Question 1

Tariff rates on products imported into the U.S.

Accepted Answer

A)  have dropped substantially over the past 50 years. 
B)  were prohibited by the Constitution. 
C)  reached an all time high in 2002. 
D)  have risen steadily since 1920. 
E)  were the government's main source of income in 2006. 
A)  have dropped substantially over the past 50 years. 
B)  were prohibited by the Constitution. 
C)  reached an all time high in 2002. 
D)  have risen steadily since 1920. 
E)  were the government's main source of income in 2006. A

Question 2

A specific tariff provides home producers more protection when

Accepted Answer

A)  the home market buys cheaper products rather than expensive products. 
B)  it is applied to a commodity with many grade variations. 
C)  the home demand for a good is elastic with respect to price changes. 
D)  it is levied on manufactured goods rather than primary products. 
E)  the home supply outnumbers the foreign imports. 
A)  the home market buys cheaper products rather than expensive products. 
B)  it is applied to a commodity with many grade variations. 
C)  the home demand for a good is elastic with respect to price changes. 
D)  it is levied on manufactured goods rather than primary products. 
E)  the home supply outnumbers the foreign imports. A

Question 3

The imposition of tariffs will help a nation attain which of the following goals?

Accepted Answer

A)  decreased domestic consumer prices 
B)  increased domestic employment 
C)  increased amount and variety of goods available for consumers 
D)  increased competition between domestic and foreign producers 
E)  gains for domestic producers 
A)  decreased domestic consumer prices 
B)  increased domestic employment 
C)  increased amount and variety of goods available for consumers 
D)  increased competition between domestic and foreign producers 
E)  gains for domestic producers E

Question 4

Which of the following is a fixed percentage of the value of an imported product?

Accepted Answer

A)  specific tariff 
B)  ad valorem tariff 
C)  nominal tariff 
D)  effective protection tariff 
E)  infant industry tariff 
A)  specific tariff 
B)  ad valorem tariff 
C)  nominal tariff 
D)  effective protection tariff 
E)  infant industry tariff

Question 5

-Refer to above figure. With a specific tariff of $3 per unit, what is the quantity of Widgets produced domestically?

Accepted Answer

The answer of  
-Refer to above figure. With a...

Question 6

-Refer to above figure. With free trade and no tariffs, what is the quantity of Widgets produced domestically?

Accepted Answer

The answer of  
-Refer to above figure. With free...

Question 7

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

Accepted Answer

A general tariff on all imports is equiv

Question 8

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

Accepted Answer

A)  helps developing countries export manufactured products. 
B)  has no effect on developing country exports. 
C)  hurts developing country efforts to export manufactured goods. 
D)  hurts developing country efforts to export raw materials. 
E)  does not affect industrialized countries' exports. 
A)  helps developing countries export manufactured products. 
B)  has no effect on developing country exports. 
C)  hurts developing country efforts to export manufactured goods. 
D)  hurts developing country efforts to export raw materials. 
E)  does not affect industrialized countries' exports.

Question 9

An export subsidy differs from a tariff in each of the following ways EXCEPT

Accepted Answer

A)  a tariff generates revenue. 
B)  a tariff is applied to imports. 
C)  a tariff results in an efficiency loss. 
D)  a tariff is a tax. 
E)  a tariff discourages imports. 
A)  a tariff generates revenue. 
B)  a tariff is applied to imports. 
C)  a tariff results in an efficiency loss. 
D)  a tariff is a tax. 
E)  a tariff discourages imports.

Question 10

The tariff levied in a "large country" (Home), lowers the world price of the imported good. This causes

Accepted Answer

A)  foreign consumers to demand less of the good on which was levied a tariff. 
B)  domestic demand for imports to decrease. 
C)  domestic demand for imports to increase. 
D)  foreign suppliers to produce less of the good on which was levied a tariff. 
E)  no change in the foreign price of the good it imports. 
A)  foreign consumers to demand less of the good on which was levied a tariff. 
B)  domestic demand for imports to decrease. 
C)  domestic demand for imports to increase. 
D)  foreign suppliers to produce less of the good on which was levied a tariff. 
E)  no change in the foreign price of the good it imports.

Question 11

The imposition of tariffs on imports results in deadweight (triangle) losses. These are

Accepted Answer

A)  production and consumption distortion effects. 
B)  redistribution effects. 
C)  revenue effects 
D)  efficiency effects. 
E)  distortion of incentives. 
A)  production and consumption distortion effects. 
B)  redistribution effects. 
C)  revenue effects 
D)  efficiency effects. 
E)  distortion of incentives.

Question 12

-Refer to above figure. With free trade and no tariffs, what is the quantity of Widgets consumed domestically?

Accepted Answer

The answer of  
-Refer to above figure. With free...

Question 13

The effective rate of protection measures

Accepted Answer

A)  the "true" ad valorem value of a tariff. 
B)  the quota equivalent value of a tariff. 
C)  the efficiency with which the tariff is collected at the customhouse. 
D)  the protection given by the tariff to domestic value added. 
E)  the difference between domestic and foreign prices of the import. 
A)  the "true" ad valorem value of a tariff. 
B)  the quota equivalent value of a tariff. 
C)  the efficiency with which the tariff is collected at the customhouse. 
D)  the protection given by the tariff to domestic value added. 
E)  the difference between domestic and foreign prices of the import.

Question 14

If the tariff on computers is not changed, but the government then adds hitherto nonexistent tariffs on imported semiconductor components, then the effective rate of protection in the computer industry will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  depend on whether computers are PCs or "Supercomputers." 
E)  no longer apply. 
A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  depend on whether computers are PCs or "Supercomputers." 
E)  no longer apply.

Question 15

The most vocal political pressure for tariffs is generally made by

Accepted Answer

A)  consumers lobbying for export tariffs. 
B)  consumers lobbying for import tariffs. 
C)  consumers lobbying for lower import tariffs. 
D)  producers lobbying for export tariffs. 
E)  producers lobbying for import tariffs. 
A)  consumers lobbying for export tariffs. 
B)  consumers lobbying for import tariffs. 
C)  consumers lobbying for lower import tariffs. 
D)  producers lobbying for export tariffs. 
E)  producers lobbying for import tariffs.

Question 16

As globalization tends to increase the proportion of imported inputs relative to domestically supplied components

Accepted Answer

A)  the nominal tariff automatically increases. 
B)  the rate of (effective) protection automatically decreases. 
C)  the nominal tariff automatically decreases. 
D)  the rate of (effective) protection automatically increases. 
E)  the amount of tariffs levied increases. 
A)  the nominal tariff automatically increases. 
B)  the rate of (effective) protection automatically decreases. 
C)  the nominal tariff automatically decreases. 
D)  the rate of (effective) protection automatically increases. 
E)  the amount of tariffs levied increases.

Question 17

The European Union's Common Agricultural Policy (CAP) is, in effect

Accepted Answer

A)  a tariff imposed on agricultural exports. 
B)  a tariff imposed on agricultural imports. 
C)  a subsidy that reduces the cost of agricultural exports. 
D)  a subsidy that increases the cost of agricultural exports. 
E)  a quota that limits production of agricultural goods by EU nations. 
A)  a tariff imposed on agricultural exports. 
B)  a tariff imposed on agricultural imports. 
C)  a subsidy that reduces the cost of agricultural exports. 
D)  a subsidy that increases the cost of agricultural exports. 
E)  a quota that limits production of agricultural goods by EU nations.

Question 18

-Refer to above figure. With a specific tariff of $3 per unit, what is the quantity of Widgets consumed domestically?

Accepted Answer

The answer of  
-Refer to above figure. With a...

Question 19

An import quota is similar to a ________ in its effect on imports, EXCEPT that an import quota ________.

Accepted Answer

A)  tariff; does not generate revenue 
B)  tariff; generates revenue 
C)  subsidy; does not generate revenue 
D)  subsidy; generates revenue 
E)  tariff; does not result in an efficiency loss. 
A)  tariff; does not generate revenue 
B)  tariff; generates revenue 
C)  subsidy; does not generate revenue 
D)  subsidy; generates revenue 
E)  tariff; does not result in an efficiency loss.

Question 20

An import quota will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Accepted Answer

A)  increase; decrease; increase; have an ambiguous effect on 
B)  increase; decrease; decrease; decrease 
C)  increase; decrease; have no effect on; have an ambiguous effect on 
D)  increase; decrease; have no effect on; decrease 
E)  increase; increase; decrease; have an ambiguous effect on 
A)  increase; decrease; increase; have an ambiguous effect on 
B)  increase; decrease; decrease; decrease 
C)  increase; decrease; have no effect on; have an ambiguous effect on 
D)  increase; decrease; have no effect on; decrease 
E)  increase; increase; decrease; have an ambiguous effect on

Exam 9: The Instruments of Trade Policy

Tariff rates on products imported into the U.S.

A specific tariff provides home producers more protection when

The imposition of tariffs will help a nation attain which of the following goals?

Which of the following is a fixed percentage of the value of an imported product?

-Refer to above figure. With a specific tariff of $3 per unit, what is the quantity of Widgets produced domestically?

-Refer to above figure. With free trade and no tariffs, what is the quantity of Widgets produced domestically?

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

An export subsidy differs from a tariff in each of the following ways EXCEPT

The tariff levied in a "large country" (Home), lowers the world price of the imported good. This causes

The imposition of tariffs on imports results in deadweight (triangle) losses. These are

-Refer to above figure. With free trade and no tariffs, what is the quantity of Widgets consumed domestically?

The effective rate of protection measures

If the tariff on computers is not changed, but the government then adds hitherto nonexistent tariffs on imported semiconductor components, then the effective rate of protection in the computer industry will

The most vocal political pressure for tariffs is generally made by

As globalization tends to increase the proportion of imported inputs relative to domestically supplied components

The European Union's Common Agricultural Policy (CAP) is, in effect

-Refer to above figure. With a specific tariff of $3 per unit, what is the quantity of Widgets consumed domestically?

An import quota is similar to a ________ in its effect on imports, EXCEPT that an import quota ________.

An import quota will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

An import quota is similar to a in its effect on imports, EXCEPT that an import quota .

An import quota will producer surplus, consumer surplus, government revenue, and overall domestic national welfare.