Exam 9: The Instruments of Trade Policy

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

Which of the following is a fixed percentage of the value of an imported product?

The two deadweight triangles are the Consumption distortion and Production distortion losses. It is easy to understand why the Consumption distortion constitutes a loss for society. After all it raises the prices of goods to consumers, and even causes some consumers to drop out of the market altogether. It seems paradoxical that the Production distortion is considered an equivalent burden on society. After all, in this case, profits increase, and additional production (with its associated employment) comes on line. This would seem to be an offset rather than an addition to the burden or loss borne by society. Explain why the Production distortion is indeed a loss to society, and what is wrong with the logic that leads to the apparent paradox.

Throughout the post-World War II era, the importance of tariffs as a trade barrier has

If an import-competing firm is imperfectly competitive, than under free trade an export tariff will ________ domestic market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

An export tariff will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

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

In an inflationary environment, then over time

If a good is imported into (small) country H from country F, then the imposition of a tariff In country H

If an import-competing firm is imperfectly competitive, than under free trade an import quota will ________ domestic market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

An export subsidy will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

The Metzler Paradox

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

The effective rate of protection measures

The imposition of tariffs on imports results in deadweight (triangle) losses. These are

The change in the economic welfare of a country associated with an increase in a tariff equals

Which type of tariff is forbidden in the United States on Constitutional grounds?

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

Should the home country be "large" relative to its trade partners, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

If a good is imported into (large) country H from country F, then the imposition of a tariff in country H