Exam 5: Nontariff Trade Barriers

Figure 5.2. International Dumping -Consider Figure 5.2.In the absence of international dumping, ABC Inc.maximizes profits by selling ____ calculators at a price of $____; the firm realizes profits totaling $____.

Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.Suppose the rest of the world can supply apples to Sweden at a price of $0.60 per pound.With free trade, Sweden produces ____ pounds of apples and imports ____ pounds of apples.

If the home country's government grants a subsidy on a domestically produced good, domestic producers tend to

A firm that faces problems of falling sales and excess productive capacity might resort to international dumping if it

A removal of an import quota tends to result in

Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.Assume that Swedish import companies behave as competitive buyers while foreign export companies behave as monopoly sellers.Compared to free trade, Sweden's import quota results in domestic welfare

In the long run, increased import quotas by Mexico's government would tend to

Figure 5.2. International Dumping -Consider Figure 5.2.Compared with the total revenue and total profit that ABC Inc.realizes in the absence of dumping, with dumping the firm attains a

Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.At the free-trade price of $0.60 per pound, Sweden's consumer surplus totals ____ and producer surplus totals ____.

Antidumping duties result in an increase in consumer surplus.

Concerning international dumping, many economists argue that "fair value" should be based on

Figure 5.2. International Dumping -Consider Figure 5.2.ABC Inc.sells 27 calculators at a price of $5 each, realizing profits totaling $54.Of this quantity, ABC Inc.sells ____ calculators in Canada and realizes revenues totaling $____; the firm sells ____ calculators in France and realizes revenues totaling $____.

Which is NOT a material injury caused by LTFV?

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)}.As a result of the subsidy Mexican steel producers gain ____ of producer surplus.

A domestic content requirement placed on automobiles would tend to result in

Compared to an import quota, an equivalent tariff may provide a less certain amount of protection for home producers since

Local content laws are consistent with the principle of import substitution, in which domestic production replaces the importation of goods from abroad.

If Canada was to levy a quota on chocolate imported from Denmark

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 -Referring to Figure 5.1, suppose the Mexican government imposes an import quota equal to 2 tons of steel.If the Mexican government auctions import licenses to the highest foreign bidder, the overall welfare loss of the quota to Mexico equals

An elimination of nontariff barriers on apples tends to increase apple imports, reduce profits of import-competing apple producers, and generate job losses for domestic apple workers.