Question 1

Which is NOT true about the practices in Japanese ports?

Accepted Answer

A)  Port services were controlled by stevedore company association. 
B)  Foreign carriers had to negotiate with stevedore company association. 
C)  Japanese government disapproved restrictive practices. 
D)  Japanese government denied license to new entrants in port services. 
A)  Port services were controlled by stevedore company association. 
B)  Foreign carriers had to negotiate with stevedore company association. 
C)  Japanese government disapproved restrictive practices. 
D)  Japanese government denied license to new entrants in port services.

Question 2

Throughout the world, governments auction quota licenses

Accepted Answer

A)  never. 
B)  always. 
C)  often. 
D)  seldom. 
A)  never. 
B)  always. 
C)  often. 
D)  seldom.

Question 3

When increases in nonrestraint supply offset part of the cutback in shipments that occur under an export quota, the overall inefficiency loss for the importing country is less than that which would have occurred in the absence of nonrestrained exports.

Accepted Answer

A) True 
 B)False

Question 4

A producer successfully practicing international dumping would charge

Accepted Answer

A)  a relatively higher price in the more inelastic market. 
B)  a relatively higher price in the more elastic market. 
C)  the same price in all markets, regardless of their elasticities. 
D)  different prices in all markets, regardless of their elasticities. 
A)  a relatively higher price in the more inelastic market. 
B)  a relatively higher price in the more elastic market. 
C)  the same price in all markets, regardless of their elasticities. 
D)  different prices in all markets, regardless of their elasticities.

Question 5

Figure 5.3. Sweden's Apple Market  
-Consider Figure 5.3.The quota leads to a deadweight welfare loss for Sweden of an amount equaling

Accepted Answer

A)  $0.80. 
B)  $1.60. 
C)  $2.40. 
D)  $3.20. 
A)  $0.80. 
B)  $1.60. 
C)  $2.40. 
D)  $3.20.

Question 6

Domestic content legislation applied to autos would tend to

Accepted Answer

A)  support wage levels of American autoworkers. 
B)  lower auto prices for American autoworkers. 
C)  encourage American automakers to locate production overseas. 
D)  increase profits of American auto companies. 
A)  support wage levels of American autoworkers. 
B)  lower auto prices for American autoworkers. 
C)  encourage American automakers to locate production overseas. 
D)  increase profits of American auto companies.

Question 7

Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country's

Accepted Answer

A)  export revenues will decrease. 
B)  export revenues will rise. 
C)  terms of trade will worsen. 
D)  terms of trade will improve. 
A)  export revenues will decrease. 
B)  export revenues will rise. 
C)  terms of trade will worsen. 
D)  terms of trade will improve.

Question 8

Sporadic (distress) dumping would occur if domestic orange producers dispose of an excess quantity of oranges, resulting from an abnormally large harvest, by selling them at lower prices abroad than at home.

Accepted Answer

A) True 
 B)False

Question 9

In 2011 Whirlpool Inc.won an antidumping/subsidy case against clothes-washer imports from Samsung and LG.This resulted in antidumping/subsidy duties being imposed on imports of clothes washers from these foreign producers.

Accepted Answer

A) True 
 B)False

Question 10

A firm would increase profits from dumping if it charged a lower price at home, where demand is inelastic, and a higher price abroad, where demand is elastic.

Accepted Answer

A) True 
 B)False

Question 11

For a tariff-rate quota, the within-quota tariff rate is more than the over-quota tariff rate.

Accepted Answer

A) True 
 B)False

Question 12

Assume that the manufacturing cost of a company is $50,0000 and the general expenses is $50,000.Then, the amount of profit must be equal to at least _____ for the cost-based definition criterion of foreign market value to be met.

Accepted Answer

A)  $44,000 
B)  $6,500 
C)  $56,000 
D)  $49,000 
A)  $44,000 
B)  $6,500 
C)  $56,000 
D)  $49,000

Question 13

An effective Buy American law would tend to increase U.S.producer surplus at the expense of U.S.consumer surplus.

Accepted Answer

A) True 
 B)False

Question 14

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 foreign exporters behave as monopoly sellers, and Mexican importers behave as competitive buyers, the overall welfare loss of the quota to Mexico equals

Accepted Answer

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

Question 15

Figure 5.5. Mexico's Television Market  
-Consider Figure 5.5.The deadweight welfare loss to Mexico, as a result of the Japanese export quota, totals $1,200.

Accepted Answer

A) True 
 B)False

Question 16

Figure 5.3. Sweden's Apple Market  
-Consider Figure 5.3.After the quota is levied, the price of apples in Sweden will equal

Accepted Answer

A)  $0.60 per pound. 
B)  $1.00 per pound. 
C)  $1.40 per pound. 
D)  $1.80 per pound. 
A)  $0.60 per pound. 
B)  $1.00 per pound. 
C)  $1.40 per pound. 
D)  $1.80 per pound.

