is evident that the Robber-crab is a highly
modified Cenobita that has deserted its shell and developed a
symmetrical abdomen protected by expanded and hardened plates
which represent those found in a reduced condition in Cenobita. The
species of Cenobita although they inhabit shells and have normal
branchiae, live on the shore, and have not been seen to descend
actually into the sea.
The Lithodidae, which are found in temperate seas, especially on
the Northern Pacific coasts (though Lithodes maia occurs in the
North Sea, and certain species inhabit deep water in the Indian
Ocean), have a deceptively Brachyuran appearance, the thorax being
much shortened and the abdomen being much reduced and carried
tightly flexed on to the ventral surface of the thorax. They live a free,
unprotected existence, and are highly calcified. They are, however,
certainly Pagurids, as is evidenced by a number of anatomical
characters, but most clearly by the asymmetry of the abdomen,
especially in the female, which is not only markedly asymmetrical in
the arrangement of its dorsal plates (Fig. 121), but also in the
presence of three pleopods upon the left side only, as in Birgus. The
male is without these appendages, and the sixth pair of pleopods is
absent in both sexes. The remarkable calcified plates upon the
abdomen bear a superficial resemblance to those in Birgus, but their
evolution is traced, not from a Cenobite, but from an Eupagurine
stock.[144]
Fig. 121.—Lithodes maia, ♀, in ventral view, × ¼. The abdomen is

flexed on the thorax, so that its dorsal surface is seen. l.3, Lateral
plates of third abdominal segment; l.5, left lateral plate of fifth
abdominal segment; m, marginal plate; T, brush-like last
pereiopod; Te.6, telson and sixth abdominal segment.
In some of the Eupagurinae, e.g. Pylopagurus, feebly calcified

plates are present upon the segments of the abdomen (Fig. 122, A).
In the most primitive of the Lithodidae we witness the reduction
(Fig. 122, B) and disappearance (C) of these original plates, their
place being taken first by a number of irregularly situated small
spines and warts, which, however, subsequently fuse up to form
definite segmental plates. In Lithodes maia, ♂ (D), there are a series
of lateral and marginal plates, while in Acantholithus (E) a number
of median plates appear, presumably by the fusion of the small
spines present in the median line in Lithodes maia; finally, a fusion
of the marginal and lateral plates may take place, so that each
abdominal segment is covered by a median and two paired lateral
plates.
Fig. 122.—Diagrams of abdomen: A, of Pylopagurus, sp.; B, of

Hapalogaster cavicauda; C, of Dermaturus hispidus; D, of
Lithodes maia, ♂; E, of Acantholithus hystrix. c, Central plates; l,
lateral plates; m, marginal plates; T, telson; 1–6, 1st–6th
abdominal segments. (After Bouvier.)
It is to be noted that the males and females of the various species

do not follow a parallel course of development, the plates in the male
being symmetrical, while those of the female are often highly
asymmetrical (compare Figs. 122, D, and 121), thus giving the
strongest evidence of a Pagurid ancestry.
Birgus and the Lithodidae, then, are Pagurids which have given up
living in shells, and have become adapted to a free existence,
protecting their soft parts by the development of hard plates, and re-
acquiring, to a greater or less degree, a secondary symmetry of form.
But the story of Pagurid evolution does not apparently stop here. The
genus Paralomis, from the West Coast of America, superficially
resembles Porcellana, and is held to be descended from such forms
as Pylocheles, while isolated species are known (though not well
known), such as Tylaspis, described in the Challenger Reports,[145]
which appear to be Pagurids that have deserted their shells.
Fig. 123.—Four stages in the development of Eupagurus
longicarpus or E. annulipes, × 20. A, Ventral view of Zoaea; B,
lateral view of Metazoaea; C, dorsal view of Glaucothoe; D, dorsal
view of adolescent stage. Ab.6, 6th abdominal appendage; Mxp.1,
Mxp.3, 1st and 3rd maxillipedes. (After M. T. Thompson.)
The metamorphosis of the Hermit-crabs has recently been studied

