Question 1

An example of a nontariff trade barrier would be

Accepted Answer

A)  a tax on an imported product. 
B)  a tax on an exported product. 
C)  a minimum restriction on the quantity of imports. 
D)  a subsidy granted to import-competing producers. 
A)  a tax on an imported product. 
B)  a tax on an exported product. 
C)  a minimum restriction on the quantity of imports. 
D)  a subsidy granted to import-competing producers.

Question 2

Similar to import tariffs, quotas on imports result in

Accepted Answer

A)  higher levels of consumer surplus. 
B)  lower levels of producer surplus. 
C)  higher prices for domestic consumers. 
D)  higher prices for foreign consumers. 
A)  higher levels of consumer surplus. 
B)  lower levels of producer surplus. 
C)  higher prices for domestic consumers. 
D)  higher prices for foreign consumers.

Question 3

The U.S.-Japanese agreement in 1981 to limit imports of small Japanese cars to the U.S.

Accepted Answer

A)  affected Japanese automakers uniformly. 
B)  resulted in losses to the Japanese auto industry. 
C)  cost the U.S. consumer an extra $660 or so per Japanese import purchased. 
D)  did not save any U.S. jobs. 
A)  affected Japanese automakers uniformly. 
B)  resulted in losses to the Japanese auto industry. 
C)  cost the U.S. consumer an extra $660 or so per Japanese import purchased. 
D)  did not save any U.S. jobs.

Question 4

Predatory dumping would occur if Toyota Inc.of Japan sells autos to U.S.consumers at lower prices than to Japanese consumers in order to put Chrysler Inc.out of business.

Accepted Answer

A) True 
 B)False

Question 5

In the post-World War II era, nontariff trade barriers have decreased in importance relative to tariff barriers.

Accepted Answer

A) True 
 B)False

Question 6

If the Japanese demand for computers is elastic and the Canadian demand for computers is inelastic, a profit-maximizing firm would charge a higher price to Canadian buyers than to Japanese buyers.

Accepted Answer

A) True 
 B)False

Question 7

The following are quotes received by U.S.government for a particular work.Which is the most likely quote to get selected based on the government procurement policies?

Accepted Answer

A)  domestic supplier 1 - $112 per unit 
B)  Chinese supplier - $106 per unit 
C)  domestic supplier 2 - $115 
D)  French supplier - $110 
A)  domestic supplier 1 - $112 per unit 
B)  Chinese supplier - $106 per unit 
C)  domestic supplier 2 - $115 
D)  French supplier - $110

Question 8

If the Australian government imposes a domestic content requirement of 75 percent on autos, at least 25 percent of an auto's value must be produced in a foreign country if that auto is to be sold in Australia.

Accepted Answer

A) True 
 B)False

Question 9

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.With free trade, Mexico's consumer surplus and producer surplus respectively equal

Accepted Answer

A)  $2000 and $1200. 
B)  $3200 and $200. 
C)  $3600 and $800. 
D)  $4000 and $600. 
A)  $2000 and $1200. 
B)  $3200 and $200. 
C)  $3600 and $800. 
D)  $4000 and $600.

Question 10

Local content laws stipulate the maximum percentage of a product's total value that must be produced domestically for that product to be sold domestically.

Accepted Answer

A) True 
 B)False

Question 11

Is a tariff-rate quota a two-tier tariff? Why?

Accepted Answer

Yes. It allows a specified num

Question 12

Figure 5.4. Venezuelan Calculator Market  
-Consider Figure 5.4.The production subsidy results in an overall welfare loss for Venezuela totaling

Accepted Answer

A)  $8. 
B)  $12. 
C)  $16. 
D)  $20. 
A)  $8. 
B)  $12. 
C)  $16. 
D)  $20.

Question 13

Figure 5.5. Mexico's Television Market  
-Consider Figure 5.5.With free trade, Mexicans produce 4 TVs, consume 24 TVs, and import 20 TVs.

Accepted Answer

A) True 
 B)False

Question 14

Subsidies to domestic firms may lead to

Accepted Answer

A)  an increase in prices. 
B)  higher volume of exports. 
C)  higher volume of imports. 
D)  increase in welfare of the trading partner. 
A)  an increase in prices. 
B)  higher volume of exports. 
C)  higher volume of imports. 
D)  increase in welfare of the trading partner.

Question 15

Figure 5.5. Mexico's Television Market  
-Consider Figure 5.5.The Japanese export quota's revenue effect totals $1,200.

Accepted Answer

A) True 
 B)False

Question 16

An import quota tends to reduce the overall welfare of the importing nation by an amount equal to the protective effect, consumption effect, and the portion of the revenue effect that is captured by the domestic government.

Accepted Answer

A) True 
 B)False

Question 17

The U.S.government, through explicit laws, openly discriminates against __________ in its purchasing decisions.

Accepted Answer

A)  government agencies 
B)  domestic suppliers 
C)  foreign suppliers 
D)  private agencies 
A)  government agencies 
B)  domestic suppliers 
C)  foreign suppliers 
D)  private agencies

Question 18

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 rest of the world voluntarily agrees to reduce steel shipments to Mexico vis-a-vis an export quota equal to 2 tons.Assuming Mexican importers behave as competitive buyers while foreign exporters behave as monopoly sellers, the overall welfare loss of the quota to Mexico is

Accepted Answer

A)  $200. 
B)  $400. 
C)  $600. 
D)  $800. 
A)  $200. 
B)  $400. 
C)  $600. 
D)  $800.

