Question 1

(Figure: Home Market II) The foreign producers in the figure absorbed _____ of the overall tariff.

Accepted Answer

A)  $10 
B)  $8 
C)  $5 
D)  10% 
A)  $10 
B)  $8 
C)  $5 
D)  10%

Question 2

Suppose that the free-trade price of a ton of steel is €500. (Note: € is the symbol for the euro, a common currency used in 19 European countries, including Finland.) Finland, a small country, imposes a €60-per-ton specific tariff on imported steel. With the tariff, Finland produces 300,000 tons of steel and consumes 600,000 tons of steel. What will happen to the Finnish price of steel if Finnish demand for steel increases and a 300,000-ton quota remains unchanged?

Accepted Answer

A)  It will not change. 
B)  It will increase. 
C)  It will decrease. 
D)  It will first increase, then decrease. 
A)  It will not change. 
B)  It will increase. 
C)  It will decrease. 
D)  It will first increase, then decrease.

Question 3

What organization emerged from the GATT, starting January 1, 1995, with expanded responsibilities and global interaction?

Accepted Answer

A)  the Doha round 
B)  the World Trade Organization 
C)  the United Nations 
D)  the Institute for International Economics 
A)  the Doha round 
B)  the World Trade Organization 
C)  the United Nations 
D)  the Institute for International Economics

Question 4

When a tariff is imposed, there is always an additional loss. One loss occurs when production moves from more efficient foreign producers to less efficient domestic producers. This loss is the:

Accepted Answer

A)  consumption loss. 
B)  efficiency transfer. 
C)  production loss. 
D)  X-factor. 
A)  consumption loss. 
B)  efficiency transfer. 
C)  production loss. 
D)  X-factor.

Question 5

An international conference in Geneva, Switzerland, in 1947 resulted in the formation of:

Accepted Answer

A)  the European Union. 
B)  the International Monetary Fund. 
C)  the General Agreement on Tariffs and Trade (GATT). 
D)  the International Red Cross. 
A)  the European Union. 
B)  the International Monetary Fund. 
C)  the General Agreement on Tariffs and Trade (GATT). 
D)  the International Red Cross.

Question 6

Which of the following taxes is easiest to collect?

Accepted Answer

A)  income taxes 
B)  wealth taxes 
C)  tariffs 
D)  value-added taxes 
A)  income taxes 
B)  wealth taxes 
C)  tariffs 
D)  value-added taxes

Question 7

(Figure: Home Market I) Under free trade, the home country will import:

Accepted Answer

A)  26 units. 
B)  22 units. 
C)  16 units. 
D)  10 units. 
A)  26 units. 
B)  22 units. 
C)  16 units. 
D)  10 units.

Question 8

Why did the European Union put tariffs on banana imports from some countries and not from other countries?

Accepted Answer

A)  to encourage organic farming in the Caribbean 
B)  to support former colonies in Africa 
C)  to discourage European banana consumption 
D)  to encourage European banana production 
A)  to encourage organic farming in the Caribbean 
B)  to support former colonies in Africa 
C)  to discourage European banana consumption 
D)  to encourage European banana production

Question 9

What were the differences between the U. S. tariffs on tires imposed in 2009 and the U.S. tariffs on steel imposed in 2002?

Accepted Answer

The U.S. tariffs on tires imposed in 200

Question 10

The following table gives the hypothetical supply and demand of television sets in Guatemala. Guatemala is a small country that is unable to affect world prices. The world price (free-trade price) is $300 per TV set.   How much total tariff revenue will Guatemala collect when it imposes the 100% tariff on imported TVs?

Accepted Answer

A)  $300 
B)  $0 
C)  $240,000 
D)  $360,000 
A)  $300 
B)  $0 
C)  $240,000 
D)  $360,000

Question 11

An international conference in Bretton Woods, New Hampshire, in 1944 resulted in the formation of:

Accepted Answer

A)  the European Union. 
B)  the International Monetary Fund. 
C)  the General Agreement on Tariffs and Trade (GATT). 
D)  the International Red Cross. 
A)  the European Union. 
B)  the International Monetary Fund. 
C)  the General Agreement on Tariffs and Trade (GATT). 
D)  the International Red Cross.

