Question 1

Which one of the following was NOT a reason why Brazil's infant industry protection of its personal computer industry was a failure?

Accepted Answer

A)  Imported silicon chips were expensive to obtain. 
B)  Local regulations limited the entry of new firms in the industry. 
C)  Domestically produced parts required by the Brazilian PC industry were expensive. 
D)  The Brazilian government continued to purchase imported PCs. 
A)  Imported silicon chips were expensive to obtain. 
B)  Local regulations limited the entry of new firms in the industry. 
C)  Domestically produced parts required by the Brazilian PC industry were expensive. 
D)  The Brazilian government continued to purchase imported PCs. D

Question 2

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. Compared with the no-trade equilibrium, consumer surplus ___________ when the monopolist engages in free trade.

Accepted Answer

A)  increases 
B)  decreases 
C)  remains the same 
D)  first decreases, then increases 
A)  increases 
B)  decreases 
C)  remains the same 
D)  first decreases, then increases A

Question 3

What is meant by a "discriminating monopolist"?

Accepted Answer

A)  The firm discriminates on the basis of hiring workers. 
B)  The firm violates all antitrust laws. 
C)  The firm evades taxes. 
D)  The firm sells its product at different prices in different markets. 
A)  The firm discriminates on the basis of hiring workers. 
B)  The firm violates all antitrust laws. 
C)  The firm evades taxes. 
D)  The firm sells its product at different prices in different markets. D

Question 4

Will a home monopolist prefer a quota or a tariff to protect its output?

Accepted Answer

A)  The home monopolist will prefer a tariff, because a tariff allows it to earn higher profits than a quota. 
B)  The home monopolist will prefer a quota, because a quota may allow it to earn higher profits than a tariff. 
C)  It is immaterial to the home monopolist because it will earn the same higher profits with each form of protection. 
D)  The home monopolist will prefer neither, because it earns higher profits in a free-trade situation. 
A)  The home monopolist will prefer a tariff, because a tariff allows it to earn higher profits than a quota. 
B)  The home monopolist will prefer a quota, because a quota may allow it to earn higher profits than a tariff. 
C)  It is immaterial to the home monopolist because it will earn the same higher profits with each form of protection. 
D)  The home monopolist will prefer neither, because it earns higher profits in a free-trade situation.

Question 5

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. In autarky, what is the firm's equilibrium output?

Accepted Answer

A)  5 
B)  10 
C)  15 
D)  20 
A)  5 
B)  10 
C)  15 
D)  20

Question 6

Which criterion must be met to identify if an imported product is being dumped on the home country?

Accepted Answer

A)  The foreign firm sells the product at a lower price in the home market than in the foreign market. 
B)  The foreign firm raises the price in the home country. 
C)  The foreign firm sells the product at a lower price in the foreign market than in the home market. 
D)  The foreign firm sells the product below average cost in the home market. 
A)  The foreign firm sells the product at a lower price in the home market than in the foreign market. 
B)  The foreign firm raises the price in the home country. 
C)  The foreign firm sells the product at a lower price in the foreign market than in the home market. 
D)  The foreign firm sells the product below average cost in the home market.

Question 7

(Scenario: Discriminating Monopolist) The demand curve in its home market is P = 200 - Q; the demand curve in its foreign market is P = 160 - 2Q; and its marginal cost is a constant $20 per unit. Its marginal revenue in the home market is MR =200 - 2Q and is MR = 160 - 4Q in the foreign market.
What is the discriminating monopolist's profit per unit in the foreign market?

Accepted Answer

A)  $90 
B)  $110 
C)  $70 
D)  $35 
A)  $90 
B)  $110 
C)  $70 
D)  $35

Question 8

An antidumping duty equals the difference between:

Accepted Answer

A)  the price charged by the exporter in its home market and the price charged in the export market. 
B)  the price charged by the exporter in the export market and the price charged in its home market. 
C)  the price charged by the exporter in its home market and the price of an equivalent product in the export market. 
D)  the price of an equivalent product in the export market and the price charged by the exporter in the export market. 
A)  the price charged by the exporter in its home market and the price charged in the export market. 
B)  the price charged by the exporter in the export market and the price charged in its home market. 
C)  the price charged by the exporter in its home market and the price of an equivalent product in the export market. 
D)  the price of an equivalent product in the export market and the price charged by the exporter in the export market.

Question 9

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. What price does the monopolist charge with no trade?

Accepted Answer

A)  $5 
B)  $20 
C)  $25 
D)  $40 
A)  $5 
B)  $20 
C)  $25 
D)  $40

Question 10

Are the effects of a tariff and a quota equivalent if the domestic industry is perfectly competitive?