Question 19

If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then

Accepted Answer

A)  the quota results in efficiency reductions but the tariff does not. 
B)  the tariff results in efficiency reductions but the quota does not. 
C)  they have different impacts on how much is produced and consumed. 
D)  they have different impacts on how income is distributed. 
A)  the quota results in efficiency reductions but the tariff does not. 
B)  the tariff results in efficiency reductions but the quota does not. 
C)  they have different impacts on how much is produced and consumed. 
D)  they have different impacts on how income is distributed.

Question 20

Concerning the restrictive impact of an import quota, assume there occurs an increase in the domestic demand for the import product.As long as the quota falls short of what would be imported under free market conditions, the economy's adjustment to the increase in demand would take the form of

Accepted Answer

A)  a decrease in domestic production of the import good. 
B)  an increase in the amount of the good being imported. 
C)  an increase in the domestic price of the import good. 
D)  a decrease in domestic consumption of the import good. 
A)  a decrease in domestic production of the import good. 
B)  an increase in the amount of the good being imported. 
C)  an increase in the domestic price of the import good. 
D)  a decrease in domestic consumption of the import good.

An example of a nontariff trade barrier would be

Similar to import tariffs, quotas on imports result in

The U.S.-Japanese agreement in 1981 to limit imports of small Japanese cars to the U.S.

Predatory dumping would occur if Toyota Inc.of Japan sells autos to U.S.consumers at lower prices than to Japanese consumers in order to put Chrysler Inc.out of business.

In the post-World War II era, nontariff trade barriers have decreased in importance relative to tariff barriers.

If the Japanese demand for computers is elastic and the Canadian demand for computers is inelastic, a profit-maximizing firm would charge a higher price to Canadian buyers than to Japanese buyers.

The following are quotes received by U.S.government for a particular work.Which is the most likely quote to get selected based on the government procurement policies?

If the Australian government imposes a domestic content requirement of 75 percent on autos, at least 25 percent of an auto's value must be produced in a foreign country if that auto is to be sold in Australia.

Local content laws stipulate the maximum percentage of a product's total value that must be produced domestically for that product to be sold domestically.

Is a tariff-rate quota a two-tier tariff? Why?

Figure 5.4. Venezuelan Calculator Market -Consider Figure 5.4.The production subsidy results in an overall welfare loss for Venezuela totaling

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.With free trade, Mexicans produce 4 TVs, consume 24 TVs, and import 20 TVs.

Subsidies to domestic firms may lead to

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.The Japanese export quota's revenue effect totals $1,200.

An import quota tends to reduce the overall welfare of the importing nation by an amount equal to the protective effect, consumption effect, and the portion of the revenue effect that is captured by the domestic government.

The U.S.government, through explicit laws, openly discriminates against __________ in its purchasing decisions.

If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then

Concerning the restrictive impact of an import quota, assume there occurs an increase in the domestic demand for the import product.As long as the quota falls short of what would be imported under free market conditions, the economy's adjustment to the increase in demand would take the form of

The International Economy and Globalization

Foundations of Modern Trade Theory Comparative Advantage

Sources of Comparative Advantage

Tariffs

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance of Payments

Exchange Rate Systems and Currency Crises

Filters

Exam 5: Nontariff Trade Barriers

An example of a nontariff trade barrier would be

Similar to import tariffs, quotas on imports result in

The U.S.-Japanese agreement in 1981 to limit imports of small Japanese cars to the U.S.

Predatory dumping would occur if Toyota Inc.of Japan sells autos to U.S.consumers at lower prices than to Japanese consumers in order to put Chrysler Inc.out of business.

In the post-World War II era, nontariff trade barriers have decreased in importance relative to tariff barriers.

If the Japanese demand for computers is elastic and the Canadian demand for computers is inelastic, a profit-maximizing firm would charge a higher price to Canadian buyers than to Japanese buyers.

The following are quotes received by U.S.government for a particular work.Which is the most likely quote to get selected based on the government procurement policies?

If the Australian government imposes a domestic content requirement of 75 percent on autos, at least 25 percent of an auto's value must be produced in a foreign country if that auto is to be sold in Australia.

Local content laws stipulate the maximum percentage of a product's total value that must be produced domestically for that product to be sold domestically.

Is a tariff-rate quota a two-tier tariff? Why?

Figure 5.4. Venezuelan Calculator Market -Consider Figure 5.4.The production subsidy results in an overall welfare loss for Venezuela totaling

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.With free trade, Mexicans produce 4 TVs, consume 24 TVs, and import 20 TVs.

Subsidies to domestic firms may lead to

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.The Japanese export quota's revenue effect totals $1,200.

An import quota tends to reduce the overall welfare of the importing nation by an amount equal to the protective effect, consumption effect, and the portion of the revenue effect that is captured by the domestic government.

The U.S.government, through explicit laws, openly discriminates against __________ in its purchasing decisions.

If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then

Concerning the restrictive impact of an import quota, assume there occurs an increase in the domestic demand for the import product.As long as the quota falls short of what would be imported under free market conditions, the economy's adjustment to the increase in demand would take the form of

The International Economy and Globalization

Foundations of Modern Trade Theory Comparative Advantage

Sources of Comparative Advantage

Tariffs

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance of Payments

Exchange Rate Systems and Currency Crises

Filters