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. 
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.

Question 2

The production side efficiency loss of a tariff is caused by

Accepted Answer

A) higher profits gained by foreign producers. 
B) the expansion of relative inefficient domestic production. 
C) the contraction of domestic consumption. 
D) the increase in government revenue. 
A) higher profits gained by foreign producers. 
B) the expansion of relative inefficient domestic production. 
C) the contraction of domestic consumption. 
D) the increase in government revenue.

Question 3

In the case of a small country,consumer surplus

Accepted Answer

A) decreases less with a tariff than with an equivalent quota. 
B) decreases less with a quota than with an equivalent tariff. 
C) decreases the same with tariffs and equivalent quotas. 
D) increases more with quotas. 
A) decreases less with a tariff than with an equivalent quota. 
B) decreases less with a quota than with an equivalent tariff. 
C) decreases the same with tariffs and equivalent quotas. 
D) increases more with quotas.

Question 4

The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw.
Which of the following areas represents producer surplus with trade?

Accepted Answer

A) Pw-A-0 
B) Pw-B-Qd-0 
C) P1-B-Pw 
D) P1-B-A-0 
A) Pw-A-0 
B) Pw-B-Qd-0 
C) P1-B-Pw 
D) P1-B-A-0

Question 5

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 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 demand curve and above the price line.

Question 6

The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw.
Which of the following areas represents consumer surplus with trade?

Accepted Answer

A) Pw-A-0 
B) Pw-B-Qd-0 
C) P1-B-Pw 
D) P1-B-A-0 
A) Pw-A-0 
B) Pw-B-Qd-0 
C) P1-B-Pw 
D) P1-B-A-0

Question 7

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 will NOT occur?

Accepted Answer

A) Government revenue will increase. 
B) Domestic consumers will be worse off. 
C) Domestic producers will be better off. 
D) The gains to the winners will exceed the losses to the losers from the tariff. 
A) Government revenue will increase. 
B) Domestic consumers will be worse off. 
C) Domestic producers will be better off. 
D) The gains to the winners will exceed the losses to the losers from the tariff.

Question 8

Which of the following would be a deadweight loss from a tariff?

Accepted Answer

A) The shift of consumer surplus to government 
B) The increase in producer surplus 
C) The decrease in consumer surplus 
D) The decrease in consumer surplus due to a drop in consumption 
A) The shift of consumer surplus to government 
B) The increase in producer surplus 
C) The decrease in consumer surplus 
D) The decrease in consumer surplus due to a drop in consumption

Question 9

Developing countries have identified which key issues as important to them in current trade talks?

Accepted Answer

The costs and benefits to them of implem

Question 10

Efficiency losses are

Accepted Answer

A) deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price. 
B) the total loss in consumer surplus from a tariff. 
C) the increase in producer surplus that is created by a tariff. 
D) the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge. 
A) deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price. 
B) the total loss in consumer surplus from a tariff. 
C) the increase in producer surplus that is created by a tariff. 
D) the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Suppose a manufacturer of software develops a new computer program that sells for $50.The $50 cost includes $0.25 for the CD it is stored on,$5 for the labor of the company software programmers,and $1.75 for packaging materials and transportation costs.Value added by the software company is

Accepted Answer

A) $49.75. 
B) $48.25. 
C) $48. 
D) $44.75. 
A) $49.75. 
B) $48.25. 
C) $48. 
D) $44.75.

Question 13

Figure 6.1  
-Based on Figure 6.1,suppose the government puts a tariff of $0.25 per bushel on soybean imports.How much will the tariff reduce imports?

Accepted Answer

A) Imports will decrease by 10 million bushels. 
B) Imports will decrease by 20 million bushels. 
C) Imports will decrease by 60 million bushels. 
D) Imports will not change after the tariff. 
A) Imports will decrease by 10 million bushels. 
B) Imports will decrease by 20 million bushels. 
C) Imports will decrease by 60 million bushels. 
D) Imports will not change after the tariff.

Question 14

In the case of a small country,producer surplus

Accepted Answer

A) increases more with a tariff than with an equivalent quota. 
B) increases more with a quota than with an equivalent tariff. 
C) is not changed by tariffs or quotas. 
D) increases the same amount with tariffs and equivalent quotas. 
A) increases more with a tariff than with an equivalent quota. 
B) increases more with a quota than with an equivalent tariff. 
C) is not changed by tariffs or quotas. 
D) increases the same amount with tariffs and equivalent quotas.

Question 15

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

Accepted Answer

A) reduce rent seeking elsewhere in the economy. 
B) create a deadweight loss. 
C) lead to retaliation by the nation's trading partners. 
D) increase domestic production of the good. 
A) reduce rent seeking elsewhere in the economy. 
B) create a deadweight loss. 
C) lead to retaliation by the nation's trading partners. 
D) increase domestic production of the good.

Question 16

What are the three major types of quotas?

Accepted Answer

Formal quotas outrig

Question 17

Draw a graph showing the effects of imposing a tariff in the small country case.Describe the results,using the concepts of producer surplus,consumer surplus and deadweight loss.Specifically address the effects on consumers,producers,government revenue and overall national well-being,connecting those effects to areas of your graph.

Accepted Answer

Students should crea

Question 18

Producer 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 supply curve. 
D) 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 supply curve. 
D) under the demand curve and above the price line.

Question 19

What is the name of the agreement related to intellectual property rights?

Accepted Answer

TRIPS,or Trade-Relat

Question 20

Based on Figure 6.1,given a tariff of $0.25 per bushel on soybean imports,how much will domestic production increase?

Accepted Answer

A) Domestic firms will increase output by 10 million bushels. 
B) Domestic firms will increase output by 20 million bushels. 
C) Domestic firms will increase output by 70 million bushels. 
D) Domestic firms' production will not be changed by the tariff. 
A) Domestic firms will increase output by 10 million bushels. 
B) Domestic firms will increase output by 20 million bushels. 
C) Domestic firms will increase output by 70 million bushels. 
D) Domestic firms' production will not be changed by the tariff.

High tariffs on intermediate inputs

The production side efficiency loss of a tariff is caused by

In the case of a small country,consumer surplus

The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents producer surplus with trade?

Consumer surplus is equal to the area

The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents consumer surplus with trade?

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 will NOT occur?

Which of the following would be a deadweight loss from a tariff?

Developing countries have identified which key issues as important to them in current trade talks?

Efficiency losses are

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

Suppose a manufacturer of software develops a new computer program that sells for $50.The $50 cost includes $0.25 for the CD it is stored on,$5 for the labor of the company software programmers,and $1.75 for packaging materials and transportation costs.Value added by the software company is

Figure 6.1 -Based on Figure 6.1,suppose the government puts a tariff of $0.25 per bushel on soybean imports.How much will the tariff reduce imports?

In the case of a small country,producer surplus

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

What are the three major types of quotas?

Producer surplus is equal to the area

What is the name of the agreement related to intellectual property rights?

Based on Figure 6.1,given a tariff of $0.25 per bushel on soybean imports,how much will domestic production increase?

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

Exam 6: The Theory of Tariffs and Quotas

High tariffs on intermediate inputs

The production side efficiency loss of a tariff is caused by

In the case of a small country,consumer surplus

The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents producer surplus with trade?

Consumer surplus is equal to the area

The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents consumer surplus with trade?

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 will NOT occur?

Which of the following would be a deadweight loss from a tariff?

Developing countries have identified which key issues as important to them in current trade talks?

Efficiency losses are

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

Suppose a manufacturer of software develops a new computer program that sells for $50.The $50 cost includes $0.25 for the CD it is stored on,$5 for the labor of the company software programmers,and $1.75 for packaging materials and transportation costs.Value added by the software company is

Figure 6.1 -Based on Figure 6.1,suppose the government puts a tariff of $0.25 per bushel on soybean imports.How much will the tariff reduce imports?

In the case of a small country,producer surplus

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

What are the three major types of quotas?

Producer surplus is equal to the area

What is the name of the agreement related to intellectual property rights?

Based on Figure 6.1,given a tariff of $0.25 per bushel on soybean imports,how much will domestic production increase?

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