Exam 9: The Instruments of Trade Policy

The tariff levied in a "large country" (Home), lowers the world price of the imported good. This causes

Which of the following are examples of goods that have been subject to voluntary export restraints?

The European Union's Common Agricultural Policy (CAP) is, in effect

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

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

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

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

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

The deadweight loss of a tariff

Economic theory in general, and trade theory in particular are replete with equivalencies. For example, it is argued that for any specific tariff one can find an equivalent ad valorem tariff; and that for any quota one can calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorem tariff are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.

Some argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one sector to another, protected or preferred one, within an economy. Find and discuss a counter example to this argument.

The most vocal political pressure for tariffs is generally made by

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

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

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare.

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

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

-Refer to above figure. In the absence of trade, what is the country's consumer surplus?

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

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