Question 1

Figure 4.3 Domestic Market for Gasoline in the United States   ​
-Figure 4.3 represents the domestic market for gasoline in the United States.What is the producer surplus in this market?

Accepted Answer

A)  60 gallons of gasoline 
B)  $120 
C)  $60 
D)  $3 
A)  60 gallons of gasoline 
B)  $120 
C)  $60 
D)  $3

Question 2

Empirical studies show that virtually all U.S.import tariffs are "progressive" in that they disproportionately negatively impact upper income groups rather than lower income groups.

Accepted Answer

A) True 
 B)False

Question 3

A $100 specific tariff provides home producers more protection from foreign competition when

Accepted Answer

A)  the home market buys cheaper products rather than expensive products. 
B)  it is applied to a commodity with many grade variations. 
C)  the home demand for a good is elastic with respect to price changes. 
D)  it is levied on manufactured goods rather than primary products. 
A)  the home market buys cheaper products rather than expensive products. 
B)  it is applied to a commodity with many grade variations. 
C)  the home demand for a good is elastic with respect to price changes. 
D)  it is levied on manufactured goods rather than primary products.

Question 4

For the United States, a foreign trade zone (FTZ) is

Accepted Answer

A)  a site within the United States. 
B)  a site outside the United States. 
C)  always located in poorer developing countries. 
D)  is used to discourage trade. 
A)  a site within the United States. 
B)  a site outside the United States. 
C)  always located in poorer developing countries. 
D)  is used to discourage trade.

Question 5

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.With free trade, the total value of Mexico's imports equal

Accepted Answer

A)  $220. 
B)  $260. 
C)  $290. 
D)  $300. 
A)  $220. 
B)  $260. 
C)  $290. 
D)  $300.

Question 6

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 redistribution effect equals $1,000.

Accepted Answer

A) True 
 B)False

Question 7

When no imported inputs are used in the production of computers, the effective tariff rate on computers

Accepted Answer

A)  exceeds the nominal tariff rate on computers. 
B)  is less than the nominal tariff rate on computers. 
C)  equals the nominal tariff rate on computers. 
D)  equals zero. 
A)  exceeds the nominal tariff rate on computers. 
B)  is less than the nominal tariff rate on computers. 
C)  equals the nominal tariff rate on computers. 
D)  equals zero.

Question 8

If a "large" country levies a tariff on imports it cannot improve the terms at which it trades with other countries.

Accepted Answer

A) True 
 B)False

Question 9

A tax of 15 percent per imported item is an example of a(an)

Accepted Answer

A)  ad valorem tariff. 
B)  specific tariff. 
C)  compound tariff. 
D)  optimum tariff. 
A)  ad valorem tariff. 
B)  specific tariff. 
C)  compound tariff. 
D)  optimum tariff.

Question 10

Suppose that the United States eliminates its tariff on steel imports, permitting foreign-produced steel to enter the U.S.market.Steel prices to U.S.consumers would be expected to

Accepted Answer

A)  increase, and the foreign demand for U.S. exports would increase. 
B)  decrease, and the foreign demand for U.S. exports would increase. 
C)  increase, and the foreign demand for U.S. exports would decrease. 
D)  decrease, and the foreign demand for U.S. exports would decrease. 
A)  increase, and the foreign demand for U.S. exports would increase. 
B)  decrease, and the foreign demand for U.S. exports would increase. 
C)  increase, and the foreign demand for U.S. exports would decrease. 
D)  decrease, and the foreign demand for U.S. exports would decrease.

Question 11

A beggar-thy-neighbor policy is the imposition of

Accepted Answer

A)  free trade to increase domestic productivity. 
B)  trade barriers to increase domestic demand and employment. 
C)  import tariffs to curb domestic inflation. 
D)  revenue tariffs to make products cheaper for domestic consumers. 
A)  free trade to increase domestic productivity. 
B)  trade barriers to increase domestic demand and employment. 
C)  import tariffs to curb domestic inflation. 
D)  revenue tariffs to make products cheaper for domestic consumers.

Question 12

A small nation places a tariff of $1000.00 on automobiles.If 40 autos are imported, the government collects $40,000 in duties.This is a calculation of the

Accepted Answer

A)  redistributive effect. 
B)  protective effect. 
C)  revenue effect. 
D)  consumption effect. 
A)  redistributive effect. 
B)  protective effect. 
C)  revenue effect. 
D)  consumption effect.

Question 13

The nominal tariff rate signifies the total increase in domestic productive activities compared to what would occur under free-trade conditions.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is NOT a rationale for tariffs?

Accepted Answer

A)  They improve the terms of trade for small and large nations. 
B)  They protect jobs and reduce unemployment. 
C)  They promote growth and development of young industries. 
D)  They promote a level playing field in terms of trade. 
A)  They improve the terms of trade for small and large nations. 
B)  They protect jobs and reduce unemployment. 
C)  They promote growth and development of young industries. 
D)  They promote a level playing field in terms of trade.

Question 15

There is widespread agreement among economists that import tariffs increase overall employment in the levying country.

