Deck 5: Nontariff Trade Barriers

Question 1

The imposition of a tariff on imported steel for the home country results in

A) improving terms of trade and rising volume of trade.
B) higher steel prices and falling steel consumption.
C) lower profits for domestic steel companies.
D) higher unemployment for domestic steel workers.

Answer 1

higher steel prices and falling steel consumption.

Question 2

Empirical studies show that because voluntary export quotas are typically administered by exporting countries, foreign exporters tend to

A) raise their export prices, thus capturing much of the quota's revenue effect.
B) lower their export prices, thus losing much of the quota's revenue effect.
C) raise their export prices, thus selling more goods overseas.
D) lower their export prices, thus selling fewer goods overseas.

Answer 2

raise their export prices, thus capturing much of the quota's revenue effect.

Question 3

Assume the U.S.has a competitive advantage in producing calculators, while the rest of the world has a competitive advantage in steel.Suppose the U.S.and the rest of the world enter into an agreement to lower import quotas below existing levels on calculators and steel.Which of the following would least likely occur for the U.S.? Rising levels of

A) consumer surplus for American buyers of steel.
B) producer surplus for American steelmakers.
C) production in the American calculator industry.
D) producer surplus for American calculator producers.

Answer 3

producer surplus for American steelmakers.

Question 4

The U.S.-Japanese agreement in 1981 to limit imports of small Japanese cars to the U.S.

A) affected Japanese automakers uniformly.
B) resulted in losses to the Japanese auto industry.
C) cost the U.S. consumer an extra $660 or so per Japanese import purchased.
D) did not save any U.S. jobs.

Question 5

Tariffs and quotas on imports tend to involve larger sacrifices in national welfare than would occur under domestic subsidies.This is because, unlike domestic subsidies, import tariffs and quotas

A) permit less efficient home production.
B) distort choices for domestic consumers.
C) result in higher tax rates for domestic residents.
D) redistribute revenue from domestic producers to consumers.

Question 6

Domestic content legislation applied to autos would tend to

A) support wage levels of American autoworkers.
B) lower auto prices for American autoworkers.
C) encourage American automakers to locate production overseas.
D) increase profits of American auto companies.

Question 7

A firm that faces problems of falling sales and excess productive capacity might resort to international dumping if it

A) can charge higher prices in markets that are elastic to price changes.
B) earns revenues on foreign sales that at least cover variable costs.
C) can sell at that price where domestic and foreign demand elasticities equate.
D) is able to force foreign prices below marginal production costs.

Question 8

Compared to an import quota, an equivalent tariff may provide a less certain amount of protection for home producers since

A) a tariff has no deadweight loss in terms of production and consumption.
B) foreign firms may absorb the tariff by offering exports at lower prices.
C) tariffs are effective only if home demand is perfectly elastic.
D) quotas do not result in increases in the price of the imported good.

Question 9

Which trade restriction stipulates the percentage of a product's total value that must be produced domestically in order for that product to be sold domestically?

A) import quota
B) orderly marketing agreement
C) local content requirement
D) government procurement policy

Question 10

Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad.The export revenue of these firms would rise if the foreign demand is

A) elastic in response to the price reduction.
B) inelastic in response to the price reduction.
C) unit elastic in response to the price reduction.
D) weak.

Question 11

The imposition of a domestic content requirement by the United States would cause consumer surplus for Americans to

A) rise.
B) fall.
C) remain unchanged.
D) impose downward pressure on wages of workers.

Question 12

Concerning the restrictive impact of an import quota, assume there occurs an increase in the domestic demand for the import product.As long as the quota falls short of what would be imported under free market conditions, the economy's adjustment to the increase in demand would take the form of

A) a decrease in domestic production of the import good.
B) an increase in the amount of the good being imported.
C) an increase in the domestic price of the import good.
D) a decrease in domestic consumption of the import good.

Question 13

A producer successfully practicing international dumping would charge

A) a relatively higher price in the more inelastic market.
B) a relatively higher price in the more elastic market.
C) the same price in all markets, regardless of their elasticities.
D) different prices in all markets, regardless of their elasticities.

Question 14

The United Auto Workers union attempted to win the approval of legislation that would moderate the practice of foreign sourcing on the part of American auto manufacturers.Which of the following best represents this legislation?