Accepted Answer

In a perfectly competitive domestic indu

Question 11

The small country monopolist's free-trade equilibrium occurs:

Accepted Answer

A)  where MC = MR and where MC is greater than the world price. 
B)  at the same price as in autarky. 
C)  at a higher price than the autarkic price. 
D)  where MC = the world price. 
A)  where MC = MR and where MC is greater than the world price. 
B)  at the same price as in autarky. 
C)  at a higher price than the autarkic price. 
D)  where MC = the world price.

Question 12

Why didn't all U.S. solar panel producers support the antidumping and countervailing duty actions brought against Chinese solar panel imports?

Accepted Answer

Not all U.S. solar panel producers suppo

Question 13

(Scenario: A Monopolist) A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. What is its profit-maximizing price?

Accepted Answer

A)  $20 
B)  $15 
C)  $10 
D)  $5 
A)  $20 
B)  $15 
C)  $10 
D)  $5

Question 14

Monopolistic firms that practice international dumping:

Accepted Answer

A)  suffer losses on their sales in foreign markets. 
B)  suffer losses on their sales in domestic markets. 
C)  maximize their monopoly profits. 
D)  are subject to antidumping taxes in their home countries. 
A)  suffer losses on their sales in foreign markets. 
B)  suffer losses on their sales in domestic markets. 
C)  maximize their monopoly profits. 
D)  are subject to antidumping taxes in their home countries.

Question 15

(Figure: Supply and Demand at Home) Which line describes the new MR curve after the quota is imposed?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  MC 
A)  A 
B)  B 
C)  C 
D)  MC

Question 16

In 2012, the United States imposed antidumping and countervailing duties totaling 24% and 36%, respectively, on imports of solar panels from two groups of Chinese solar panel exporters. Which of the following describes the process that led to these duties?

Accepted Answer

A)  The World Trade Organization determined that China was dumping and subsidizing solar panels in the U.S. market. 
B)  The U.S. Department of Commerce determined that China was dumping and subsidizing solar panels in the U.S. market. 
C)  The U.S. Department of Commerce determined that Chinese solar panel imports caused material injury to U.S. solar panel producers. 
D)  The U.S. International Trade Commission determined that China was dumping and subsidizing solar panels in the U.S. market. 
A)  The World Trade Organization determined that China was dumping and subsidizing solar panels in the U.S. market. 
B)  The U.S. Department of Commerce determined that China was dumping and subsidizing solar panels in the U.S. market. 
C)  The U.S. Department of Commerce determined that Chinese solar panel imports caused material injury to U.S. solar panel producers. 
D)  The U.S. International Trade Commission determined that China was dumping and subsidizing solar panels in the U.S. market.

Question 17

When we compare a tariff levied on an import where the home firm is a monopoly with an import tariff where the home firms are competitive, we find:

Accepted Answer

A)  the exact same result-both the monopolist and the competitive firm charge the world price plus the tariff and both firms produce a quantity where MC = MR = world price plus the tariff. 
B)  that the monopoly firm will be able to charge a higher price and limit its quantity. 
C)  that the competitive firm will not be able to survive the impact of the tariff. 
D)  the monopoly firm will pay its workers less and earn higher profits. 
A)  the exact same result-both the monopolist and the competitive firm charge the world price plus the tariff and both firms produce a quantity where MC = MR = world price plus the tariff. 
B)  that the monopoly firm will be able to charge a higher price and limit its quantity. 
C)  that the competitive firm will not be able to survive the impact of the tariff. 
D)  the monopoly firm will pay its workers less and earn higher profits.

Question 18

In comparison to the welfare effects of a tariff in a perfectly competitive home market, the welfare effects of a tariff under a home monopoly are _______, and the deadweight loss for the home monopoly is ________.

Accepted Answer

A)  the same; the same 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower 
A)  the same; the same 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower

Question 19

The case of ________ has been referred to in the press and business publications as an example of right-minded import protection in the United States.

Accepted Answer

A)  U.S. steel 
B)  Dole bananas 
C)  the Chrysler corporation 
D)  Harley-Davidson motorcycles 
A)  U.S. steel 
B)  Dole bananas 
C)  the Chrysler corporation 
D)  Harley-Davidson motorcycles

Question 20

What are the likely effects of a U.S. antidumping duty on imported steel?

Accepted Answer

A)  The U.S. terms of trade will improve and U.S. steel imports will rise. 
B)  The U.S. terms of trade will worsen and U.S. steel imports will rise. 
C)  The foreign price of steel will rise and the United States will avoid deadweight losses. 
D)  The U.S. price of steel will rise and the United States will suffer deadweight losses. 
A)  The U.S. terms of trade will improve and U.S. steel imports will rise. 
B)  The U.S. terms of trade will worsen and U.S. steel imports will rise. 
C)  The foreign price of steel will rise and the United States will avoid deadweight losses. 
D)  The U.S. price of steel will rise and the United States will suffer deadweight losses.

