Question 1

What is an "export subsidy"?

Accepted Answer

A) a payment by one government to another for exports 
B) a payment (or other benefit) to domestic firms by their government to help them sell exports more cheaply 
C) the rule that says all exports must be taxed before they leave the port 
D) a provision that exporters must get their payments indirectly through a third party 
A) a payment by one government to another for exports 
B) a payment (or other benefit) to domestic firms by their government to help them sell exports more cheaply 
C) the rule that says all exports must be taxed before they leave the port 
D) a provision that exporters must get their payments indirectly through a third party B

Question 2

Why did Europe choose to use retaliatory tariffs on U.S.exports of
oranges, apples, and other agricultural goods?

Accepted Answer

This put the greatest political pressure on George Bush, whose brother
and major centers of support were located in states that specialized in
these exported products.

Question 3

(Figure: The Soybean Market)
A) What is the price of U.S.soybeans before trade?
B) What is the price of U.S.soybeans after trade?
C) After trade, what will be the quantity of soybeans consumed in the
United States?
D) After trade, how many tons will be produced by the United States?
E) Suppose the U.S.government imposes a tariff of $3 per ton on
imported soybeans.What will be the new U.S.price?
F) Now suppose the U.S.government imposes a tariff of $3 per ton on
imported soybeans.What is the new U.S.quantity produced domestically?
G) What is the new level of imports with the tariff of $3 per ton on
imported soybeans?
H) How much revenue will the U.S.government collect when it imposes
the $3 per ton tariff?
I) How large a tariff would eliminate all imports?

Accepted Answer

A) $12
B) $6
C) 550
D) 150
E) $9
F) 250
G) 200
H) $600
I) $6

Question 4

The Home import demand curve is downward sloping because:

Accepted Answer

A) as the government forces the price down, consumers buy more. 
B) foreign companies want to help domestic competitors. 
C) as the price falls below domestic equilibrium, the shortage in demand is filled by importing more quantity from abroad. 
D) consumers can control the price of the good. 
A) as the government forces the price down, consumers buy more. 
B) foreign companies want to help domestic competitors. 
C) as the price falls below domestic equilibrium, the shortage in demand is filled by importing more quantity from abroad. 
D) consumers can control the price of the good.

Question 5

(Figure: The Import­Competing Industry) If the demand for the product
Increases and the new equilibrium price is 30 and quantity is 50, what is
The increase in producer surplus?

Accepted Answer

A) $625 
B) $550 
C) $255 
D) $370 
A) $625 
B) $550 
C) $255 
D) $370

Question 6

A free­trade area is defined as:

Accepted Answer

A) a trading agreement that allows for free flow of resources. 
B) a trading agreement that binds member countries to have a uniform tariff on other countries. 
C) a trading agreement that lets countries rely on subsidies on domestic production. 
D) a trading agreement in which a group of countries voluntarily agree to remove trade barriers between themselves. 
A) a trading agreement that allows for free flow of resources. 
B) a trading agreement that binds member countries to have a uniform tariff on other countries. 
C) a trading agreement that lets countries rely on subsidies on domestic production. 
D) a trading agreement in which a group of countries voluntarily agree to remove trade barriers between themselves.

Question 7

(Figure: Home's Import­Competing Industry) Based on the graph, which
Of the following statement(s) about the Home import demand curve
Is(are) CORRECT?
I.The Home import demand curve shows total imports of the product at
Various world prices
II.According to the Home import demand curve, this nation would import
Nothing when the world price is $100.
III.According to the Home import demand curve, this nation would import
900 units when the world price of $50.

Accepted Answer

A) I 
B) II 
C) III 
D) I, II, and III 
A) I 
B) II 
C) III 
D) I, II, and III

Question 8

Which of the following is NOT an important provision of GATT?