by M. T. Thompson.[146]
The Zoaea (Fig. 123, A) differs from that of the Galatheidea mainly
in the absence of the long spines. It possesses the usual appendages
characteristic of the Zoaea, namely, the first and second antennae,
mandibles, first and second maxillae, and two pairs of biramous
swimming maxillipedes and small third maxillipedes. In the
Metazoaea (B), as in the Anomura generally, the third maxillipedes
develop into biramous swimming organs, a thing they never do in the
Brachyura, and the rudiments of the thoracic segments put in a first
appearance. The abdominal segments are already fully formed in the
Zoaea stage, so that here as in all other Zoaeas, the order of
development from in front backwards is disturbed by the precocious
differentiation of the abdominal segments. The next stage is the
“Glaucothoe” (Fig. 123, C), which corresponds to the Megalopa of
Brachyura (Fig. 125, p. 183). It differs from the adult Hermit-crab in
the perfect symmetry of its body, the segmented abdomen, and the
presence of five pairs of normal biramous pleopods. At this stage,
which lasts four or five days, it resembles closely a little Galatheid.
The asymmetry of the adult (Fig. 123, D) is now imposed upon this
larva by the migration of the liver, gonads, and green glands into the
abdomen, and by the shifting of the posterior lobes of the liver on to
the left side of the intestine, which is displaced dorsally and to the
right. The gonad lies entirely on the left side. The pleopods of the
right side now degenerate, more completely in the male than in the
female, and this degeneration is not completed until the little crab
has found a shell and lived in it for some time. If a shell is withheld
from it, the degeneration of the pleopods is much retarded, so that
although the Hermit-crab assumes its asymmetry without the
stimulus of the spiral shell, yet this stimulus is necessary for the
normal completion of the later stages.
Fam. 1. Pylochelidae.—The abdomen is macrurous and
symmetrical, with all the limbs present. Pylocheles (Fig. 118, p. 173).
Fam. 2. Paguridae.—The abdomen is asymmetrical, with some
of the limbs lost. The antennal scale is well developed, and the
flagella of the first antennae end in a filament.
Sub-Fam. 1. Eupagurinae.—The third maxillipedes are wide
apart at the base, and the right chelipedes are much larger than the
left. Parapagurus from deep-sea, Eupagurus from temperate,
especially north temperate seas. Pylopagurus.
Sub-Fam. 2. Pagurinae.—The third maxillipedes are
approximated at the base; the chelipedes are equal or subequal, or
the left is much larger. Chiefly in the warm and tropical seas, but
Clibanarius and Diogenes also in the Mediterranean.
Fam. 3. Cenobitidae.—The abdomen is as in Paguridae. The
antennal scale is reduced, the flagella of the first antennae end
bluntly. The members of this family are characteristic of tropical
beaches, where they live on the land. Cenobita, with about six
species, in the West Indies and Indo-Pacific, living in Mollusc shells;
Birgus (Fig. 119) on Indo-Pacific coral islands.
Fam. 4. Lithodidae.—The abdomen is bent under the thorax,
and the body is crab-like and calcified. The rostrum is spiniform, and
the sixth abdominal appendages are lost.
Sub-Fam. 1. Hapalogasterinae.—Abdomen not fully calcified,
and without complicated plates. Hapalogaster and Dermaturus in
the North Pacific littoral.
Sub-Fam. 2. Lithodinae.—Abdomen fully calcified, with a
complicated arrangement of plates. Lithodes (Fig. 121) practically
universal distribution, littoral and deep sea. Acantholithus, deep
littoral of Japan; Paralomis, west coast of America. This last genus
should probably be placed in a separate family.
Sub-Order 3. Brachyura.[147]
The abdomen is much reduced, especially in the male, and is

carried completely flexed on to the ventral face of the thorax so as to
be invisible from the dorsal surface. The pleopods in the male are
only present on the two anterior segments, and are highly modified
as copulatory organs; the pleopods in the female are four in number
and are used simply for carrying the eggs; the pleopods of the sixth
pair are always absent in both sexes. The first antennae and the
stalked eyes can be retracted into special pits excavated in the
carapace.
Fig. 124.—A, Zoaea, × 24, and B, Metazoaea, × 13, of Corystes
cassivelaunus. Ab, 3rd abdominal segment; An, 1st antenna; E,
eye; G, gills; M, 1st maxillipede; T.8, last thoracic appendage.
(After Gurney.)
The larva hatches out as a Zoaea[148] (Fig. 124, A) very similar to