Question 17

Which trade restriction stipulates the percentage of a product's total value that must be produced domestically in order for that product to be sold domestically?

Accepted Answer

A)  import quota 
B)  orderly marketing agreement 
C)  local content requirement 
D)  government procurement policy 
A)  import quota 
B)  orderly marketing agreement 
C)  local content requirement 
D)  government procurement policy

Question 18

Import quotas

Accepted Answer

A)  increase the price to the domestic consumer. 
B)  have a protective effect but not a consumption effect. 
C)  have a consumption effect but not a protective effect. 
D)  generate no deadweight welfare losses for the home country. 
A)  increase the price to the domestic consumer. 
B)  have a protective effect but not a consumption effect. 
C)  have a consumption effect but not a protective effect. 
D)  generate no deadweight welfare losses for the home country.

Question 19

Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota on its automakers.The largest share of the export quota's "revenue effect" would tend to be captured by

Accepted Answer

A)  the U.S. government. 
B)  Japanese automakers. 
C)  American auto consumers. 
D)  American autoworkers. 
A)  the U.S. government. 
B)  Japanese automakers. 
C)  American auto consumers. 
D)  American autoworkers.

Question 20

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

Accepted Answer

A)  gains totaling $1.60. 
B)  gains totaling $3.20. 
C)  losses totaling $1.60. 
D)  losses totaling $3.20. 
A)  gains totaling $1.60. 
B)  gains totaling $3.20. 
C)  losses totaling $1.60. 
D)  losses totaling $3.20.

Which is NOT true about the practices in Japanese ports?

Throughout the world, governments auction quota licenses

When increases in nonrestraint supply offset part of the cutback in shipments that occur under an export quota, the overall inefficiency loss for the importing country is less than that which would have occurred in the absence of nonrestrained exports.

A producer successfully practicing international dumping would charge

Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.The quota leads to a deadweight welfare loss for Sweden of an amount equaling

Domestic content legislation applied to autos would tend to

Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country's

Sporadic (distress) dumping would occur if domestic orange producers dispose of an excess quantity of oranges, resulting from an abnormally large harvest, by selling them at lower prices abroad than at home.

In 2011 Whirlpool Inc.won an antidumping/subsidy case against clothes-washer imports from Samsung and LG.This resulted in antidumping/subsidy duties being imposed on imports of clothes washers from these foreign producers.

A firm would increase profits from dumping if it charged a lower price at home, where demand is inelastic, and a higher price abroad, where demand is elastic.

For a tariff-rate quota, the within-quota tariff rate is more than the over-quota tariff rate.

Assume that the manufacturing cost of a company is $50,0000 and the general expenses is $50,000.Then, the amount of profit must be equal to at least _____ for the cost-based definition criterion of foreign market value to be met.

An effective Buy American law would tend to increase U.S.producer surplus at the expense of U.S.consumer surplus.

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.The deadweight welfare loss to Mexico, as a result of the Japanese export quota, totals $1,200.

Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.After the quota is levied, the price of apples in Sweden will equal

Which trade restriction stipulates the percentage of a product's total value that must be produced domestically in order for that product to be sold domestically?

Import quotas

Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota on its automakers.The largest share of the export quota's "revenue effect" would tend to be captured by

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

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

Which is NOT true about the practices in Japanese ports?

Throughout the world, governments auction quota licenses

When increases in nonrestraint supply offset part of the cutback in shipments that occur under an export quota, the overall inefficiency loss for the importing country is less than that which would have occurred in the absence of nonrestrained exports.

A producer successfully practicing international dumping would charge

Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.The quota leads to a deadweight welfare loss for Sweden of an amount equaling

Domestic content legislation applied to autos would tend to

Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country's

Sporadic (distress) dumping would occur if domestic orange producers dispose of an excess quantity of oranges, resulting from an abnormally large harvest, by selling them at lower prices abroad than at home.

In 2011 Whirlpool Inc.won an antidumping/subsidy case against clothes-washer imports from Samsung and LG.This resulted in antidumping/subsidy duties being imposed on imports of clothes washers from these foreign producers.

A firm would increase profits from dumping if it charged a lower price at home, where demand is inelastic, and a higher price abroad, where demand is elastic.

For a tariff-rate quota, the within-quota tariff rate is more than the over-quota tariff rate.

Assume that the manufacturing cost of a company is $50,0000 and the general expenses is $50,000.Then, the amount of profit must be equal to at least _____ for the cost-based definition criterion of foreign market value to be met.

An effective Buy American law would tend to increase U.S.producer surplus at the expense of U.S.consumer surplus.

Figure 5.5. Mexico's Television Market -Consider Figure 5.5.The deadweight welfare loss to Mexico, as a result of the Japanese export quota, totals $1,200.

Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.After the quota is levied, the price of apples in Sweden will equal

Which trade restriction stipulates the percentage of a product's total value that must be produced domestically in order for that product to be sold domestically?

Import quotas

Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota on its automakers.The largest share of the export quota's "revenue effect" would tend to be captured by

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

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