A) voluntary export quotas
B) trigger price mechanism
C) tariff quotas
D) local content laws

Question 15

Suppose the government grants a subsidy to domestic producers of an import-competing good.The subsidy tends to result in deadweight losses for the domestic economy in the form of the

A) consumption effect.
B) redistribution effect.
C) revenue effect.
D) protective effect.

Question 16

Which of the following refers to a market-sharing pact negotiated by trading partners to moderate the intensity of international competition?

A) orderly marketing agreement
B) local content requirements
C) import quota
D) trigger price mechanism

Question 17

Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country's

A) export revenues will decrease.
B) export revenues will rise.
C) terms of trade will worsen.
D) terms of trade will improve.

Question 18

Antidumping law has been called unfair for all of the following reasons EXCEPT

A) they do not reflect currency fluctuations.
B) they are based on average variable cost.
C) they are based on average total cost.
D) U.S. firms selling at home are not subject to the same rules.

Question 19

If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then

A) the quota results in efficiency reductions but the tariff does not.
B) the tariff results in efficiency reductions but the quota does not.
C) they have different impacts on how much is produced and consumed.
D) they have different impacts on how income is distributed.

Question 20

Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota on its automakers.The largest share of the export quota's "revenue effect" would tend to be captured by

A) the U.S. government.
B) Japanese automakers.
C) American auto consumers.
D) American autoworkers.

Question 21

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.Suppose instead that the Mexican government provides a subsidy of $200 per ton to its steel producers, as indicated by the supply schedule S_{M (with subsidy)}.As a result of the subsidy, the welfare loss to Mexico due to inefficient domestic production equals

A) $200.
B) $400.
C) $600.
D) $800.

Question 22

A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as

A) a domestic subsidy.
B) an export subsidy.
C) an import quota.
D) an export quota.

Question 23

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers, as indicated by the supply schedule S_{M (with subsidy)}.The quantity of imports equals

A) 1 ton.
B) 2 tons.
C) 3 tons.
D) 4 tons.

Question 24

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Referring to Figure 5.1, suppose the Mexican government imposes an import quota equal to 2 tons of steel.If Mexican steel importers behave as monopoly buyers and foreign exporters behave as competitive sellers, the overall welfare loss of the quota to Mexico equals

A) $200.
B) $400.
C) $600.
D) $800.

Question 25

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.With free trade, Mexico's consumer surplus and producer surplus respectively equal

A) $2000 and $1200.
B) $3200 and $200.
C) $3600 and $800.
D) $4000 and $600.

Question 26

If import licenses are auctioned off to domestic importers in a competitive market, their scarcity value (revenue effect) accrues to

A) foreign corporations.
B) foreign workers.
C) domestic corporations.
D) the domestic government.

Question 27

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers, as indicated by the supply schedule S_{M (with subsidy)}.The overall deadweight welfare loss to Mexico equals

A) $200.
B) $400.
C) $600.
D) $800.

Question 28

If the home country's government grants a subsidy on a domestically produced good, domestic producers tend to

A) capture the entire subsidy in the form of higher profits.
B) increase their level of production.
C) reduce wages paid to domestic workers.
D) consider the subsidy as an increase in production cost.

Question 29

In certain industries, Japanese employers do not lay off workers.Therefore, they sometimes have excess supplies of goods that they cannot sell on the home market without lowering prices.To hold down losses, they sell goods in overseas markets at prices well beneath those in Japan.This practice is best referred to as

A) orderly marketing.
B) trigger pricing.
C) domestic content pricing.
D) dumping.

Question 30

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Referring to Figure 5.1, suppose the Mexican government imposes an import quota equal to 2 tons of steel.If foreign exporters behave as monopoly sellers, and Mexican importers behave as competitive buyers, the overall welfare loss of the quota to Mexico equals

A) $200.
B) $400.
C) $600.
D) $800.

Question 31

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Referring to Figure 5.1, suppose the Mexican government imposes an import quota equal to 2 tons of steel.If the Mexican government auctions import licenses to the highest foreign bidder, the overall welfare loss of the quota to Mexico equals

A) $200.
B) $400.
C) $600.
D) $800.

Question 32

If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then

A) the quota results in efficiency reductions but the tariff does not.
B) the tariff results in efficiency reductions but the quota does not.
C) they have identical impacts on how much is produced and consumed.
D) they have identical impacts on how income is distributed.

