Question 1

Arguments for U.S.trade restrictions include all of the following except

Accepted Answer

A)  job protection. 
B)  infant industry support. 
C)  maintenance of domestic living standard. 
D)  improving incomes for developing countries. 
A)  job protection. 
B)  infant industry support. 
C)  maintenance of domestic living standard. 
D)  improving incomes for developing countries. D

Question 2

The deadweight losses of an import tariff consist of the protection effect plus the consumption effect.

Accepted Answer

A) True 
 B)False  True

Question 3

In the absence of international trade, assume that the equilibrium price and quantity of motorcycles in Canada is $14,000 and 10 units respectively. Assuming that Canada is a small country that is unable to affect the world price of motorcycles, suppose its market is opened to international trade. As a result, the price of motorcycles falls to $12,000 and the total quantity demanded rises to 14 units; out of this total, 6 units are produced in Canada while 8 units are imported. Now assume that the Canadian government levies an import tariff of $1,000 on motorcycles. With the tariff, 8 units are produced in Canada and quantity demanded is 12 units.
-Refer to Exhibit 4.2.The tariff's revenue effect equals $6,000.

Accepted Answer

A) True 
 B)False  False

Question 4

A compound tariff is a combination of a(n)

Accepted Answer

A)  tariff quota and a two-tier tariff. 
B)  revenue tariff and a protective tariff. 
C)  import tariff and an export tariff. 
D)  specific tariff and an ad valorem tariff. 
A)  tariff quota and a two-tier tariff. 
B)  revenue tariff and a protective tariff. 
C)  import tariff and an export tariff. 
D)  specific tariff and an ad valorem tariff.

Question 5

For a "large" country, a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

Accepted Answer

A) True 
 B)False

Question 6

Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports.Which of the following refers to the above statement?

Accepted Answer

A)  tariff-quota effect 
B)  nominal tariff effect 
C)  tariff escalation effect 
D)  protective tariff effect 
A)  tariff-quota effect 
B)  nominal tariff effect 
C)  tariff escalation effect 
D)  protective tariff effect

Question 7

If a "large" country levies a tariff on an imported good, its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect exceeds the monetary value of the terms-of-trade effect.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

Accepted Answer

A)  specific tariff 
B)  ad valorem tariff 
C)  nominal tariff 
D)  effective tariff 
A)  specific tariff 
B)  ad valorem tariff 
C)  nominal tariff 
D)  effective tariff

Question 9

During the Great Recession of 2007-2009, countries increased import tariffs to protect domestic producers damaged by foreign competition.

Accepted Answer

A) True 
 B)False

Question 10

Assume the United States is a large consumer of steel that is able to influence the world price. Its demand and supply schedules are respectively denoted by DU.S. and SU.S. in Figure 4.2. The overall (United States plus world) supply schedule of steel is denoted by SU.S.+W.
Figure 4.2. Import Tariff Levied by a "Large" Country   ?
-According to Figure 4.2, the tariff's terms-of-trade effect equals

Accepted Answer

A)  $300. 
B)  $400. 
C)  $500. 
D)  $600. 
A)  $300. 
B)  $400. 
C)  $500. 
D)  $600.

Question 11

When the production of a commodity does NOT utilize imported inputs, the effective tariff rate

Accepted Answer

A)  exceeds the nominal tariff rate on the commodity. 
B)  equals the nominal tariff rate on the commodity. 
C)  is less than the nominal tariff rate on the commodity. 
D)  is a percentage of the nominal tariff rate on the commodity. 
A)  exceeds the nominal tariff rate on the commodity. 
B)  equals the nominal tariff rate on the commodity. 
C)  is less than the nominal tariff rate on the commodity. 
D)  is a percentage of the nominal tariff rate on the commodity.

Question 12

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price.
Figure 4.1. Import Tariff Levied by a "Small" Country  
-According to Figure 4.1, the deadweight cost of the tariff totals

Accepted Answer

A)  $60. 
B)  $70. 
C)  $80. 
D)  $90. 
A)  $60. 
B)  $70. 
C)  $80. 
D)  $90.

Question 13

With a compound tariff, a domestic importer of an automobile might be required to pay a duty of $200 plus 4 percent of the value of the automobile.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price.
Figure 4.1. Import Tariff Levied by a "Small" Country  
-Consider Figure 4.1.In the absence of trade, Mexico produces and consumes

Accepted Answer

A)  10 calculators. 
B)  40 calculators. 
C)  60 calculators. 
D)  80 calculators. 
A)  10 calculators. 
B)  40 calculators. 
C)  60 calculators. 
D)  80 calculators.

