Question 1

High tariffs on intermediate inputs

Accepted Answer

A) increase the effective rate of protection on final goods. 
B) have no impact on the effective rate of protection on final goods. 
C) decrease the effective rate of protection on final goods. 
D) lower the nominal rate of protection on final goods. 
E) raise the nominal rate of protection on final goods. 
A) increase the effective rate of protection on final goods. 
B) have no impact on the effective rate of protection on final goods. 
C) decrease the effective rate of protection on final goods. 
D) lower the nominal rate of protection on final goods. 
E) raise the nominal rate of protection on final goods. C

Question 2

What do developing countries want regarding agriculture in the Doha Round?

Accepted Answer

To limit government practices that block their access to markets or that subsidize production in high income countries

Question 3

In economic terms,tariffs are preferred to quotas because

Accepted Answer

A) domestic manufacturers gain more producer surplus. 
B) there is less loss of consumer surplus. 
C) tariffs are easier to administer. 
D) quotas create a greater production inefficiency. 
E) given the way quotas are usually administered,tariffs cause a smaller net national welfare loss. 
A) domestic manufacturers gain more producer surplus. 
B) there is less loss of consumer surplus. 
C) tariffs are easier to administer. 
D) quotas create a greater production inefficiency. 
E) given the way quotas are usually administered,tariffs cause a smaller net national welfare loss. E

Question 4

If politicians decide to proceed with protection,why might economists prefer tariffs to quotas? Explain at least three reasons.

Accepted Answer

I would expect my students to address th

Question 5

If the effective rate of protection is greater than the nominal rate of protection,there must be tariffs on intermediate products.

Accepted Answer

A) True 
 B)False

Question 6

Consumer surplus is equal to the area

Accepted Answer

A) under the demand curve and above the supply curve. 
B) above the supply curve and below the price line. 
C) under the demand curve. 
D) under the supply curve. 
E) under the demand curve and above the price line. 
A) under the demand curve and above the supply curve. 
B) above the supply curve and below the price line. 
C) under the demand curve. 
D) under the supply curve. 
E) under the demand curve and above the price line.

Question 7

The production side efficiency loss of a tariff is caused by

Accepted Answer

A) confusion about prices when a tariff is imposed. 
B) higher profits gained by foreign producers. 
C) the expansion of relative inefficient domestic production. 
D) the contraction of domestic consumption. 
E) the increase in government revenue. 
A) confusion about prices when a tariff is imposed. 
B) higher profits gained by foreign producers. 
C) the expansion of relative inefficient domestic production. 
D) the contraction of domestic consumption. 
E) the increase in government revenue.

Question 8

Large countries can improve their welfare by levying a tariff only if it does not

Accepted Answer

A) encourage rent seeking elsewhere in the economy. 
B) discourage innovation. 
C) lead to retaliation by the nation's trading partners. 
D) All of the above. 
E) None of the above. 
A) encourage rent seeking elsewhere in the economy. 
B) discourage innovation. 
C) lead to retaliation by the nation's trading partners. 
D) All of the above. 
E) None of the above.

Question 9

Nontariff measures are generally much more difficult to eliminate than tariffs and quotas because they are embedded more deeply in national economic policies.

Accepted Answer

A) True 
 B)False

Question 10

Tariff revenue is an important source of operating revenue for many governments of high income countries.

Accepted Answer

A) True 
 B)False

Question 11

Average tariff rates are highest for

Accepted Answer

A) high-income countries. 
B) middle-income countries. 
C) low-income countries. 
D) industrialized countries. 
A) high-income countries. 
B) middle-income countries. 
C) low-income countries. 
D) industrialized countries.

Question 12

Figure 6.1
Use the graph below and the following information to answer the next question(s).The world price of soybeans is $2.00 per bushel,and the importing country is small enough not to affect the world price.
  
-Based on Figure 6.1,how much revenue will the government raise from a $0.25 per bushel tariff on soybean imports?

Accepted Answer

A) The government will raise $2.5 million. 
B) The government will raise $5 million. 
C) The government will raise $15 million. 
D) The government will raise $32.5 million. 
E) The government will see no increase in income;because the country is small,foreign firms will simply not serve it after the tariff is imposed. 
A) The government will raise $2.5 million. 
B) The government will raise $5 million. 
C) The government will raise $15 million. 
D) The government will raise $32.5 million. 
E) The government will see no increase in income;because the country is small,foreign firms will simply not serve it after the tariff is imposed.

Question 13

What are some of the long-run costs of tariffs?

Accepted Answer

Increased rent seeki

Question 14

Internationally,the TRIPS agreement is uniformly regarded as a positive step for world prosperity.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is FALSE?

