Question 1

Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,the effective rate of protection is

Accepted Answer

A) 20 percent. 
B) 25 percent. 
C) 30 percent. 
D) 40 percent. 
A) 20 percent. 
B) 25 percent. 
C) 30 percent. 
D) 40 percent. B

Question 2

Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,and another tariff of 50 percent is placed on imports of wood and parts,then the effective rate of protection on tables made in the United States is

Accepted Answer

A) 70 percent. 
B) 50 percent. 
C) 20 percent. 
D) 12.5 percent. 
A) 70 percent. 
B) 50 percent. 
C) 20 percent. 
D) 12.5 percent. D

Question 3

In order for large countries to successfully use tariffs to increase well-being,

Accepted Answer

A) they must have significant market power . 
B) the deadweight loss created by the tariff must be greater than the government revenue the tariff generates. 
C) domestic production must increase more significantly than for the small country case. 
D) domestic consumption and imports must decrease more significantly than in the small country case. 
A) they must have significant market power . 
B) the deadweight loss created by the tariff must be greater than the government revenue the tariff generates. 
C) domestic production must increase more significantly than for the small country case. 
D) domestic consumption and imports must decrease more significantly than in the small country case. A

Question 4

Why is the Doha Round called the Doha Development Round?

Accepted Answer

Because it pays part

Question 5

Which of the following is FALSE?

Accepted Answer

A) Tariffs are a relatively easy tax to administer and often form an important part of revenue for low-income countries. 
B) Taxes on income, sales, and property require more complex accounting systems than do tariffs. 
C) Low-income countries often have large informal markets with the sales of many goods and services not being recorded, which makes it difficult to apply many kinds of taxes. 
D) Tariffs are not an attractive tax option for most low-income countries, so they mostly rely on quota licenses for revenue. 
A) Tariffs are a relatively easy tax to administer and often form an important part of revenue for low-income countries. 
B) Taxes on income, sales, and property require more complex accounting systems than do tariffs. 
C) Low-income countries often have large informal markets with the sales of many goods and services not being recorded, which makes it difficult to apply many kinds of taxes. 
D) Tariffs are not an attractive tax option for most low-income countries, so they mostly rely on quota licenses for revenue.

Question 6

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 7

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

Question 8

What has been the most significant obstacle to progress in the Doha Round?

Accepted Answer

Agricultur

Question 9

Nontariff barriers to trade are less transparent than tariffs.

Accepted Answer

A) True 
 B)False

Question 10

Carefully explain how the imposition of a tariff is different for a large country (that can affect the world price)than a small country.

Accepted Answer

For a small country,imposition of a tari

Question 11

Which of the following is FALSE?

Accepted Answer

A) Consumer surplus increases after a tariff is placed on imports. 
B) Producer surplus increases after a tariff is imposed. 
C) Government revenue increases after a tariff is imposed. 
D) Deadweight losses result from tariffs. 
A) Consumer surplus increases after a tariff is placed on imports. 
B) Producer surplus increases after a tariff is imposed. 
C) Government revenue increases after a tariff is imposed. 
D) Deadweight losses result from tariffs.

Question 12

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 13

An increase in domestic demand for a product protected by a quota results in an increase in producer surplus for domestic firms,while for a tariff it would result in more imports.

Accepted Answer

A) True 
 B)False

Question 14

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) quotas create a greater production inefficiency. 
D) 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) quotas create a greater production inefficiency. 
D) given the way quotas are usually administered, tariffs cause a smaller net national welfare loss.

Question 15

Over time,quotas usually lead to larger deadweight losses than tariffs.

Accepted Answer

A) True 
 B)False

Question 16

The graph above shows a small country that can import at the world price of Pw and currently imports (Qd-Qs).Suppose that the government imposes quota of 80% of the current import amount (and suppose that this does not raise the domestic price so much that there will be no trade).
Use the graph above to illustrate the effects of the quota.Show the new areas of consumer surplus,producer surplus,and any other relevant areas,and the deadweight losses due to the quota.Who wins and who loses from the tariff?

Accepted Answer

See Figure 6.7 in the text.Consumer surp

Question 17

Give an example of a nontariff measure that could reduce the quantity of imports or exports.

Accepted Answer

Special fees imposed on importers,burden

Question 18

Deadweight losses are the only potential cost associated with tariffs,which is why they are preferred to quotas.

Accepted Answer

A) True 
 B)False

Question 19

Tariffs reallocate income from

Accepted Answer

A) consumers to producers. 
B) producers to consumers. 
C) government to producers. 
D) consumers to foreigners. 
A) consumers to producers. 
B) producers to consumers. 
C) government to producers. 
D) consumers to foreigners.

Question 20

How is the Agreement on Textiles and Clothing impacting trade today?

Accepted Answer

It phased out quotas as of 200

Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,the effective rate of protection is

Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,and another tariff of 50 percent is placed on imports of wood and parts,then the effective rate of protection on tables made in the United States is

In order for large countries to successfully use tariffs to increase well-being,

Why is the Doha Round called the Doha Development Round?

Which of the following is FALSE?

Average tariff rates are highest for

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

What has been the most significant obstacle to progress in the Doha Round?

Nontariff barriers to trade are less transparent than tariffs.

Carefully explain how the imposition of a tariff is different for a large country (that can affect the world price)than a small country.

Which of the following is FALSE?

Nominal rates of protection

An increase in domestic demand for a product protected by a quota results in an increase in producer surplus for domestic firms,while for a tariff it would result in more imports.

In economic terms,tariffs are preferred to quotas because

Over time,quotas usually lead to larger deadweight losses than tariffs.

Give an example of a nontariff measure that could reduce the quantity of imports or exports.

Deadweight losses are the only potential cost associated with tariffs,which is why they are preferred to quotas.

Tariffs reallocate income from

How is the Agreement on Textiles and Clothing impacting trade today?

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

China and India in the World Economy

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Exam 6: The Theory of Tariffs and Quotas

Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,the effective rate of protection is

Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,and another tariff of 50 percent is placed on imports of wood and parts,then the effective rate of protection on tables made in the United States is

In order for large countries to successfully use tariffs to increase well-being,

Why is the Doha Round called the Doha Development Round?

Which of the following is FALSE?

Average tariff rates are highest for

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

What has been the most significant obstacle to progress in the Doha Round?

Nontariff barriers to trade are less transparent than tariffs.

Carefully explain how the imposition of a tariff is different for a large country (that can affect the world price)than a small country.

Which of the following is FALSE?

Nominal rates of protection

An increase in domestic demand for a product protected by a quota results in an increase in producer surplus for domestic firms,while for a tariff it would result in more imports.

In economic terms,tariffs are preferred to quotas because

Over time,quotas usually lead to larger deadweight losses than tariffs.

Give an example of a nontariff measure that could reduce the quantity of imports or exports.

Deadweight losses are the only potential cost associated with tariffs,which is why they are preferred to quotas.

Tariffs reallocate income from

How is the Agreement on Textiles and Clothing impacting trade today?

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

China and India in the World Economy

Filters