Accepted Answer

A) True 
 B)False

Question 16

A tariff can be thought of as a tax on imported goods.

Accepted Answer

A) True 
 B)False

Question 17

Suppose that Mexico levies a tariff on steel that is collected as a fixed amount of money per ton imported.This refers to

Accepted Answer

A)  a compound tariff. 
B)  an ad valorem tariff. 
C)  a specific tariff. 
D)  an effective tariff. 
A)  a compound tariff. 
B)  an ad valorem tariff. 
C)  a specific tariff. 
D)  an effective tariff.

Question 18

If a small country levies a tariff on imports, its overall national welfare necessarily falls.

Accepted Answer

A) True 
 B)False

Question 19

The U.S.constitution allows the country to levy tariffs

Accepted Answer

A)  only on exports. 
B)  only on imports. 
C)  on both exports and imports. 
D)  on neither exports nor imports. 
A)  only on exports. 
B)  only on imports. 
C)  on both exports and imports. 
D)  on neither exports nor imports.

Question 20

Which statement is true of tariff reductions?

Accepted Answer

A)  Reciprocal tariff liberalization has quickly become widespread to support free trade. 
B)  Tariff reductions primarily benefit import-competing industries within a nation. 
C)  Tariff reductions lead to increased foreign competition that undermines the welfare of a nation. 
D)  Tariff reductions can increase the overall welfare of a nation when affected industries are compensated for their losses. 
A)  Reciprocal tariff liberalization has quickly become widespread to support free trade. 
B)  Tariff reductions primarily benefit import-competing industries within a nation. 
C)  Tariff reductions lead to increased foreign competition that undermines the welfare of a nation. 
D)  Tariff reductions can increase the overall welfare of a nation when affected industries are compensated for their losses.

Figure 4.3 Domestic Market for Gasoline in the United States -Figure 4.3 represents the domestic market for gasoline in the United States.What is the producer surplus in this market?

Empirical studies show that virtually all U.S.import tariffs are "progressive" in that they disproportionately negatively impact upper income groups rather than lower income groups.

A $100 specific tariff provides home producers more protection from foreign competition when

For the United States, a foreign trade zone (FTZ) is

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.With free trade, the total value of Mexico's imports equal

When no imported inputs are used in the production of computers, the effective tariff rate on computers

If a "large" country levies a tariff on imports it cannot improve the terms at which it trades with other countries.

A tax of 15 percent per imported item is an example of a(an)

Suppose that the United States eliminates its tariff on steel imports, permitting foreign-produced steel to enter the U.S.market.Steel prices to U.S.consumers would be expected to

A beggar-thy-neighbor policy is the imposition of

A small nation places a tariff of $1000.00 on automobiles.If 40 autos are imported, the government collects $40,000 in duties.This is a calculation of the

The nominal tariff rate signifies the total increase in domestic productive activities compared to what would occur under free-trade conditions.

Which of the following is NOT a rationale for tariffs?

There is widespread agreement among economists that import tariffs increase overall employment in the levying country.

A tariff can be thought of as a tax on imported goods.

Suppose that Mexico levies a tariff on steel that is collected as a fixed amount of money per ton imported.This refers to

If a small country levies a tariff on imports, its overall national welfare necessarily falls.

The U.S.constitution allows the country to levy tariffs

Which statement is true of tariff reductions?

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

Figure 4.3 Domestic Market for Gasoline in the United States ​ -Figure 4.3 represents the domestic market for gasoline in the United States.What is the producer surplus in this market?

Empirical studies show that virtually all U.S.import tariffs are "progressive" in that they disproportionately negatively impact upper income groups rather than lower income groups.

A $100 specific tariff provides home producers more protection from foreign competition when

For the United States, a foreign trade zone (FTZ) is

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.With free trade, the total value of Mexico's imports equal

When no imported inputs are used in the production of computers, the effective tariff rate on computers

If a "large" country levies a tariff on imports it cannot improve the terms at which it trades with other countries.

A tax of 15 percent per imported item is an example of a(an)

Suppose that the United States eliminates its tariff on steel imports, permitting foreign-produced steel to enter the U.S.market.Steel prices to U.S.consumers would be expected to

A beggar-thy-neighbor policy is the imposition of

A small nation places a tariff of $1000.00 on automobiles.If 40 autos are imported, the government collects $40,000 in duties.This is a calculation of the

The nominal tariff rate signifies the total increase in domestic productive activities compared to what would occur under free-trade conditions.

Which of the following is NOT a rationale for tariffs?

There is widespread agreement among economists that import tariffs increase overall employment in the levying country.

A tariff can be thought of as a tax on imported goods.

Suppose that Mexico levies a tariff on steel that is collected as a fixed amount of money per ton imported.This refers to

If a small country levies a tariff on imports, its overall national welfare necessarily falls.

The U.S.constitution allows the country to levy tariffs

Which statement is true of tariff reductions?

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

Figure 4.3 Domestic Market for Gasoline in the United States -Figure 4.3 represents the domestic market for gasoline in the United States.What is the producer surplus in this market?