Question 1

A tax of 20 cents per unit of imported garlic is an example of a(n)

Accepted Answer

A) ad valorem tariff. 
B) nominal tariff. 
C) effective protection tariff. 
D) specific tariff. 
E) a disadvantageous tariff.

Question 2

In an inflationary environment,then over time

Accepted Answer

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

Question 3

A lower tariff on imported steel would most likely benefit

Accepted Answer

A) foreign consumers of steel. 
B) domestic consumers of steel. 
C) foreign producers at the expense of domestic consumers. 
D) workers in the steel industry. 
E) domestic manufacturers of steel.

Question 4

An export subsidy is

Accepted Answer

A) a payment to a firm or individual that ships a good abroad. 
B) a limit on the quantity of a good or service that can be sold abroad. 
C) a fee that is charged to a country that ships goods to the U.S. 
D) a payment made to a foreign government in return for preferential trade treatment. 
E) illegal in the U.S.but is fairly common in the rest of the world.

Question 5

What is a TRUE statement concerning the imposition in the U.S.of a tariff on cheese?

Accepted Answer

A) It lowers the price of cheese domestically. 
B) It raises revenue for the government. 
C) It raises the price of cheese internationally. 
D) It leads to higher domestic demand for cheese. 
E) It will always result in retaliation from abroad.

Question 6

The main redistribution effect of a tariff is the transfer of income from

Accepted Answer

A) domestic buyers to domestic producers. 
B) domestic producers to domestic buyers. 
C) domestic government to domestic consumers. 
D) domestic producers to domestic government. 
E) foreign producers to domestic consumers.

Question 7

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

Accepted Answer

A) Belgian chocolates and French wines 
B) French wines and cheeses 
C) Taiwanese electronics and Canadian barley 
D) Japanese sushi and German cars 
E) Japanese cars and Chinese solar panels

Question 8

If an import- competing firm is imperfectly competitive,than under free trade an import quota will domestic market price,_ _ producer surplus,_ consumer surplus, government revenue,and overall domestic national welfare.

Accepted Answer

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

Question 9

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.

Accepted Answer

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

Exam 9: The Instruments of Trade Policy