that of the Anomura; it is furnished with an anterior and posterior
spine on the carapace. It is characteristic of the Brachyuran Zoaea
that the third maxillipede is fashioned from the beginning in its
definitive expanded form, and is never a biramous swimming organ
as in the Anomura. The only exception to this rule is found in the
Dromiacea, the most primitive of the Brachyura, to be soon
considered, in which not only the third maxillipede, but also the first
pair of pereiopods may be developed as biramous oars, a condition
taking one back to the Mysis stage of the Macrura. The Metazoaea
(Fig. 124, B) has the rudiments of the thoracic limbs developed and
crowded together at the back of
the carapace; they are all laid
down in their definitive forms,
and the abdomen has the
pleopods precociously developed.
These Zoaeal stages are of course
pelagic, but the Metazoaea next
passes into the Megalopa stage
(Fig. 125), in which the little crab
forsakes its pelagic life and
assumes the ground-habits of the
adult; the Megalopa, which
corresponds exactly to the
Glaucothoe of the Pagurids,
resembles a small Galathea or
Porcellana, the abdomen being
still large and unflexed and
furnished with normal pleopods.
From this stage the adult
structure is soon achieved,
though, owing to the continued
growth of the Crustacea even
after maturity is reached, there is
often a slight progressive change
in structure, especially in the
male, at each successive moult of
the individual. The Megalopa of
Corystes cassivelaunus is Fig.
the
125.—Later stage (Megalopa) in
development of Corystes
peculiar in the immense cassivelaunus, × 10. A, Antenna; Ab,
production of the second 3rd abdominal segment; C, great chela;
antennae, which act as a T.8, last thoracic appendage. (After
respiratory tube (Fig. 125). Gurney.)
The Brachyura must be
considered under the following subdivisions:—
Tribe 1. Dromiacea.
All authorities are agreed that these[149] are the most primitive of
the Brachyura. In them the abdomen is much less reduced in both
sexes than in other Brachyura; there is a common orbitoantennary
fossa, into which eyes and antennae are withdrawn, instead of a
separate one on each side for each organ; the carapace is often much
elongated as in the Macrura and Anomura, and a number of other
anatomical characters might be mentioned which characterise the
Dromiacea as intermediate between the true Brachyura and the
lower forms. There are, however, two views as to the relationship of
the Dromiacea; Claus held that they proceeded from a Galatheid
stock, and hence that the development of the Brachyura ran through
an Anomurous strain; but Huxley, and latterly Bouvier,[150] adopt the
view that the Dromiacea are descended, not from the Galatheidae,
but direct from the Macrura, and especially from the Nephropsidea.
Special resemblances are found between the Jurassic Nephropsidae
and certain present day Dromiacea, e.g. Homolodromia paradoxa,
the detailed form of the carapace in the two cases being very similar.
It is, however, a little strange that in the Dromiacea we meet with the
same reduction and dorsal position of the last, or last two pairs of
thoracic limbs which we saw to be such a characteristic feature of the
Anomura, especially of the Galatheidae. In the Dromiacea these
limbs may be chelate, and they are used for attaching shells and
other bodies temporarily to the back. Must we suppose that this
resemblance to the Anomura is due to convergence, or that the
Nephropsidae, which gave rise to perhaps both Galatheidae and
Dromiacea, had this character, and that it has been subsequently lost
in the Macruran stock? We have already mentioned that the
Metazoaea of Dromia has not only a well-developed swimming third
maxillipede, but also a biramous first pereiopod, a character which
speaks strongly for Macruran affinities.
Fam. 1. Dromiidae.—The eyes and antennules are retractile into
orbits. The last two pairs of thoracic limbs are small, and held
dorsally. The sixth pair of pleopods are rudimentary or absent.
Homolodromia from West Indies, deep-sea. Dromia, widely
dispersed. D. vulgaris (Fig. 126) occurs on the English coasts.
Fam. 2. Dynomenidae.—Similar to the preceding family, but
only the last pair of thoracic limbs is small, and held dorsally. The
sixth pair of pleopods are
reduced, but always present.
Dynomene in the Indo-Pacific.
Fam. 3. Homolidae.—The
eyes and antennules are not
retractile into orbits. Only the last
pair of thoracic limbs are
reduced, the sixth pair of
pleopods altogether absent.
Fig. 126.—Dromia vulgaris, × 1. (After Homola and Latreillia, widely
Milne Edwards and Bouvier.) distributed, occur in the
Mediterranean. Latreillopsis
[151]
from the Pacific. L. petterdi, a magnificent species, with the
carapace nearly a foot long, and with very long legs like a Spider-
crab, has been dredged from 800 fathoms east of Sydney, New South
Wales.
Tribe 2. Oxystomata.
This group comprises Crabs whose carapace is more or less

