Exam 5: Nontariff Trade Barriers

Import quotas will increase the price consumers pay for imported goods and

If import licenses are auctioned off to domestic importers in a competitive market, their scarcity value (revenue effect) accrues to

Today most industrial countries protect their industries via global import quotas rather than selective import quotas.

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.With free trade, Mexican producer surplus equals $2,450 and Mexican consumer surplus equals $200.

A subsidy granted to import-competing producers is intended to lead to increased domestic production and decreased imports for the home country.

According to the cost-based definition of dumping, dumping begins to occur when a firm sells a product at a price that is less than average variable cost.

Voluntary export restraint agreements typically apply to all of the world's exporting nations rather than only the most important exporting nations.

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection. Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country -Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers, as indicated by the supply schedule S_{M (with subsidy)}.The quantity of imports equals

__________________ are large buyers of goods and services.

With a tariff on auto imports, increased domestic demand leads to a fall in the number of autos imported and a rise in the number of autos produced domestically.

Antidumping law has been called unfair for all of the following reasons EXCEPT

Assume that the Commerce Department makes a preliminary investigation on imports of furniture by a company and finds evidence of dumping and collects an estimated dumping margin on all imports of that product.On further investigation it is determined that dumping has NOT happened.Then, the special tariff collected is

A subsidy granted to import-competing producers is often preferred to an import tariff on the grounds that it results in a smaller deadweight welfare loss and allows consumption to remain unchanged.

Which is true about an elimination of nontariff barriers on import of furniture?

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.Compared to free trade, the Japanese export quota leads to an increase in Mexican consumer surplus of $3,150.

The distribution of an import quota's revenue effect depends on the relative concentration of bargaining power between foreign exporters and domestic importers.

Tariffs and quotas on imports tend to involve larger sacrifices in national welfare than would occur under domestic subsidies.This is because, unlike domestic subsidies, import tariffs and quotas

The United Auto Workers union attempted to win the approval of legislation that would moderate the practice of foreign sourcing on the part of American auto manufacturers.Which of the following best represents this legislation?

Figure 5.6 Domestice Supply and demand for Wine - U.S. -Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.If the U.S.imposes a quota of 15 bottles of wine what will happen to consumer surplus?

In the early 1980s, the Japanese government limited shipments of Japanese automobiles to the United States.This limitation was known as