Question 1

Which of the following is NOT correct about the effects of a tariff on an imported product?

Accepted Answer

A) Tariffs benefit domestic producers by raising price and domestic output. 
B) Tariffs increase government revenue. 
C) Tariffs mean higher prices and less consumption for consumers of the product. 
D) Tariffs increase the efficiency of how resources are allocated. 
A) Tariffs benefit domestic producers by raising price and domestic output. 
B) Tariffs increase government revenue. 
C) Tariffs mean higher prices and less consumption for consumers of the product. 
D) Tariffs increase the efficiency of how resources are allocated.

Question 2

Use a graph to demonstrate why quotas are likely to cause increased deadweight losses over time.

Accepted Answer

Over time,demand for most goods rises,as

Question 3

The graph above shows a small country that can import at the world price of Pw.Suppose that the government imposes a tariff of $T per unit (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 tariff.Show the new areas of consumer surplus,producer surplus,and government revenue,and the deadweight losses due to the tariff.Who wins and who loses from the tariff?

Accepted Answer

See Figure 6.3 in the text.Consumer surp

Question 4

In which way are tariffs different from quotas?

Accepted Answer

A) They reduce the volume of imported products. 
B) They raise the price of the imported products to consumers. 
C) They increase the domestic quantity supplied of the product. 
D) They raise government revenue. 
A) They reduce the volume of imported products. 
B) They raise the price of the imported products to consumers. 
C) They increase the domestic quantity supplied of the product. 
D) They raise government revenue.

Question 5

The rules for respecting property rights as they relate to trade were negotiated during the Uruguay Round (1986-1994)and culminated in the Trade-Related Aspects of Intellectual Property Rights (TRIPS)agreement.

Accepted Answer

A) True 
 B)False

Question 6

What is Joseph Stiglitz's main criticism regarding intellectual property rights protection?

Accepted Answer

the enforcement cost

Question 7

The graph above shows supply and demand in the domestic market without trade.Producer surplus without trade is represented by area

Accepted Answer

A) P1-E-Po 
B) P1-E-0 
C) Po-E-0 
D) P1-E-Qo 
A) P1-E-Po 
B) P1-E-0 
C) Po-E-0 
D) P1-E-Qo

Question 8

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 9

A real cost of tariffs and quotas that is difficult to measure is that they

Accepted Answer

A) encourage rent seeking. 
B) shift income from consumers to producers. 
C) limit the quantity of imports. 
D) reduce wages. 
A) encourage rent seeking. 
B) shift income from consumers to producers. 
C) limit the quantity of imports. 
D) reduce wages.

Question 10

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

Accepted Answer

Increased rent seeki

Question 11

The graph above shows domestic supply and demand with trade in a SMALL country.With trade,this country can purchase at the world price,Pw.
Suppose that this country imposes a $5 per unit tariff on this good.Which of the following is true?

Accepted Answer

A) The domestic price will rise by $5. 
B) Consumers will be better off. 
C) There will not be deadweight losses due to this tariff, since it is a small country. 
D) Producers will not increase domestic production. 
A) The domestic price will rise by $5. 
B) Consumers will be better off. 
C) There will not be deadweight losses due to this tariff, since it is a small country. 
D) Producers will not increase domestic production.

Question 12

Intellectual property rights protection is a critical issue for the pharmaceutical industry among others.

Accepted Answer

A) True 
 B)False

Question 13

Give an example of an industry that would seek intellectual property rights protection because its product incorporates innovation and research.

Accepted Answer

Pharmaceuticals,comp

Question 14

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

Accepted Answer

•The greater welfare loss from quotas si

Question 15

In a small country,the net national cost of tariff protection is equal to the reduction in consumer surplus minus

Accepted Answer

A) the increase in government revenue and the increase in producer surplus. 
B) the increase in government revenue. 
C) the increase in producer surplus. 
D) the efficiency loss and the consumption side loss. 
A) the increase in government revenue and the increase in producer surplus. 
B) the increase in government revenue. 
C) the increase in producer surplus. 
D) the efficiency loss and the consumption side loss.

Question 16

Which of the following is NOT an expected benefit of reducing nontariff barriers to trade?