Accepted Answer

A) the most favored nation clause 
B) the safeguard provision or escape clause 
C) antidumping tariffs 
D) approval of export subsidies 
A) the most favored nation clause 
B) the safeguard provision or escape clause 
C) antidumping tariffs 
D) approval of export subsidies

Question 9

We can measure producer and consumer surplus by looking at the supply
And demand graphical representation.Producer surplus is:

Accepted Answer

A) the area above the supply curve but below the equilibrium price. 
B) the area below the demand curve but greater than the equilibrium price. 
C) the area below the demand curve all the way down to the quantity axis. 
D) the combined triangular area below the demand curve and above the supply curve. 
A) the area above the supply curve but below the equilibrium price. 
B) the area below the demand curve but greater than the equilibrium price. 
C) the area below the demand curve all the way down to the quantity axis. 
D) the combined triangular area below the demand curve and above the supply curve.

Question 10

(Figure: Home's Import­Competing Industry) What is the domestic price
After trade?

Accepted Answer

A) $100 
B) $800 
C) $50 
D) $1,300 
A) $100 
B) $800 
C) $50 
D) $1,300

Question 11

The safeguard provision or escape clause allows a country to:

Accepted Answer

A) import products below cost from foreign countries. 
B) export products by selling below cost to foreign countries. 
C) avoid tariffs in foreign countries temporarily. 
D) temporarily increase tariffs on certain imported goods. 
A) import products below cost from foreign countries. 
B) export products by selling below cost to foreign countries. 
C) avoid tariffs in foreign countries temporarily. 
D) temporarily increase tariffs on certain imported goods.

Question 12

Rank the following in ascending order of an imposing small country's
welfare.If there are any two that are equivalent, explain their equivalencies.
A) a tariff of t in a small country resulting in imports of M units
B) a quota of M units of imports, with the government auctioning quota
licenses to the highest bidders
C) a quota of M units of imports in which domestic firms engage in rent­
seeking activities.
D) an arrangement in which the exporting country voluntarily agrees to
limit its exports to M units

Accepted Answer

Options A and B are equivalent and prefe

Question 13

SCENARIO: PRODUCTION IN NORWAY
Suppose that Norway is a small country and currently produces 100,000
Board feet of lumber at $600 per 1,000 board feet.Then it begins to trade
At the world price of $500 per 1,000 board feet.As a result of trade,
Norway's production falls to 50,000 board feet and its consumption
Increases to 200,000 board feet.
Reference: Ref 8­2
(Scenario: Production in Norway) What is the Norway's total welfare gain
Once it begins to trade?

Accepted Answer

A) $5,000 
B) $7,500 
C) $15,000 
D) $17,500 
A) $5,000 
B) $7,500 
C) $15,000 
D) $17,500

Question 14

An international conference in Bretton Woods, New Hampshire, in 1944
Resulted in the formation of:

Accepted Answer

A) the European Union in 1945. 
B) the Kyoto Agreement in 1971. 
C) the General Agreement on Tariffs and Trade (GATT) in 1947. 
D) the International Red Cross in 1955. 
A) the European Union in 1945. 
B) the Kyoto Agreement in 1971. 
C) the General Agreement on Tariffs and Trade (GATT) in 1947. 
D) the International Red Cross in 1955.

Question 15

We can measure producer and consumer gains by looking at the supply
And demand graphical representation.Total welfare in the economy would
Be:

Accepted Answer

A) the area above the supply curve but below the equilibrium price. 
B) the area below the demand curve but greater than the equilibrium price. 
C) the area below the demand curve all the way down to the quantity axis. 
D) the combined triangular area below the demand curve and above the supply curve. 
A) the area above the supply curve but below the equilibrium price. 
B) the area below the demand curve but greater than the equilibrium price. 
C) the area below the demand curve all the way down to the quantity axis. 
D) the combined triangular area below the demand curve and above the supply curve.

Question 16

A customs union is different from a free­trade area, in that:

Accepted Answer

A) the latter allows for free movement of factors, whereas the former does not. 
B) the latter allows for uniform tariffs, whereas the former does not. 
C) the latter removes trade barriers between member countries, whereas the former adopts identical tariffs with the rest of the world. 
D) the former removes trade barriers between member countries, whereas the latter adopts identical tariffs with the rest of the world. 
A) the latter allows for free movement of factors, whereas the former does not. 
B) the latter allows for uniform tariffs, whereas the former does not. 
C) the latter removes trade barriers between member countries, whereas the former adopts identical tariffs with the rest of the world. 
D) the former removes trade barriers between member countries, whereas the latter adopts identical tariffs with the rest of the world.

Question 17

(Figure: Consumer Surplus) If the price of the product decreases to $10,
The consumer surplus increases by:

Accepted Answer

A) $378. 
B) $208. 
C) $420. 
D) $170. 
A) $378. 
B) $208. 
C) $420. 
D) $170.

Question 18

Most favored nation status requires:

Accepted Answer

A) a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other WTO members. 
B) a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other countries. 
C) a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other WTO members. 
D) a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other countries. 
A) a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other WTO members. 
B) a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other countries. 
C) a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other WTO members. 
D) a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other countries.

Question 19

Suppose that the equations S = 2P and D = 6 - P represent a small
Country's home supply and home demand curves.Which of the following
Is the equilibrium price in autarky?

Accepted Answer

A) $2 
B) $4 
C) $6 
D) $8 
A) $2 
B) $4 
C) $6 
D) $8

Question 20

(Figure: Home Market I) The Home market shown in the figure has
Imposed a _____ tariff.

Accepted Answer

A) $3 
B) $16 
C) $6 
D) $22 
A) $3 
B) $16 
C) $6 
D) $22

What is an "export subsidy"?

Why did Europe choose to use retaliatory tariffs on U.S.exports of oranges, apples, and other agricultural goods?

The Home import demand curve is downward sloping because:

(Figure: The ImportCompeting Industry) If the demand for the product Increases and the new equilibrium price is 30 and quantity is 50, what is The increase in producer surplus?

A freetrade area is defined as:

Which of the following is NOT an important provision of GATT?

We can measure producer and consumer surplus by looking at the supply And demand graphical representation.Producer surplus is:

(Figure: Home's ImportCompeting Industry) What is the domestic price After trade?

The safeguard provision or escape clause allows a country to:

An international conference in Bretton Woods, New Hampshire, in 1944 Resulted in the formation of:

We can measure producer and consumer gains by looking at the supply And demand graphical representation.Total welfare in the economy would Be:

A customs union is different from a freetrade area, in that:

(Figure: Consumer Surplus) If the price of the product decreases to $10, The consumer surplus increases by:

Most favored nation status requires:

Suppose that the equations S = 2P and D = 6 - P represent a small Country's home supply and home demand curves.Which of the following Is the equilibrium price in autarky?

(Figure: Home Market I) The Home market shown in the figure has Imposed a _____ tariff.

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

Exam 8: Import Tariffs and Quotas Under Imperfect Competition

What is an "export subsidy"?

Why did Europe choose to use retaliatory tariffs on U.S.exports of oranges, apples, and other agricultural goods?

The Home import demand curve is downward sloping because:

(Figure: The Import­Competing Industry) If the demand for the product Increases and the new equilibrium price is 30 and quantity is 50, what is The increase in producer surplus?

A free­trade area is defined as:

Which of the following is NOT an important provision of GATT?

We can measure producer and consumer surplus by looking at the supply And demand graphical representation.Producer surplus is:

(Figure: Home's Import­Competing Industry) What is the domestic price After trade?

The safeguard provision or escape clause allows a country to:

An international conference in Bretton Woods, New Hampshire, in 1944 Resulted in the formation of:

We can measure producer and consumer gains by looking at the supply And demand graphical representation.Total welfare in the economy would Be:

A customs union is different from a free­trade area, in that:

(Figure: Consumer Surplus) If the price of the product decreases to $10, The consumer surplus increases by:

Most favored nation status requires:

Suppose that the equations S = 2P and D = 6 - P represent a small Country's home supply and home demand curves.Which of the following Is the equilibrium price in autarky?

(Figure: Home Market I) The Home market shown in the figure has Imposed a _____ tariff.

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

(Figure: The ImportCompeting Industry) If the demand for the product Increases and the new equilibrium price is 30 and quantity is 50, what is The increase in producer surplus?

A freetrade area is defined as:

(Figure: Home's ImportCompeting Industry) What is the domestic price After trade?

A customs union is different from a freetrade area, in that: