Question 1

An import quota will ________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

Accepted Answer

A) increase;decrease;increase;have an ambiguous effect on 
B) increase;decrease;decrease;decrease 
C) increase;decrease;have no effect on;have an ambiguous effect on 
D) increase;decrease;have no effect on;decrease 
E) increase;increase;decrease;have an ambiguous effect on 
A) increase;decrease;increase;have an ambiguous effect on 
B) increase;decrease;decrease;decrease 
C) increase;decrease;have no effect on;have an ambiguous effect on 
D) increase;decrease;have no effect on;decrease 
E) increase;increase;decrease;have an ambiguous effect on

Question 2

Tariffs are NOT defended on the grounds that they

Accepted Answer

A) improve the terms of trade of foreign nations. 
B) protect jobs and reduce unemployment. 
C) promote growth and development of young industries. 
D) prevent over-dependence of a country on only a few industries. 
E) protect domestic producers from foreign low prices. 
A) improve the terms of trade of foreign nations. 
B) protect jobs and reduce unemployment. 
C) promote growth and development of young industries. 
D) prevent over-dependence of a country on only a few industries. 
E) protect domestic producers from foreign low prices.

Question 3

Ad valorem tariffs are

Accepted Answer

A) import taxes stated in ads in industry publications. 
B) import taxes calculated as a fixed charge for each unit of imported goods. 
C) import taxes calculated as a fraction of the value of the imported goods. 
D) the same as import quotas. 
E) import taxes calculated solely on the origin country. 
A) import taxes stated in ads in industry publications. 
B) import taxes calculated as a fixed charge for each unit of imported goods. 
C) import taxes calculated as a fraction of the value of the imported goods. 
D) the same as import quotas. 
E) import taxes calculated solely on the origin country.

Question 4

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

Accepted Answer

The answer of  
-Refer to above figure.With a specific...

Question 5

In the exporting country,an export subsidy will

Accepted Answer

A) help consumers and raise the overall economic welfare of the exporting country. 
B) hurt consumers but raise the overall economic welfare of the exporting country. 
C) hurt consumers and lower the overall economic welfare of the exporting country. 
D) help consumers but lower economic welfare of the exporting country. 
E) help consumers and have no effect on the economic welfare of the exporting country. 
A) help consumers and raise the overall economic welfare of the exporting country. 
B) hurt consumers but raise the overall economic welfare of the exporting country. 
C) hurt consumers and lower the overall economic welfare of the exporting country. 
D) help consumers but lower economic welfare of the exporting country. 
E) help consumers and have no effect on the economic welfare of the exporting country.

Question 6

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

Accepted Answer

The answer of  
-Refer to above figure.The lowest specific...

Question 7

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

Accepted Answer

A) increase. 
B) decrease 
C) remain the same. 
D) depend on whether computers are PCs or "Supercomputers." 
E) no longer apply. 
A) increase. 
B) decrease 
C) remain the same. 
D) depend on whether computers are PCs or "Supercomputers." 
E) no longer apply.

Question 8

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

Accepted Answer

The answer of  
-Refer to above figure.With a specific...

Question 9

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

Accepted Answer

A) cheap foreign labor argument. 
B) infant industry argument. 
C) even playing field argument. 
D) balance of payments argument. 
E) domestic living standard argument. 
A) cheap foreign labor argument. 
B) infant industry argument. 
C) even playing field argument. 
D) balance of payments argument. 
E) domestic living standard argument.

Question 10

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

Accepted Answer

A) domestic consumers will purchase the foreign good regardless of the tariff. 
B) the industry may never "mature." 
C) most industries require tariff protection when they are mature. 
D) the tariff may hurt the industry's domestic sales. 
E) the tariffs fail to protect the domestic producers. 
A) domestic consumers will purchase the foreign good regardless of the tariff. 
B) the industry may never "mature." 
C) most industries require tariff protection when they are mature. 
D) the tariff may hurt the industry's domestic sales. 
E) the tariffs fail to protect the domestic producers.

Question 11

The effective rate of protection measures

Accepted Answer

A) the "true" ad valorem value of a tariff. 
B) the quota equivalent value of a tariff. 
C) the efficiency with which the tariff is collected at the customhouse. 
D) the protection given by the tariff to domestic value added. 
E) the difference between domestic and foreign prices of the import. 
A) the "true" ad valorem value of a tariff. 
B) the quota equivalent value of a tariff. 
C) the efficiency with which the tariff is collected at the customhouse. 
D) the protection given by the tariff to domestic value added. 
E) the difference between domestic and foreign prices of the import.

Question 12

-Refer to above figure.Given a tariff of $3 per unit,what is the country's consumer surplus?

Accepted Answer

The answer of  
-Refer to above figure.Given a tariff...

Question 13

-Refer to above figure.With free trade and no tariffs,what is the quantity of Widgets consumed domestically?

Accepted Answer

The answer of  
-Refer to above figure.With free trade...

Question 14

If a small country imposes a tariff,then

Accepted Answer

A) the producers must suffer a loss. 
B) the consumers must suffer a loss. 
C) the government revenue must suffer a loss. 
D) the demand curve must shift to the left. 
E) the world price on that item will shift. 
A) the producers must suffer a loss. 
B) the consumers must suffer a loss. 
C) the government revenue must suffer a loss. 
D) the demand curve must shift to the left. 
E) the world price on that item will shift.

Question 15

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

Accepted Answer

A) increase. 
B) decrease. 
C) remain the same. 
D) depend on whether computers are PCs or "Supercomputers." 
E) no longer apply. 
A) increase. 
B) decrease. 
C) remain the same. 
D) depend on whether computers are PCs or "Supercomputers." 
E) no longer apply.

Question 16

-Refer to above figure.What is the amount of efficiency loss resulting from imposition of the tariff?

Accepted Answer

The answer of  
-Refer to above figure.What is the...

Question 17

The principle benefit of tariff protection goes to

Accepted Answer

A) domestic consumers of the good produced. 
B) foreign consumers of the good produced. 
C) domestic producers of the good produced. 
D) foreign producers of the good produced. 
E) the domestic government. 
A) domestic consumers of the good produced. 
B) foreign consumers of the good produced. 
C) domestic producers of the good produced. 
D) foreign producers of the good produced. 
E) the domestic government.

Question 18

An export subsidy is

Accepted Answer

A) a payment to a firm or individual that ships a good abroad. 
B) a fee that is charged to a country that ships goods to the U.S. 
C) a payment made to a foreign government in return for preferential trade treatment. 
D) illegal in the U.S.but is fairly common in the rest of the world. 
E) a limit on the quantity of a good or service that can be sold abroad. 
A) a payment to a firm or individual that ships a good abroad. 
B) a fee that is charged to a country that ships goods to the U.S. 
C) a payment made to a foreign government in return for preferential trade treatment. 
D) illegal in the U.S.but is fairly common in the rest of the world. 
E) a limit on the quantity of a good or service that can be sold abroad.

Question 19

The imposition of tariffs will help a nation attain which of the following goals?

Accepted Answer

A) decreased domestic consumer prices 
B) increased domestic employment 
C) increased amount and variety of goods available for consumers 
D) increased competition between domestic and foreign producers 
E) gains for domestic producers 
A) decreased domestic consumer prices 
B) increased domestic employment 
C) increased amount and variety of goods available for consumers 
D) increased competition between domestic and foreign producers 
E) gains for domestic producers

Question 20

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

Accepted Answer

The answer of  
-Refer to above figure.In the absence...

Exam 9: The Instruments of Trade Policy

An import quota will ________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

Tariffs are NOT defended on the grounds that they

Ad valorem tariffs are

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

In the exporting country,an export subsidy will

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

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.With a specific tariff of $3 per unit,what is the quantity of Widgets consumed domestically?

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

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

The effective rate of protection measures

-Refer to above figure.Given a tariff of $3 per unit,what is the country's consumer surplus?

-Refer to above figure.With free trade and no tariffs,what is the quantity of Widgets consumed domestically?

If a small country imposes a tariff,then

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

-Refer to above figure.What is the amount of efficiency loss resulting from imposition of the tariff?

The principle benefit of tariff protection goes to

An export subsidy is

The imposition of tariffs will help a nation attain which of the following goals?

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

Introduction

World Trade: An Overview

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: An Asset Approach

Money,Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: An Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

An import quota will producer surplus, consumer surplus, government revenue,and overall domestic national welfare.