Question 15

If a country accounts for a negligible portion of international trade in a particular product, its levying an import tariff on that product necessarily increases its overall welfare.

Accepted Answer

A) True 
 B)False

Question 16

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price.
Figure 4.1. Import Tariff Levied by a "Small" Country  
-Consider Figure 4.1.In the absence of trade, Mexico's producer surplus and consumer surplus respectively equal

Accepted Answer

A)  $120 and $240. 
B)  $180 and $180. 
C)  $180 and $320. 
D)  $240 and $240. 
A)  $120 and $240. 
B)  $180 and $180. 
C)  $180 and $320. 
D)  $240 and $240.

Question 17

How can tariffs be justified?

Accepted Answer

Tariffs are justified on the grounds tha

Question 18

Which statement is true about the free trade argument?

Accepted Answer

A)  It has been adopted by numerous nations around the world through reductions in trade barriers. 
B)  It argues that tariffs and other trade barriers force industries to continually adjust practices. 
C)  It advocates for the uninhibited flow of goods, services, and capital between nations. 
D)  It is praised for considering real-world economic conditions and noneconomic factors like national security. 
A)  It has been adopted by numerous nations around the world through reductions in trade barriers. 
B)  It argues that tariffs and other trade barriers force industries to continually adjust practices. 
C)  It advocates for the uninhibited flow of goods, services, and capital between nations. 
D)  It is praised for considering real-world economic conditions and noneconomic factors like national security.

Question 19

Unlike a specific tariff, an ad valorem tariff offers a constant rate of protection.

Accepted Answer

A) True 
 B)False

Question 20

The price of a bag of chips is $1, but a customer is willing to pay up to $3.What would be the consumer surplus on this purchase?

Accepted Answer

A)  $3 
B)  $1 
C)  $2 
D)  $4 
A)  $3 
B)  $1 
C)  $2 
D)  $4

Arguments for U.S.trade restrictions include all of the following except

The deadweight losses of an import tariff consist of the protection effect plus the consumption effect.

A compound tariff is a combination of a(n)

For a "large" country, a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports.Which of the following refers to the above statement?

If a "large" country levies a tariff on an imported good, its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect exceeds the monetary value of the terms-of-trade effect.

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

During the Great Recession of 2007-2009, countries increased import tariffs to protect domestic producers damaged by foreign competition.

When the production of a commodity does NOT utilize imported inputs, the effective tariff rate

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price. Figure 4.1. Import Tariff Levied by a "Small" Country -According to Figure 4.1, the deadweight cost of the tariff totals

With a compound tariff, a domestic importer of an automobile might be required to pay a duty of $200 plus 4 percent of the value of the automobile.

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price. Figure 4.1. Import Tariff Levied by a "Small" Country -Consider Figure 4.1.In the absence of trade, Mexico produces and consumes

If a country accounts for a negligible portion of international trade in a particular product, its levying an import tariff on that product necessarily increases its overall welfare.

How can tariffs be justified?

Which statement is true about the free trade argument?

Unlike a specific tariff, an ad valorem tariff offers a constant rate of protection.

The price of a bag of chips is $1, but a customer is willing to pay up to $3.What would be the consumer surplus on this purchase?

The International Economy and Globalization

Foundations of Modern Trade Theory Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

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 4: Tariffs

Arguments for U.S.trade restrictions include all of the following except

The deadweight losses of an import tariff consist of the protection effect plus the consumption effect.

A compound tariff is a combination of a(n)

For a "large" country, a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports.Which of the following refers to the above statement?

If a "large" country levies a tariff on an imported good, its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect exceeds the monetary value of the terms-of-trade effect.

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

During the Great Recession of 2007-2009, countries increased import tariffs to protect domestic producers damaged by foreign competition.

When the production of a commodity does NOT utilize imported inputs, the effective tariff rate

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price. Figure 4.1. Import Tariff Levied by a "Small" Country -According to Figure 4.1, the deadweight cost of the tariff totals

With a compound tariff, a domestic importer of an automobile might be required to pay a duty of $200 plus 4 percent of the value of the automobile.

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price. Figure 4.1. Import Tariff Levied by a "Small" Country -Consider Figure 4.1.In the absence of trade, Mexico produces and consumes

If a country accounts for a negligible portion of international trade in a particular product, its levying an import tariff on that product necessarily increases its overall welfare.

How can tariffs be justified?

Which statement is true about the free trade argument?

Unlike a specific tariff, an ad valorem tariff offers a constant rate of protection.

The price of a bag of chips is $1, but a customer is willing to pay up to $3.What would be the consumer surplus on this purchase?

The International Economy and Globalization

Foundations of Modern Trade Theory Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

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