circular, while the mouth, instead of being square as in the
remaining Brachyura, is triangular with the apex pointing forward,
and the third maxillipedes are not expanded into the flattened, lid-
like structures found in other Crabs. There is the same tendency in
some of the genera for the posterior thoracic limbs to be reduced and
carried dorsally, as in the Galatheidae and Dromiacea. The well-
known Dorippe from the Mediterranean has this feature, and
frequently carries an empty shell upon its back, and Cymonomus[152]
presents the same peculiarity.
Fig. 127.—Cymonomus granulatus, × 1. A.1, A.2, 1st and 2nd
antennae; E, eye-stalk; S, extra-orbital spine of carapace. (After
Lankester.)
Cymonomus granulatus (Fig. 127) is an abyssal form that has

been dredged from the Mediterranean and North Atlantic, in which
the eye-stalks are curiously tuberculated, and the ommatidia of the
eye are entirely unpigmented and degenerate, though a few corneal
facets are still recognisable. This species is replaced by C. quadratus
in the Caribbean Sea and by C. normani on the East African coast, in
which the alteration of the eye-stalks into thorny, beak-like
projections becomes progressively marked, and all traces even of the
corneal facets disappear. This remarkable genus was mentioned in
the excursus on Crustacean eyes on p. 149.
The Oxystomata, like the Cyclometopa, to be considered later, live
in sandy and gravelly regions, and burrow to a greater or less extent,
and we find in both groups admirable adaptations for securing a pure
stream of water, uncontaminated by particles of sand, for flushing
the gills. Perhaps the most remarkable of these adaptations is
afforded by Calappa.[153] This animal has the chelipedes wonderfully
modified in structure, and when it is reposing in the sand it holds
them apposed to the front of the
carapace, as shown in Fig. 128, so
that the spines upon their edges,
together with the hairy margin of
the carapace, form a most
efficient filter for straining off
sand and grit from the stream of
water which is sucked down
between the closely-fitting
Fig. 128.—Calappa granulata, from in
front, × ½. C, Hand of chelipede; T, chelipedes and carapace, to enter
walking legs. (After Garstang.) the branchial chambers at their
sides. The exhaled current of
water passes out anteriorly
through a tube formed by a prolongation of the endopodites of the
first maxillipedes. The exhalant aperture is shown in Fig. 128 by the
two black cavities below the snout in the middle line.
A similar method is pursued by the related Matuta banksii[153]
(Fig. 129), a swimming and fossorial Crab found in the Indo-Pacific.
In this Crab the chelipedes also fit against the carapace to form a
strainer, and their function is assisted by the enlargement of the
posterior spine, which acts as a kind of elbow-rest to keep the
chelipedes properly in position. The inhalant openings are situated
just in front of the chelipedes. It is a most remarkable fact that
among the Cyclometopa, Lupa hastata (Fig. 131) has an exactly
similar arrangement. Apparently we have here another instance of
convergence, similar to that of Corystes and Albunea, but the case is
complicated by the fact that some of the Oxystomata, and among
them Matuta, show a certain amount of relationship to the
Cyclometopous Portunids, so that it is just conceivable that the
resemblances in the respiratory arrangement are due to a common
descent and not to convergence.
Fig. 129.—Dorsal view of Matuta banksii, × 1. (From an original
drawing prepared for Professor Weldon.)
In the Leucosiidae, of which the Mediterranean Ilia nucleus (Fig.

130) is an example, the inhalant aperture is situated between the
orbits, and leads into gutters excavated in the “pterygostomial
plates” flanking the mouth, which are furnished with filtering hairs
and are converted into closed canals by expansions of the exopodites
of the third maxillipedes. Thus these Crabs possess a filtering
apparatus independent of the chelipedes and of the margin of the
carapace.
Fam. 1. Calappidae.—Cephalothorax rounded and crab-like.
The abdomen is hidden under the thorax, the antennae are small,
and the legs normal in position. The afferent openings to the gill-
chambers lie in front of the chelipedes. Male openings on coxae of
last pair of legs. Calappa (Fig. 128) circumtropical, and extending
into the warmer temperate seas. Matuta (Fig. 129) from the Indo-
Pacific.
Fam. 2. Leucosiidae.—Similar to the above, but the afferent
openings to the gill-chambers lie at the bases of the third
maxillipedes. Male openings on
the sternum. This family contains
a great number of forms, with
headquarters in the tropical
littoral, but extending into the
temperate seas. Ilia in the
European seas. I. nucleus (Fig.
130) common in the
Mediterranean. Ebalia in the
Atlantic, North Sea, and Indo-
Pacific. Leucosia in Indo-Pacific.
Fam. 3. Dorippidae.—
Cephalothorax short and square.
The abdomen is not hidden under
the thorax; the antennae are
Fig. 130.—Dorsal view of Ilia nucleus, × large, and the last two pairs of
1. (From an original drawing prepared legs are held dorsally, and have
for Professor Weldon.) terminal hooked claws. Dorippe,
littoral in Mediterranean and
Indo-Pacific. Cymonomus (Fig.
127) from deep-sea of Atlantic and Mediterranean.
Fam. 4. Raninidae.—Similar to Dorippidae, but the
cephalothorax is elongated, and the legs usually have the last two
joints very broad. Several genera, chiefly in the deeper littoral zone.
Ranina dentata in the Indo-Pacific.
Tribe 3. Cyclometopa.
In these Crabs the carapace is circular rather than square; its

