Exam 9: The Instruments of Trade Policy

The two deadweight triangles are the Consumption distortion and Production distortion losses.It is easy to understand why the Consumption distortion constitutes a loss for society.After all it raises the prices of goods to consumers,and even causes some consumers to drop out of the market altogether.It seems paradoxical that the Production distortion is considered an equivalent burden on society.After all,in this case,profits increase,and additional production (with its associated employment)comes on line.This would seem to be an offset rather than an addition to the burden or loss borne by society.Explain why the Production distortion is indeed a loss to society,and what is wrong with the logic that leads to the apparent paradox.

The change in the economic welfare of a country associated with an increase in a tariff equals

A problem encountered when implementing an "infant industry" tariff is that

An import quota is similar to a ________ in its effect on imports,except that an import quota ________.

If a good is imported into (small)country H from country F,then the imposition of a tariff In country H

Of the many arguments in favor of tariffs,the one that has enjoyed significant economic justification has been the

If an import-competing firm is imperfectly competitive,than under free trade an import quota will ________ domestic market price,________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

If the tariff on computers is not changed,but domestic computer producers shift from domestically produced semiconductors to imported components,then the effective rate of protection in the computer industry will

-Refer to above figure.In the absence of trade,how many Widgets does this country consume?

-Refer to above figure.With a specific tariff of $3 per unit,what is the quantity of Widgets imported?

Tariff rates on products imported into the U.S.

If the tariff on computers is not changed,but the government then adds hitherto nonexistent tariffs on imported semi-conductor components,then the effective rate of protection in the computer industry will

Tariffs are NOT defended on the grounds that they

A specific tariff provides home producers more protection when

What is a TRUE statement concerning the imposition in the U.S.of a tariff on cheese?

A tax of 20 cents per unit of imported garlic is an example of a(n)

-Refer to above figure.In the absence of trade,what is the country's consumer surplus?

Which of the following are examples of goods that have been subject to voluntary export restraints?

If a small country imposes a tariff,then

-Refer to above figure.The lowest specific tariff which would be considered prohibitive is ________.