Question 12

A customs union is different from a free-trade area, in that:

Accepted Answer

A)  a free-trade area allows for free movement of factors, whereas a customs union does not. 
B)  a free-trade area allows for uniform tariffs, whereas a customs union does not. 
C)  a free-trade area removes trade barriers between member countries, whereas a customs union adopts identical tariffs with the rest of the world. 
D)  a customs union removes trade barriers between member countries, whereas a free-trade area adopts identical tariffs with the rest of the world. 
A)  a free-trade area allows for free movement of factors, whereas a customs union does not. 
B)  a free-trade area allows for uniform tariffs, whereas a customs union does not. 
C)  a free-trade area removes trade barriers between member countries, whereas a customs union adopts identical tariffs with the rest of the world. 
D)  a customs union removes trade barriers between member countries, whereas a free-trade area adopts identical tariffs with the rest of the world.

Question 13

How does a tariff imposed by a large country differ from a tariff imposed by a small country?

Accepted Answer

A)  If a large nation imposes a tariff, that government gets more revenue. 
B)  It may not have any effect at all in the large country, since its consumers have so many other choices. 
C)  Because of its size, the large nation's tariff not only decreases the quantity demanded of the product but may also reduce the world price of the good. 
D)  The large nation can just buy up foreign producers if the foreign producers don't like having a tariff imposed. 
A)  If a large nation imposes a tariff, that government gets more revenue. 
B)  It may not have any effect at all in the large country, since its consumers have so many other choices. 
C)  Because of its size, the large nation's tariff not only decreases the quantity demanded of the product but may also reduce the world price of the good. 
D)  The large nation can just buy up foreign producers if the foreign producers don't like having a tariff imposed.

Question 14

U.S. consumers were hurt by the 2002 steel tariff; U.S. producers who use steel were also hurt, but the biggest outcry came from:

Accepted Answer

A)  exporters of steel to the United States-Europe, Japan, and South Korea. 
B)  the United Nations. 
C)  the big labor unions. 
D)  Ralph Nader, who is very opposed to restrictions on free trade. 
A)  exporters of steel to the United States-Europe, Japan, and South Korea. 
B)  the United Nations. 
C)  the big labor unions. 
D)  Ralph Nader, who is very opposed to restrictions on free trade.

Question 15

Under the GATT framework, nations met periodically to negotiate lower trade restrictions. These negotiations are known as:

Accepted Answer

A)  conferee sessions. 
B)  plenary meetings. 
C)  sesqui-sessions. 
D)  rounds. 
A)  conferee sessions. 
B)  plenary meetings. 
C)  sesqui-sessions. 
D)  rounds.

Question 16

One interpretation of producer surplus is that it equals:

Accepted Answer

A)  the profits of a firm. 
B)  the return to the fixed factors of production in an industry. 
C)  consumer surplus. 
D)  the difference between the price of a product and its average cost of production. 
A)  the profits of a firm. 
B)  the return to the fixed factors of production in an industry. 
C)  consumer surplus. 
D)  the difference between the price of a product and its average cost of production.

Question 17

What is the term used to describe when one country retaliates to a tariff on its exports with tariffs on its imports?

Accepted Answer

A)  a tariff war 
B)  a tariff tiff 
C)  a tariff conflict 
D)  a tariff fight 
A)  a tariff war 
B)  a tariff tiff 
C)  a tariff conflict 
D)  a tariff fight

Question 18

The following table gives the hypothetical supply and demand of television sets in Guatemala. Guatemala is a small country that is unable to affect world prices. The world price (free-trade price) is $300 per TV set.   Who will benefit from Guatemala's 100% tariff on imported TVs?

Accepted Answer

A)  Guatemala's consumers 
B)  Guatemala's TV producers 
C)  Guatemala's TV importers 
D)  foreign TV manufacturers 
A)  Guatemala's consumers 
B)  Guatemala's TV producers 
C)  Guatemala's TV importers 
D)  foreign TV manufacturers

Question 19

What GATT provision did the United States use to justify levying tariffs on tire imports in fall 2009?