frontal and lateral margins are produced into spines and there is no
pointed rostrum. The mouth is square, and the third maxillipedes are
greatly flattened and form a lid-like expansion over the other oral
appendages. This group includes the common Shore-crab of our
coasts (Carcinus maenas), the swimming Crabs with expanded
pereiopods (Portunus, Lupa, etc.), the Edible Crab (Cancer
pagurus), and many others.
Corystes cassivelaunus is a Crab of doubtful affinities. It is
sometimes placed among the Oxyrhyncha, but, as Gurney[154] has
pointed out, the Megalopa shows Portunid characters, and the
resemblance to the Oxystomata in the front of the carapace and in
the mouth may be secondary. The respiratory arrangement of this
Crab has already been mentioned in comparing its structure with
that of the Mole-crab Albunea. The form of the antennal tube can be
gathered from the figure of the Megalopa stage (Fig. 125, p. 183). It
should be noted that when the Crab is buried in the sand with only
the tip of the antennal tube projecting, the water is sucked down and
enters the branchial cavities anteriorly, the antennal tube being
continued by a tube formed from the third maxillipedes and the
forehead; the water is exhaled at the sides of the branchial cavities
beneath the branchiostegites. Thus in Corystes the normal direction
of the current is reversed, but when the Crab is not buried, and is
moving over the surface, it breathes in the usual manner, taking in
the water at the sides of the branchiostegites and exhaling it
anteriorly by the tube. The related Atelecyclus, found like Corystes
very commonly at Plymouth, uses two methods of breathing: when it
is in the surface-layers of sand it makes use of its antennal tube,
which is, however, much shorter than in Corystes; but when it
burrows deeper, where the antennal tube is no use, it folds its
chelipedes and also its other legs, which are densely covered with
bristles, so as to form a reservoir of pure water underneath it free
from sand, which it passes through the gill-chambers in the usual
manner (see Garstang, loc. cit. p. 186).
The respiratory adaptations in Lupa hastata and their
convergence towards those of the Oxystomatous Matuta have been
already touched upon (pp. 186, 187).
In this connexion must be mentioned the interesting experiments
of W. F. R. Weldon[155] upon the respiratory functions of Carcinus
maenas at Plymouth, since these were the first noteworthy
observations directed towards the exact measurement of the action
of natural selection upon any animal, a field of observation in which
Weldon will always be looked upon as a pioneer. An extended series
of measurements by Weldon and Thompson on male specimens of
Carcinus maenas of various sizes between the years 1893 and 1898
showed a steady decrease in the ratio of carapace breadth to length;
the Crabs appeared to be becoming steadily narrower across the
frontal margin, and the same thing, though not to the same extent,
was happening in female Crabs. Weldon supposed that this change
might be correlated with the silting up of Plymouth Sound and the
consequent fouling of the water. To test this hypothesis he kept a
very large number of male Crabs in water to which fine porcelain clay
was added and kept in continual motion. In the course of the
experiments the survivors and the dead were measured, and it was
found that the mean carapace breadth of the survivors was less than
that of those that succumbed. The experiment was repeated with the
fine sand that is deposited and left at low water upon the stones on
Plymouth beach, and the same result was observed. It was also
noticed that the individuals which died had their gills clogged with
the sand, while those that survived had not. As a further
confirmation, a great many young male Crabs were isolated and kept
in pure filtered water, and they were measured before and after
moulting; these measurements, when compared with measurements
of the frontal breadth in Crabs of the same size taken at random
upon the beach, were found to show a greater breadth than the wild
Crabs, thus indicating that a selection of narrow Crabs was taking
place in Nature which did not take place when the Crabs were
protected from the effects of fine sand in the water.
The whole chain of evidence goes to show that the carapace
breadth in Carcinus maenas in Plymouth Sound is being influenced
by the rapid change of conditions occurring in the locality. Various
objections have been urged against this conclusion, but, though they
merit further investigation, they do not appear very weighty.
The fresh-water Crab, Thelphusa fluviatilis, common in the South
of Europe and on the North coast of Africa, belongs to the
Cyclometopa, and is interesting from its direct mode of development
without metamorphosis.
Fam. 1. Corystidae.—The orbits are formed, but, unlike all the
other families of the Cyclometopa, are incomplete. The body is
elongate and oval, and the rostrum and front edge of the mouth
rather as in the Oxyrhyncha, in which Tribe they are sometimes
included. Corystes, with a few species in European seas. C.
cassivelaunus at Plymouth.
Fam. 2. Atelecyclidae.—Perhaps related to the foregoing. The
carapace is sub-circular, and the rostrum short and toothed.
Atelecyclus, European seas.
Fam. 3. Cancridae.—The carapace is broadly oval or hexagonal,
and the flagella of the second antennae are short and not hairy as in
the foregoing. The first antennae fold lengthwise. Carcinus maenas
on English and North European coasts. This crab has become
naturalised in some unexplained manner in Port Phillip, Melbourne.
Cancer in North Atlantic, North Pacific, and along the west coast of
America into the Antarctic regions. C. pagurus is the British Edible
Crab.
Fam. 4. Portunidae.—The
legs are flattened and adapted for
swimming. The first antennae
fold back transversely. Portunus,
Atlantic and Mediterranean.
Neptunus, Indo-Pacific.
Callinectes, C. sapidus, the edible
blue Crab of the Atlantic coasts of
America. Lupa (Fig. 131).
Fam. 5. Xanthidae.—The
first antennae fold transversely,
but the legs are not adapted for Fig. 131.—Dorsal view of Lupa hastata,
swimming; the body is usually × 1. (From an original drawing
transversely oval. This family is prepared for Professor Weldon.)
especially characteristic of the
tropical littoral, where it is very
widely represented. Xantho, Actaea, Chlorodius, Pilumnus, Eriphia,
with E. spinifrons, common in the Mediterranean.
Fam. 6. Thelphusidae (Potamonidae).—Fresh-water crabs,
with the branchial region very much swollen. Thelphusa (or
Potamon) has nearly a hundred species distributed from North
Australia, through Asia, Japan, the Mediterranean region, and
throughout Africa. Potamocarcinus in tropical America.
Tribe 4. Oxyrhyncha.

