Question 1

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

Accepted Answer

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

Question 2

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 3

-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...

Question 4

-Refer to above figure. The loss of Consumer Surplus due to the tariff equals ________.

Accepted Answer

The answer of  
-Refer to above figure. The loss...

Question 5

Suppose an import-competing firm is imperfectly competitive. Replacement of an export tariff with an import quota that yields the same level of imports will ________ market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Accepted Answer

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

Question 6

An import quota is similar to a ________ in its effect on imports, except that an import quota ________.

Accepted Answer

A)  tariff; does not generate revenue 
B)  tariff; generates revenue 
C)  subsidy; does not generate revenue 
D)  subsidy; generates revenue 
E)  tariff; does not result in an efficiency loss. 
A)  tariff; does not generate revenue 
B)  tariff; generates revenue 
C)  subsidy; does not generate revenue 
D)  subsidy; generates revenue 
E)  tariff; does not result in an efficiency loss.

Question 7

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 8

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 9

The excess supply curve of a product we (H) import from foreign countries (F) increases as

Accepted Answer

A)  excess demand of country H increases. 
B)  excess demand of country F increases. 
C)  excess supply of country H increases. 
D)  excess supply of country F increases. 
E)  excess supply of country F decreases. 
A)  excess demand of country H increases. 
B)  excess demand of country F increases. 
C)  excess supply of country H increases. 
D)  excess supply of country F increases. 
E)  excess supply of country F decreases.

Question 10

An export subsidy 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 11

-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...

Question 12

Specific tariffs are

Accepted Answer

A)  import taxes stated in specific legal statutes. 
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 based solely on the origin country. 
A)  import taxes stated in specific legal statutes. 
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 based solely on the origin country.

Question 13

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

Accepted Answer

A)  raises the price of the good in both countries (the "Law of One Price"). 
B)  raises the price in country H and cannot affect its price in country F. 
C)  lowers the price of the good in both countries. 
D)  lowers the price of the good in H and could raise it in F. 
E)  raises the price of the good in H and lowers it in F. 
A)  raises the price of the good in both countries (the "Law of One Price"). 
B)  raises the price in country H and cannot affect its price in country F. 
C)  lowers the price of the good in both countries. 
D)  lowers the price of the good in H and could raise it in F. 
E)  raises the price of the good in H and lowers it in F.

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

Accepted Answer

A)  raises the price of the good in both countries (the "Law of One Price"). 
B)  raises the price in country H and does not affect its price in country F. 
C)  lowers the price of the good in both countries. 
D)  lowers the price of the good in H and could raise it in F. 
E)  raises the price of the good in H and lowers it in F. 
A)  raises the price of the good in both countries (the "Law of One Price"). 
B)  raises the price in country H and does not affect its price in country F. 
C)  lowers the price of the good in both countries. 
D)  lowers the price of the good in H and could raise it in F. 
E)  raises the price of the good in H and lowers it in F.

Question 16

An export subsidy differs from a tariff in each of the following ways EXCEPT

Accepted Answer

A)  a tariff generates revenue. 
B)  a tariff is applied to imports. 
C)  a tariff results in an efficiency loss. 
D)  a tariff is a tax. 
E)  a tariff discourages imports. 
A)  a tariff generates revenue. 
B)  a tariff is applied to imports. 
C)  a tariff results in an efficiency loss. 
D)  a tariff is a tax. 
E)  a tariff discourages imports.

Question 17

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 18

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

Accepted Answer

A)  efficiency loss - terms of trade gain. 
B)  efficiency gain - terms of trade loss. 
C)  efficiency loss + tax revenue gain. 
D)  efficiency loss + tax revenue gain + terms of trade gain. 
E)  efficiency loss - tax revenue gain. 
A)  efficiency loss - terms of trade gain. 
B)  efficiency gain - terms of trade loss. 
C)  efficiency loss + tax revenue gain. 
D)  efficiency loss + tax revenue gain + terms of trade gain. 
E)  efficiency loss - tax revenue gain.

Question 19

In an inflationary environment, then over time

Accepted Answer

A)  a specific tariff will tend to raise more revenue than an ad valorem tariff. 
B)  an ad valorem tariff will tend to raise more revenue than a specific tariff. 
C)  an optimum tariff will tend to raise more revenue than an escalating tariff. 
D)  a tariff quota will tend to raise more revenue than a specific tariff. 
E)  an import quota would raise more revenue than a specific tariff. 
A)  a specific tariff will tend to raise more revenue than an ad valorem tariff. 
B)  an ad valorem tariff will tend to raise more revenue than a specific tariff. 
C)  an optimum tariff will tend to raise more revenue than an escalating tariff. 
D)  a tariff quota will tend to raise more revenue than a specific tariff. 
E)  an import quota would raise more revenue than a specific tariff.

Question 20

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

Accepted Answer

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

Exam 9: The Instruments of Trade Policy

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

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

-Refer to above figure. The loss of Consumer Surplus due to the tariff equals ________.

An import quota is similar to a ________ in its effect on imports, except that an import quota ________.

The principle benefit of tariff protection goes to

The effective rate of protection measures

The excess supply curve of a product we (H) import from foreign countries (F) increases as

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

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

Specific tariffs are

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

If a small country imposes a tariff, then

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

An export subsidy differs from a tariff in each of the following ways EXCEPT

An export subsidy is

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

In an inflationary environment, then over time

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

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 is similar to a in its effect on imports, except that an import quota .

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