Question 33

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers, as indicated by the supply schedule S_{M (with subsidy)}.As a result of the subsidy Mexican steel producers gain ____ of producer surplus.

A) $200
B) $400
C) $600
D) $800

Question 34

Import quotas tend to lead to all of the following EXCEPT

A) domestic producers of the imported good being harmed.
B) domestic consumers of the imported good being harmed.
C) prices increasing in the importing country.
D) prices falling in the exporting country.

Question 35

From the perspective of the American public as a whole, export subsidies levied by overseas governments on goods sold to the United States

A) help more than they hurt.
B) hurt more than they help.
C) are equivalent to an import quota.
D) are equivalent to an export quota.

Question 36

To maintain that South Koreans are dumping their VCRs in the United States is to maintain that

A) Koreans are selling VCRs in the United States below their production cost.
B) Koreans are selling VCRs in the United States above their production cost.
C) the cost of manufacturing VCRs in Korea is lower in Korea than in the United States since wages are lower in Korea.
D) the cost of manufacturing VCRs in Korea is higher in Korea than in the United States since wages are higher in Korea.

Question 37

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.With free trade, the quantity of steel imported by Mexico equals

A) 2 tons.
B) 4 tons.
C) 6 tons.
D) 8 tons.

Question 38

Government subsidies may take the form of all of these EXCEPT

A) cash disbursements.
B) tax breaks.
C) bank credits.
D) insurance arrangements.

Question 39

Export subsidies levied by foreign governments on products in which the United States has a comparative disadvantage

A) lower the welfare of all Americans.
B) lead to increases in U.S. consumer surplus.
C) encourage U.S. production of competing goods.
D) encourage U.S. workers to demand higher wages.

Question 40

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers, as indicated by the supply schedule S_{M (with subsidy)}.The total cost of the subsidy to the Mexican government equals

A) $200.
B) $400.
C) $600.
D) $800.

Question 41

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.Assume that Swedish import companies behave as competitive buyers while foreign export companies behave as monopoly sellers.Compared to free trade, Sweden's import quota results in domestic welfare

A) gains totaling $3.20.
B) gains totaling $4.80.
C) losses totaling $3.20.
D) losses totaling $4.80.

Question 42

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.If the Swedish government auctions import licenses to the highest bidder in a competitive market, it could realize revenues of up to

A) $3.20.
B) $4.00.
C) $4.80.
D) $5.60.

Question 43

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.If S_Sweden+Quota represents the supply schedule after a quota is levied, Sweden's imports will equal

A) 6 apples.
B) 8 apples.
C) 10 apples.
D) 12 apples.

Question 44

Figure 5.2. International Dumping
Consider Figure 5.2.Compared with the total revenue and total profit that ABC Inc.realizes in the absence of dumping, with dumping the firm attains a

A) fall in revenue of $18; fall in profits of $15.
B) fall in revenue of $18, fall in profits of $18.
C) rise in revenue of $18, rise in profits of $15.
D) rise in revenue of $18, rise in profits of $18.

Question 45

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.In the absence of trade, Sweden's equilibrium price and quantity of apples would be

A) $0.60 and 22 pounds.
B) $0.60 and 14 pounds.
C) $1.00 and 18 pounds.
D) $1.40 and 14 pounds.

Question 46

Figure 5.4. Venezuelan Calculator Market
Consider Figure 5.4.The cost of the production subsidy to the Venezuelan government totals

A) $32.
B) $40.
C) $48.
D) $54.

Question 47

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.At the free-trade price of $0.60 per pound, Sweden's consumer surplus totals ____ and producer surplus totals ____.

A) $10.80, $2.40
B) $14.60, $3.90
C) $24.20, $1.80
D) $32.40, $2.30

Question 48

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.After the quota is levied, the price of apples in Sweden will equal

A) $0.60 per pound.
B) $1.00 per pound.
C) $1.40 per pound.
D) $1.80 per pound.

Question 49

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.Suppose the rest of the world can supply apples to Sweden at a price of $0.60 per pound.With free trade, Sweden produces ____ pounds of apples and imports ____ pounds of apples.

A) 10, 8
B) 10, 18
C) 6, 22
D) 6, 16

Question 50

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.Assume that Swedish import companies behave as monopoly buyers while foreign export companies behave as competitive sellers.Compared to free trade, Sweden's import quota results in domestic welfare

A) gains totaling $1.60.
B) gains totaling $3.20.
C) losses totaling $1.60.
D) losses totaling $3.20.