Accepted Answer

A)  antidumping duties 
B)  export subsidization 
C)  safeguard clause 
D)  national security 
A)  antidumping duties 
B)  export subsidization 
C)  safeguard clause 
D)  national security

Question 20

According to the GATT, a tariff applied under the safeguard provision must:

Accepted Answer

A)  be temporary. 
B)  be permanent. 
C)  apply to all imports. 
D)  be no higher than 10%. 
A)  be temporary. 
B)  be permanent. 
C)  apply to all imports. 
D)  be no higher than 10%.

(Figure: Home Market II) The foreign producers in the figure absorbed _____ of the overall tariff.

What organization emerged from the GATT, starting January 1, 1995, with expanded responsibilities and global interaction?

When a tariff is imposed, there is always an additional loss. One loss occurs when production moves from more efficient foreign producers to less efficient domestic producers. This loss is the:

An international conference in Geneva, Switzerland, in 1947 resulted in the formation of:

Which of the following taxes is easiest to collect?

(Figure: Home Market I) Under free trade, the home country will import:

Why did the European Union put tariffs on banana imports from some countries and not from other countries?

What were the differences between the U. S. tariffs on tires imposed in 2009 and the U.S. tariffs on steel imposed in 2002?

An international conference in Bretton Woods, New Hampshire, in 1944 resulted in the formation of:

A customs union is different from a free-trade area, in that:

How does a tariff imposed by a large country differ from a tariff imposed by a small country?

U.S. consumers were hurt by the 2002 steel tariff; U.S. producers who use steel were also hurt, but the biggest outcry came from:

Under the GATT framework, nations met periodically to negotiate lower trade restrictions. These negotiations are known as:

One interpretation of producer surplus is that it equals:

What is the term used to describe when one country retaliates to a tariff on its exports with tariffs on its imports?

The following table gives the hypothetical supply and demand of television sets in Guatemala. Guatemala is a small country that is unable to affect world prices. The world price (free-trade price) is $300 per TV set. Who will benefit from Guatemala's 100% tariff on imported TVs?

What GATT provision did the United States use to justify levying tariffs on tire imports in fall 2009?

According to the GATT, a tariff applied under the safeguard provision must:

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 Imperfect 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

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Exam 8: Import Tariffs and Quotas Under Perfect Competition

(Figure: Home Market II) The foreign producers in the figure absorbed _____ of the overall tariff.

What organization emerged from the GATT, starting January 1, 1995, with expanded responsibilities and global interaction?

When a tariff is imposed, there is always an additional loss. One loss occurs when production moves from more efficient foreign producers to less efficient domestic producers. This loss is the:

An international conference in Geneva, Switzerland, in 1947 resulted in the formation of:

Which of the following taxes is easiest to collect?

(Figure: Home Market I) Under free trade, the home country will import:

Why did the European Union put tariffs on banana imports from some countries and not from other countries?

What were the differences between the U. S. tariffs on tires imposed in 2009 and the U.S. tariffs on steel imposed in 2002?

An international conference in Bretton Woods, New Hampshire, in 1944 resulted in the formation of:

A customs union is different from a free-trade area, in that:

How does a tariff imposed by a large country differ from a tariff imposed by a small country?

U.S. consumers were hurt by the 2002 steel tariff; U.S. producers who use steel were also hurt, but the biggest outcry came from:

Under the GATT framework, nations met periodically to negotiate lower trade restrictions. These negotiations are known as:

One interpretation of producer surplus is that it equals:

What is the term used to describe when one country retaliates to a tariff on its exports with tariffs on its imports?

The following table gives the hypothetical supply and demand of television sets in Guatemala. Guatemala is a small country that is unable to affect world prices. The world price (free-trade price) is $300 per TV set. Who will benefit from Guatemala's 100% tariff on imported TVs?

What GATT provision did the United States use to justify levying tariffs on tire imports in fall 2009?

According to the GATT, a tariff applied under the safeguard provision must:

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 Imperfect 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

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