Which one of the following was NOT a reason why Brazil's infant industry protection of its personal computer industry was a failure?

What is meant by a "discriminating monopolist"?

Will a home monopolist prefer a quota or a tariff to protect its output?

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q². Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. In autarky, what is the firm's equilibrium output?

Which criterion must be met to identify if an imported product is being dumped on the home country?

An antidumping duty equals the difference between:

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q². Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. What price does the monopolist charge with no trade?

Are the effects of a tariff and a quota equivalent if the domestic industry is perfectly competitive?

The small country monopolist's free-trade equilibrium occurs:

Why didn't all U.S. solar panel producers support the antidumping and countervailing duty actions brought against Chinese solar panel imports?

(Scenario: A Monopolist) A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q². By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. What is its profit-maximizing price?

Monopolistic firms that practice international dumping:

(Figure: Supply and Demand at Home) Which line describes the new MR curve after the quota is imposed?

In 2012, the United States imposed antidumping and countervailing duties totaling 24% and 36%, respectively, on imports of solar panels from two groups of Chinese solar panel exporters. Which of the following describes the process that led to these duties?

When we compare a tariff levied on an import where the home firm is a monopoly with an import tariff where the home firms are competitive, we find:

In comparison to the welfare effects of a tariff in a perfectly competitive home market, the welfare effects of a tariff under a home monopoly are _, and the deadweight loss for the home monopoly is __.

The case of ________ has been referred to in the press and business publications as an example of right-minded import protection in the United States.

What are the likely effects of a U.S. antidumping duty on imported steel?

Trade in the Global Economy

Trade and Technology: The Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Offshoring of Goods and Services

Import Tariffs and Quotas Under Perfect Competition

Export Subsidies in Agriculture and High-Technology Industries

International Agreements: Trade, Labor, and the Environment

The Global Macroeconomy

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Exchange Rates II: the Asset Approach in the Short Run

National and International Accounts: Income, Wealth, and the Balance of Payments

Balance of Payments I: the Gains From Financial Globalization

Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run

Fixed Versus Floating: International Monetary Experience

Exchange Rate Crises: How Pegs Work and How They Break

The Euro

Topics in International Macroeconomics

Filters

Exam 9: Import Tariffs and Quotas Under Imperfect Competition

Which one of the following was NOT a reason why Brazil's infant industry protection of its personal computer industry was a failure?

What is meant by a "discriminating monopolist"?

Will a home monopolist prefer a quota or a tariff to protect its output?

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. In autarky, what is the firm's equilibrium output?

Which criterion must be met to identify if an imported product is being dumped on the home country?

An antidumping duty equals the difference between:

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. What price does the monopolist charge with no trade?

Are the effects of a tariff and a quota equivalent if the domestic industry is perfectly competitive?

The small country monopolist's free-trade equilibrium occurs:

Why didn't all U.S. solar panel producers support the antidumping and countervailing duty actions brought against Chinese solar panel imports?

(Scenario: A Monopolist) A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. What is its profit-maximizing price?

Monopolistic firms that practice international dumping:

(Figure: Supply and Demand at Home) Which line describes the new MR curve after the quota is imposed?

In 2012, the United States imposed antidumping and countervailing duties totaling 24% and 36%, respectively, on imports of solar panels from two groups of Chinese solar panel exporters. Which of the following describes the process that led to these duties?

When we compare a tariff levied on an import where the home firm is a monopoly with an import tariff where the home firms are competitive, we find:

In comparison to the welfare effects of a tariff in a perfectly competitive home market, the welfare effects of a tariff under a home monopoly are _______, and the deadweight loss for the home monopoly is ________.

The case of ________ has been referred to in the press and business publications as an example of right-minded import protection in the United States.

What are the likely effects of a U.S. antidumping duty on imported steel?

Trade in the Global Economy

Trade and Technology: The Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Offshoring of Goods and Services

Import Tariffs and Quotas Under Perfect Competition

Export Subsidies in Agriculture and High-Technology Industries

International Agreements: Trade, Labor, and the Environment

The Global Macroeconomy

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Exchange Rates II: the Asset Approach in the Short Run

National and International Accounts: Income, Wealth, and the Balance of Payments

Balance of Payments I: the Gains From Financial Globalization

Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run

Fixed Versus Floating: International Monetary Experience

Exchange Rate Crises: How Pegs Work and How They Break

The Euro

Topics in International Macroeconomics

Filters

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q². Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. In autarky, what is the firm's equilibrium output?

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q². Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. What price does the monopolist charge with no trade?

(Scenario: A Monopolist) A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q². By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. What is its profit-maximizing price?

In comparison to the welfare effects of a tariff in a perfectly competitive home market, the welfare effects of a tariff under a home monopoly are _, and the deadweight loss for the home monopoly is __.