Question 51

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.Suppose the rest of the world voluntarily agrees to reduce steel shipments to Mexico vis-a-vis an export quota equal to 2 tons.Assuming Mexican importers behave as competitive buyers while foreign exporters behave as monopoly sellers, the overall welfare loss of the quota to Mexico is

A) $200.
B) $400.
C) $600.
D) $800.

Question 52

Figure 5.4. Venezuelan Calculator Market
Consider Figure 5.4.Assume the Venezuelan government grants its manufacturers a production subsidy of $4 per calculator.After the subsidy is granted, Venezuelan imports total

A) 8 calculators.
B) 12 calculators.
C) 16 calculators.
D) 20 calculators.

Question 53

Figure 5.4. Venezuelan Calculator Market
Consider Figure 5.4.Suppose the rest of the world supplies calculators to Venezuela at a price of $4 each.With free trade, Venezuelan imports total

A) 8 calculators.
B) 16 calculators.
C) 20 calculators.
D) 24 calculators.

Question 54

Figure 5.2. International Dumping
Consider Figure 5.2.In the absence of international dumping, ABC Inc.maximizes profits by selling ____ calculators at a price of $____; the firm realizes profits totaling $____.

A) 27, 5, 54
B) 27, 5, 36
C) 24, 4, 46
D) 24, 4, 28

Question 55

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.The quota's revenue effect equals

A) $1.60.
B) $2.40.
C) $3.20.
D) $4.00.

Question 56

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.The quota leads to a deadweight welfare loss for Sweden of an amount equaling

A) $0.80.
B) $1.60.
C) $2.40.
D) $3.20.

Question 57

Figure 5.1 illustrates the steel market for Mexico, assumed to be a "small" country that is unable to affect the world price. Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a "Small" Country
Consider Figure 5.1.Suppose the rest of the world voluntarily agrees to reduce steel shipments to Mexico vis-a-vis an export quota equal to 2 tons.Assuming Mexican importers behave as monopoly buyers while foreign exporters behave as competitive sellers, the overall welfare loss of the quota to Mexico is

A) $200.
B) $400.
C) $600.
D) $800.

Question 58

Figure 5.2. International Dumping
Consider Figure 5.2.ABC Inc.sells 27 calculators at a price of $5 each, realizing profits totaling $54.Of this quantity, ABC Inc.sells ____ calculators in Canada and realizes revenues totaling $____; the firm sells ____ calculators in France and realizes revenues totaling $____.

A) 15, 35, 9, 45
B) 15, 45, 9, 35
C) 21, 105, 6, 30
D) 21, 30, 6, 105

Question 59

Figure 5.2. International Dumping
Consider Figure 5.2.With international dumping, ABC Inc.sells ____ calculators to Canadian buyers at a price of $____ and ____ calculators to French buyers at a price of $____.

A) 15, 4, 12, 7
B) 15, 7, 12, 4
C) 9, 5, 15, 6
D) 9, 6, 15, 5

Question 60

Figure 5.3. Sweden's Apple Market
Consider Figure 5.3.As a result of the quota, Sweden's consumer surplus

A) increases by $6.
B) increases by $8.
C) decreases by $6.
D) decreases by $8.

Question 61

Under U.S.law, a(n) ___________duty is levied when the U.S.Department of Commerce determines a class or kind of foreign merchandise is being sold at less than fair value (LTFV).

A) dumping
B) antidumping
C) margin of dumping
D) below-cost sales

Question 62

Which is NOT a material injury caused by LTFV?

A) unemployment
B) lost sales
C) lost profit
D) general expenses

Question 63

When voluntary export limits are imposed on the world's chief exporter

A) the exports of the nonrestrained suppliers may be deterred.
B) a trade diversion effect may occur.
C) the exports of the non-restrained suppliers may not be deterred.
D) a trade diversion effect will not occur.

Question 64

Figure 5.6 Domestice Supply and demand for Wine - U.S.
Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.What will happen to the price of a bottle of wine in the U.S.if a quota of 15 bottles of wine is imposed?

A) increase to $15
B) increase to $10
C) stay the same at $8
D) decrease to $5

Question 65

Figure 5.4. Venezuelan Calculator Market
Consider Figure 5.4.The increase in Venezuelan producer surplus under the production subsidy totals

A) $16.
B) $20.
C) $24.
D) $32.