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Principles Of Economics Asia Pacific

7th Edition Gans Test Bank

1. Trade among nations is ultimately based on absolute advantage.

ANS: F PTS: 1 DIF: Easy TOP: The determinants of

ANS: T PTS: 1 DIF: Easy TOP: The world price and

ANS: T PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: T PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: F PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: T PTS: 1 DIF: Moderate TOP: The gains and losses of

ANS: T PTS: 1 DIF: Moderate TOP: The gains and losses of

ANS: T PTS: 1 DIF: Moderate TOP: The gains and losses of

ANS: T PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: T PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: F PTS: 1 DIF: Moderate TOP: The effects of a tariff

ANS: T PTS: 1 DIF: Easy TOP: The effects of a tariff

ANS: F PTS: 1 DIF: Moderate TOP: The effects of a tariff

ANS: F PTS: 1 DIF: Easy TOP: The effects of a tariff

ANS: F PTS: 1 DIF: Moderate TOP: The effects of a tariff

ANS: T PTS: 1 DIF: Moderate TOP: The effects of a tariff

ANS: T PTS: 1 DIF: Easy TOP: The effects of a tariff

ANS: T PTS: 1 DIF: Easy TOP: The effects of an import

ANS: T PTS: 1 DIF: Easy TOP: The effects of an import

ANS: T PTS: 1 DIF: Moderate TOP: The effects of an import

ANS: F PTS: 1 DIF: Moderate TOP: The effects of an import

ANS: T PTS: 1 DIF: Moderate TOP: The effects of an import

ANS: T PTS: 1 DIF: Easy TOP: The jobs argument

ANS: T PTS: 1 DIF: Easy TOP: FYI: Other benefits of

ANS: T PTS: 1 DIF: Moderate TOP: The jobs argument

ANS: F PTS: 1 DIF: Moderate TOP: The jobs argument

27. Australia should always be a net exporter of wheat.

ANS: F PTS: 1 DIF: Moderate TOP: The national security

ANS: F PTS: 1 DIF: Easy TOP: The infant industry

ANS: T PTS: 1 DIF: Easy TOP: The infant industry

ANS: T PTS: 1 DIF: Easy TOP: The infant industry

ANS: F PTS: 1 DIF: Moderate TOP: The arguments for

ANS: T PTS: 1 DIF: Moderate TOP: Case study: Trade

ANS: T PTS: 1 DIF: Moderate TOP: The winners and losers

ANS: B PTS: 1 DIF: Easy TOP: The determinants of

2. Indonesia and Australia engage in international trade because:

ANS: C PTS: 1 DIF: Moderate TOP: The winners and losers

ANS: D PTS: 1 DIF: Moderate TOP: The gains and losses of

ANS: C PTS: 1 DIF: Easy TOP: The winners and losers

5. If a country allows trade and the price of a good falls as a result:

ANS: A PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: A PTS: 1 DIF: Easy TOP: The gains and losses of

7. A country is deemed to have a comparative advantage in a product if:

ANS: B PTS: 1 DIF: Easy TOP: The gains and losses of

8. The world price is:

ANS: A PTS: 1 DIF: Easy TOP: The world price and

ANS: B PTS: 1 DIF: Easy TOP: The effects of an import

10. When a quota is imposed on a market, the:

ANS: A PTS: 1 DIF: Moderate TOP: The effects of an import

11. A tariff and an import quota will both:

ANS: C PTS: 1 DIF: Moderate TOP: The effects of an import

ANS: B PTS: 1 DIF: Easy TOP: Figure 9.5: How free

ANS: B PTS: 1 DIF: Easy TOP: Figure 9.5: How free

14. When a country allows trade and becomes an exporter of a good:

ANS: B PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: C PTS: 1 DIF: Easy TOP: The gains and losses of

ANS: D PTS: 1 DIF: Moderate TOP: The gains and losses of

17. When a country allows free trade:

ANS: C PTS: 1 DIF: Easy TOP: The gains and losses of