Accepted Answer

A) Fewer firms to compete with 
B) Lower prices for many goods 
C) Increase in the volume of exports and imports 
D) Improved overall economic welfare 
A) Fewer firms to compete with 
B) Lower prices for many goods 
C) Increase in the volume of exports and imports 
D) Improved overall economic welfare

Question 17

Based on Scenario 6.1 above,value added in the United States is

Accepted Answer

A) $500. 
B) $600. 
C) $400. 
D) $300. 
A) $500. 
B) $600. 
C) $400. 
D) $300.

Question 18

Describe intellectual property rights.What agreements have been reached regarding their protection? What are the benefits and the costs of protecting intellectual property rights?

Accepted Answer

Intellectual property rights included co

Question 19

Which type of restriction on quantity of imports is the most transparent?

Accepted Answer

A) Quota 
B) Licensing requirements 
C) Voluntary export restraints 
D) Government procurement policies 
A) Quota 
B) Licensing requirements 
C) Voluntary export restraints 
D) Government procurement policies

Question 20

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) Developing countries usually strongly advocate the protection of intellectual property rights. 
D) 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) Developing countries usually strongly advocate the protection of intellectual property rights. 
D) The protection given to creators and innovators varied greatly internationally until standardization began with the signing of the TRIPs agreement.

Which of the following is NOT correct about the effects of a tariff on an imported product?

Use a graph to demonstrate why quotas are likely to cause increased deadweight losses over time.

In which way are tariffs different from quotas?

The rules for respecting property rights as they relate to trade were negotiated during the Uruguay Round (1986-1994)and culminated in the Trade-Related Aspects of Intellectual Property Rights (TRIPS)agreement.

What is Joseph Stiglitz's main criticism regarding intellectual property rights protection?

The graph above shows supply and demand in the domestic market without trade.Producer surplus without trade is represented by area

Based on Figure 6.1,how much revenue will the government raise from a $0.25 per bushel tariff on soybean imports?

A real cost of tariffs and quotas that is difficult to measure is that they

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

The graph above shows domestic supply and demand with trade in a SMALL country.With trade,this country can purchase at the world price,Pw. Suppose that this country imposes a $5 per unit tariff on this good.Which of the following is true?

Intellectual property rights protection is a critical issue for the pharmaceutical industry among others.

Give an example of an industry that would seek intellectual property rights protection because its product incorporates innovation and research.

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

In a small country,the net national cost of tariff protection is equal to the reduction in consumer surplus minus

Which of the following is NOT an expected benefit of reducing nontariff barriers to trade?

Based on Scenario 6.1 above,value added in the United States is

Describe intellectual property rights.What agreements have been reached regarding their protection? What are the benefits and the costs of protecting intellectual property rights?

Which type of restriction on quantity of imports is the most transparent?

Which of the following is FALSE?

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

Which of the following is NOT correct about the effects of a tariff on an imported product?

Use a graph to demonstrate why quotas are likely to cause increased deadweight losses over time.

In which way are tariffs different from quotas?

The rules for respecting property rights as they relate to trade were negotiated during the Uruguay Round (1986-1994)and culminated in the Trade-Related Aspects of Intellectual Property Rights (TRIPS)agreement.

What is Joseph Stiglitz's main criticism regarding intellectual property rights protection?

The graph above shows supply and demand in the domestic market without trade.Producer surplus without trade is represented by area

Based on Figure 6.1,how much revenue will the government raise from a $0.25 per bushel tariff on soybean imports?

A real cost of tariffs and quotas that is difficult to measure is that they

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

The graph above shows domestic supply and demand with trade in a SMALL country.With trade,this country can purchase at the world price,Pw. Suppose that this country imposes a $5 per unit tariff on this good.Which of the following is true?

Intellectual property rights protection is a critical issue for the pharmaceutical industry among others.

Give an example of an industry that would seek intellectual property rights protection because its product incorporates innovation and research.

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

In a small country,the net national cost of tariff protection is equal to the reduction in consumer surplus minus

Which of the following is NOT an expected benefit of reducing nontariff barriers to trade?

Based on Scenario 6.1 above,value added in the United States is

Describe intellectual property rights.What agreements have been reached regarding their protection? What are the benefits and the costs of protecting intellectual property rights?

Which type of restriction on quantity of imports is the most transparent?

Which of the following is FALSE?

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