Question 66

Assume that a U.S.importer imports furniture from China.If the Commerce Department makes a preliminary investigation and finds evidence of dumping, the U.S.importer must pay a special tariff equal to the

A) estimated dumping margin on all imports of that product.
B) estimated dumping margin on all sales of that product.
C) estimated manufacturing cost on all imports of that product.
D) estimated dumping margin on all exports of that product.

Question 67

Figure 5.6 Domestice Supply and demand for Wine - U.S.
Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.If the U.S.imposes a quota of 15 bottles of wine, how much wine will U.S.consumers demand, how much wine will U.S.producers produce and how much wine will be imported?

A) 30 bottles, 20 bottles, 10 bottles
B) 40 bottles, 25 bottles, 15 bottles
C) 30 bottles, 30 bottles, 0 bottles
D) 30 bottles, 15 bottles, 15 bottles

Question 68

A home appliance manufacturer observes the following and determines that his competitors are pricing their imported goods below-cost sale.Which point would have helped him come to this conclusion?

A) The amount of general expenses was 12 percent of the cost of manufacturing.
B) The cost of packaging the merchandise for shipment was included.
C) The cost of product in the U.S. is below that in the home market.
D) The amount of profit was equal to 9 percent of the manufacturing cost plus general expenses.

Question 69

In recent years, the average antidumping duty imposed by the United States has been about

A) 70 percent.
B) 50 percent.
C) 45 percent.
D) >100 percent.

Question 70

The margin of dumping is calculated as

A) difference between the local market value and the U.S. price.
B) difference between the foreign market value and the U.S. price.
C) difference between the U.S. market value and the foreign price.
D) difference between the foreign market value and the foreign price.

Question 71

Assume that the Commerce Department makes a preliminary investigation on imports of furniture by a company and finds evidence of dumping and collects an estimated dumping margin on all imports of that product.On further investigation it is determined that dumping has NOT happened.Then, the special tariff collected is

A) replaced with a permanent tariff, collected from the importer.
B) returned partially to the importer.
C) retained fully by the Commerce Department.
D) rebated to the importer.

Question 72

Figure 5.6 Domestice Supply and demand for Wine - U.S.
Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.If the U.S.imposes a quota of 15 bottles of wine what will happen to consumer surplus?

A) decreases by $210
B) decreases by $245
C) stays the same
D) increases by $70

Question 73

Why do you think Whirlpool had to file multiple lawsuits before it won import protection?

A) due to the tough import competition it faced from Samsung and LG.
B) due to the country-hopping technique that Samsung and LG indulged in
C) due to president Donald Trump's "America First" slogan
D) because Samsung and LG practiced unlawful pricing of washing machines imported from South Korea and Mexico

Question 74

Figure 5.6 Domestice Supply and demand for Wine - U.S.
Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.If the U.S.imposes a quota of 15 bottles of wine, how much revenue will the U.S.government collect?

A) 0
B) $35
C) $70
D) $105

Question 75

Figure 5.6 Domestice Supply and demand for Wine - U.S.
Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.How much will the U.S.produce and import in these circumstances?

A) 5 bottles, 40 bottles
B) 40 bottles, 0 bottles
C) 5 bottles, 35 bottles
D) 5 bottles, 0 bottles

Question 76

A voluntary export agreement

A) typically applies only to the world's most important exporting nation(s).
B) typically applies only to the world's least important exporting nation (s).
C) is always more restrictive on trade than a tariff or import quota.
D) allows producers with superior products to participate in market.

Question 77

Concerning international dumping, many economists argue that "fair value" should be based on

A) average variable cost.
B) average fixed cost.
C) marginal cost.
D) total cost.

Question 78

Figure 5.4. Venezuelan Calculator Market
Consider Figure 5.4.The production subsidy results in an overall welfare loss for Venezuela totaling

A) $8.
B) $12.
C) $16.
D) $20.

Question 79

Assume that the manufacturing cost of a company is $50,0000 and the general expenses is $50,000.Then, the amount of profit must be equal to at least _____ for the cost-based definition criterion of foreign market value to be met.

A) $44,000
B) $6,500
C) $56,000
D) $49,000

Question 80

Subsidies to domestic firms may lead to

A) an increase in prices.
B) higher volume of exports.
C) higher volume of imports.
D) increase in welfare of the trading partner.