Accepted Answer

A) At the end of the twentieth century,more and more traded goods and services incorporated specialized knowledge and unique ideas. 
B) Pharmaceuticals,computer hardware,telecommunications equipment,and other high technology products are valuable because of the innovation and research they incorporate. 
C) Software,movies,music,and other artistic expressions are valued for their creativity. 
D) Developing countries usually strongly advocate the protection of intellectual property rights. 
E) The protection given to creators and innovators varied greatly internationally until standardization began with the signing of the TRIPs agreement. 
A) At the end of the twentieth century,more and more traded goods and services incorporated specialized knowledge and unique ideas. 
B) Pharmaceuticals,computer hardware,telecommunications equipment,and other high technology products are valuable because of the innovation and research they incorporate. 
C) Software,movies,music,and other artistic expressions are valued for their creativity. 
D) Developing countries usually strongly advocate the protection of intellectual property rights. 
E) The protection given to creators and innovators varied greatly internationally until standardization began with the signing of the TRIPs agreement.

Question 16

Nominal rates of protection

Accepted Answer

A) are always greater than effective rates of protection. 
B) are always smaller than effective rates of protection. 
C) refer to the tariffs placed on intermediate goods used to make the final good or service. 
D) cannot be negative. 
A) are always greater than effective rates of protection. 
B) are always smaller than effective rates of protection. 
C) refer to the tariffs placed on intermediate goods used to make the final good or service. 
D) cannot be negative.

Question 17

Scenario 6.1
Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500.The imports have no tariff of quota restrictions.
-Based on Scenario 6.1 above,value added in the United States is

Accepted Answer

A) $500. 
B) $600. 
C) $400. 
D) $300. 
E) None of the above. 
A) $500. 
B) $600. 
C) $400. 
D) $300. 
E) None of the above.

Question 18

The new GATS and TRIPS are separate agreements negotiated within the WTO framework as part of the Uruguay Round that apply to

Accepted Answer

A) services and aircraft. 
B) services and transportation. 
C) agriculture and textiles. 
D) services and intellectual property. 
E) textiles and transportation. 
A) services and aircraft. 
B) services and transportation. 
C) agriculture and textiles. 
D) services and intellectual property. 
E) textiles and transportation.

Question 19

Since the mid-1980s tariff rates in most nations have risen.

Accepted Answer

A) True 
 B)False

Question 20

What are the three major types of quotas?

Accepted Answer

Formal quotas outrig

High tariffs on intermediate inputs

What do developing countries want regarding agriculture in the Doha Round?

In economic terms,tariffs are preferred to quotas because

If politicians decide to proceed with protection,why might economists prefer tariffs to quotas? Explain at least three reasons.

If the effective rate of protection is greater than the nominal rate of protection,there must be tariffs on intermediate products.

Consumer surplus is equal to the area

The production side efficiency loss of a tariff is caused by

Large countries can improve their welfare by levying a tariff only if it does not

Nontariff measures are generally much more difficult to eliminate than tariffs and quotas because they are embedded more deeply in national economic policies.

Tariff revenue is an important source of operating revenue for many governments of high income countries.

Average tariff rates are highest for

What are some of the long-run costs of tariffs?

Internationally,the TRIPS agreement is uniformly regarded as a positive step for world prosperity.

Which of the following is FALSE?

Nominal rates of protection

Scenario 6.1 Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500.The imports have no tariff of quota restrictions. -Based on Scenario 6.1 above,value added in the United States is

The new GATS and TRIPS are separate agreements negotiated within the WTO framework as part of the Uruguay Round that apply to

Since the mid-1980s tariff rates in most nations have risen.

What are the three major types of quotas?

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters

Exam 6: The Theory of Tariffs and Quotas

High tariffs on intermediate inputs

What do developing countries want regarding agriculture in the Doha Round?

In economic terms,tariffs are preferred to quotas because

If politicians decide to proceed with protection,why might economists prefer tariffs to quotas? Explain at least three reasons.

If the effective rate of protection is greater than the nominal rate of protection,there must be tariffs on intermediate products.

Consumer surplus is equal to the area

The production side efficiency loss of a tariff is caused by

Large countries can improve their welfare by levying a tariff only if it does not

Nontariff measures are generally much more difficult to eliminate than tariffs and quotas because they are embedded more deeply in national economic policies.

Tariff revenue is an important source of operating revenue for many governments of high income countries.

Average tariff rates are highest for

What are some of the long-run costs of tariffs?

Internationally,the TRIPS agreement is uniformly regarded as a positive step for world prosperity.

Which of the following is FALSE?

Nominal rates of protection

Scenario 6.1 Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500.The imports have no tariff of quota restrictions. -Based on Scenario 6.1 above,value added in the United States is

The new GATS and TRIPS are separate agreements negotiated within the WTO framework as part of the Uruguay Round that apply to

Since the mid-1980s tariff rates in most nations have risen.

What are the three major types of quotas?

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters