Question 1

When a government allows raw materials and other intermediate products to enter a country duty free,this generally results in a(an)

Accepted Answer

A) fall in both nominal and effective tariff rates. 
B) rise in only the effective tariff rate. 
C) rise in both nominal and effective tariff rates. 
D) nominal tariff rate less than the effective tariff rate. 
E) effective tariff rate less than the nominal tariff rate. 
A) fall in both nominal and effective tariff rates. 
B) rise in only the effective tariff rate. 
C) rise in both nominal and effective tariff rates. 
D) nominal tariff rate less than the effective tariff rate. 
E) effective tariff rate less than the nominal tariff rate. D

Question 2

An export subsidy 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 B

Question 3

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

Question 4

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

Accepted Answer

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

Question 5

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

Accepted Answer

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

Question 6

The deadweight loss of a tariff

Accepted Answer

A) is not a social loss because it aids domestic consumers. 
B) is not a social loss because it merely redistributes revenue from one sector to another. 
C) is a social loss because it reduces the revenue of the government. 
D) is a social loss because it promotes inefficient use of national resources. 
E) is not a social loss because it is paid for by rich corporations. 
A) is not a social loss because it aids domestic consumers. 
B) is not a social loss because it merely redistributes revenue from one sector to another. 
C) is a social loss because it reduces the revenue of the government. 
D) is a social loss because it promotes inefficient use of national resources. 
E) is not a social loss because it is paid for by rich corporations.

Question 7

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

Question 8

Tariffs are NOT defended on the grounds that they

Accepted Answer

A) protect domestic producers from foreign low prices. 
B) promote growth and development of young industries. 
C) improve the terms of trade of foreign nations. 
D) protect jobs and reduce unemployment. 
E) prevent over- dependence of a country on only a few industries. 
A) protect domestic producers from foreign low prices. 
B) promote growth and development of young industries. 
C) improve the terms of trade of foreign nations. 
D) protect jobs and reduce unemployment. 
E) prevent over- dependence of a country on only a few industries.

Question 9

If an import- competing firm is the only domestic producer of a good,then a transition from autarky to free trade will domestic price,producer surplus,consumer surplus,and _ overall domestic national welfare.

Accepted Answer

A) increase; increase; increase; increase 
B) increase; increase; decrease; increase 
C) decrease; decrease; decrease; decrease 
D) decrease; decrease; increase; increase 
E) increase; increase; decrease; decrease 
A) increase; increase; increase; increase 
B) increase; increase; decrease; increase 
C) decrease; decrease; decrease; decrease 
D) decrease; decrease; increase; increase 
E) increase; increase; decrease; decrease

Question 10

Should the home country be "large" relative to its trade partners,its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

Accepted Answer

A) consumption effect plus redistribution effect. 
B) revenue effect plus redistribution effect. 
C) protective effect plus revenue effect. 
D) terms of trade gain. 
E) production distortion effect plus consumption distortion effect. 
A) consumption effect plus redistribution effect. 
B) revenue effect plus redistribution effect. 
C) protective effect plus revenue effect. 
D) terms of trade gain. 
E) production distortion effect plus consumption distortion effect.

Question 11

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

Question 12

The change in the economic welfare of a country associated with an increase in a tariff equals

Accepted Answer

A) efficiency loss + tax revenue gain. 
B) efficiency gain - terms of trade loss. 
C) efficiency loss - tax revenue gain. 
D) efficiency loss - terms of trade gain. 
E) efficiency loss + tax revenue gain + terms of trade gain. 
A) efficiency loss + tax revenue gain. 
B) efficiency gain - terms of trade loss. 
C) efficiency loss - tax revenue gain. 
D) efficiency loss - terms of trade gain. 
E) efficiency loss + tax revenue gain + terms of trade gain.

Question 13

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

Question 14

If a good is imported into (large)country H from country F,then the imposition of a tariff in country H

Accepted Answer

A) lowers the price of the good in H and could raise it in F. 
B) raises the price of the good in H and lowers it in F. 
C) raises the price in country H and cannot affect its price in country F. 
D) raises the price of the good in both countries (the "Law of One Price"). 
E) lowers the price of the good in both countries. 
A) lowers the price of the good in H and could raise it in F. 
B) raises the price of the good in H and lowers it in F. 
C) raises the price in country H and cannot affect its price in country F. 
D) raises the price of the good in both countries (the "Law of One Price"). 
E) lowers the price of the good in both countries.

Question 15

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

Accepted Answer

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

Question 16

The principle benefit of tariff protection goes to

Accepted Answer

A) the domestic government. 
B) foreign consumers of the good produced. 
C) domestic consumers of the good produced. 
D) foreign producers of the good produced. 
E) domestic producers of the good produced. 
A) the domestic government. 
B) foreign consumers of the good produced. 
C) domestic consumers of the good produced. 
D) foreign producers of the good produced. 
E) domestic producers of the good produced.

Question 17

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

Accepted Answer

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

Question 18

An export tariff 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

Question 19

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

Accepted Answer

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

Question 20

Suppose the United States eliminates its tariff on ball bearings used in producing exports.Ball bearing prices in the United States would be expected to

Accepted Answer

A) decrease,and the foreign demand for U.S.exports would increase. 
B) increase,and the foreign demand for U.S.exports would increase. 
C) decrease,and the foreign demand for U.S.exports would decrease. 
D) increase,and the foreign demand for U.S.exports would decrease. 
E) decrease,and the foreign demand would be unchanged. 
A) decrease,and the foreign demand for U.S.exports would increase. 
B) increase,and the foreign demand for U.S.exports would increase. 
C) decrease,and the foreign demand for U.S.exports would decrease. 
D) increase,and the foreign demand for U.S.exports would decrease. 
E) decrease,and the foreign demand would be unchanged.

When a government allows raw materials and other intermediate products to enter a country duty free,this generally results in a(an)

An export subsidy will producer surplus,consumer surplus, government revenue,and overall domestic national welfare.

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

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

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

The deadweight loss of a tariff

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

Tariffs are NOT defended on the grounds that they

If an import- competing firm is the only domestic producer of a good,then a transition from autarky to free trade will domestic price,producer surplus,consumer surplus,and _ overall domestic national welfare.

Should the home country be "large" relative to its trade partners,its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

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

The change in the economic welfare of a country associated with an increase in a tariff equals

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

If a good is imported into (large)country H from country F,then the imposition of a tariff in country H

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

The principle benefit of tariff protection goes to

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

An export tariff will _ producer surplus,consumer surplus,government revenue,and overall domestic national welfare.

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

Suppose the United States eliminates its tariff on ball bearings used in producing exports.Ball bearing prices in the United States would be expected to

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

Filters

Exam 9: The Instruments of Trade Policy

When a government allows raw materials and other intermediate products to enter a country duty free,this generally results in a(an)

An export subsidy will producer surplus,consumer surplus, government revenue,and overall domestic national welfare.

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

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

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

The deadweight loss of a tariff

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

Tariffs are NOT defended on the grounds that they

If an import- competing firm is the only domestic producer of a good,then a transition from autarky to free trade will domestic price,producer surplus,consumer surplus,and _ overall domestic national welfare.

Should the home country be "large" relative to its trade partners,its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

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

The change in the economic welfare of a country associated with an increase in a tariff equals

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

If a good is imported into (large)country H from country F,then the imposition of a tariff in country H

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

The principle benefit of tariff protection goes to

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

An export tariff will _ producer surplus,consumer surplus,government revenue,and overall domestic national welfare.

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

Suppose the United States eliminates its tariff on ball bearings used in producing exports.Ball bearing prices in the United States would be expected to

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

Filters